On Monday, a United Airlines plane powered by biojet fuel made a landmark non-stop voyage from San Francisco to Zurich. Agrisoma Biosciences, a Canadian agtech company that develops Carinata seeds to produce aviation biojet fuel, partnered with United Airlines and French oil and proteins sector company Avril Group to accomplish the second international commercial flight using the company’s seed oil.
As with any startup, proof of concept is a key milestone.
“We are creating a new industry,” Hank Krakowski, Agrisoma’s Director of Sustainable Aviation, told AgFunderNews. “The question was whether the fuel is ready, and it is. Until we got through the approval process, we couldn’t talk to people about investing in contracts with us to create the feedstock for the biojet fuel.” Krakowski has deep ties to the aviation industry after working as a commercial pilot for United Airlines for 30 years. After hanging up his wings, he served as chief operating officer of the Federal Aviation Administration’s Air Traffic Organization for a few years before transitioning into aerospace investment banking. It was through this endeavor that biojet fuel and a sustainable future for aviation captured his focus.
Earlier this year, Agrisoma and Australia’s Qantas Airways partnered on a transpacific flight from Los Angeles to Melbourne that used biojet fuel produced from Carinata, which is a member of the mustard seed family.
“Qantas came to us over a year ago curious about whether we could be the source for their biofuel needs in Australia,” Krakowski explains. “Something happened that surprised us in a wonderful way: when the flight ended, over the next few months Australian farmers called us and Qantas to see how they could work with us.”
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Since launching in 2001, Agrisoma has captured over $27 million in venture capital from Canadian investors, with its most recent Series C in March 2018 raising roughly $12 million. Its four investors – fund manager DesJardins Capital, impact investors Cycle Capital, Quebec-focused funders LuneRouge, and multi-stage investor BDC – all hail from Canada and seek out sustainable technologies. Krakowski hints at more financing activity for Agrisoma in the near future, but could not share more details at this time.
A Seed Company at Heart
While many might assume that Agrisoma brands itself as a biofuel company, it’s better categorized as a seed company. Agrisoma’s proprietary Carinata seed, currently being cultivated by growers in both the Americas and Australia, is a non-food, mustard-like oilseed that produces a grain that is roughly 50% oil and 50% protein. Carinata biojet fuel is made by harvesting tons of Carinata crop, crushing the grain to recover the oil, and refining that oil into jet fuel by the same process used for petroleum-derived jet fuel.
Agrisoma sells its Carinata seeds to farmers or agricultural cooperatives who then grow the seed as a cover crop and sell it back to Agrisoma. It has developed 20,000 lines of germplasm so that it can select the precise variation for different geographical locations and holds numerous patents for the germplasms.
“We have to go into different locations, do trials, sort out the right seed varieties and germplasms for that area, and then we put a two-to-five-year scale-up plan in place where we increase the acreage every year. We have to get farmers to plant and grow the seed and to harvest it correctly,” he explains. The company currently reports 50,000 acres of commercial crop growing across the Americas and Europe with the hope of doubling this acreage every year. It’s started the trial process for Carinata cultivation in Australia, New Zealand, and France.
While biojet fuel is a relatively new product in the jet fuel market, Agrisoma has found a way to slip into the existing supply chain: the company sells directly to existing refineries with biofuel production capabilities, aiming to avoid adding additional layers of complexity to the process and the existing supply chain, says Krakowski.
The biojet fuel typically replaces 10% to 30% of the petroleum jet fuel needed for a flight, making for a cleaner fuel blend that reduces greenhouse gas emissions, according to Agrisoma. Carinata is the first oilseed to be certified as sustainable by the Roundtable on Sustainable Biomaterials, an independent global standard, and certification program for sustainable biomaterials.
Competing with Conventional Jet Fuel
When it comes to industry acceptance, Agrisoma is banking on recent agreements from United Nations International Civil Aviation Organization (ICAO) encouraging airlines to achieve carbon neutral status by 2021 with the goal of claiming a 50% reduction of CO2 emissions by 2050. Carinata and the way in which the company goes about cultivating the crop offers certain environmental benefits that play directly into the ICAO’s aims.
“When you grow it, it sequesters carbon out of the atmosphere like any plant and puts it into the ground. Then, you harvest the plant, and you have a biomass that you leave behind on the ground that does a number of things: it prevents carbon from escaping and provides nutrients for the next crop growing.”
Farmers have been largely receptive to cultivating Carinata, which is used as a cover crop. This means that it doesn’t compete with traditional food growing cycles. And while other cover crops commonly don’t have a dollar value, Carinata cultivation offers farmers an additional stream of income during the off-season.
As an added bonus, Agrisoma sells the spent meal that’s leftover after the seed-crushing process for livestock feed. Because Carinata is a non-GMO seed, the meal sells at a premium to dairies producing organic products.
With some estimates suggesting that airline travel will double from current demand levels by 2040, Krakowski thinks that airlines will have no choice but to seek out sustainable fuel sources that allow them to keep pace with demand while satisfying the ICAO agreement. In fact, Agrisoma is in active discussions with a handful of oil companies about using its oil as a feedstock for biofuel production, says Krakowski.
The Sky’s the Limit
With a few successful flights under its belt, the company is focusing on increasing its acres of production and scaling up in the Americas and France, as well as Australia, New Zealand and perhaps Asia. Most startups keep a close eye on the competition, but for Agrisoma and Krakowski there is plenty of room in the biojet fuel space for additional players.
“If you look at the numbers the industry needs to meet a doubling of air commerce against biofuel availability, they will need every drop they can get from anybody who can produce biofuel regardless of where it comes from.”