February 9, 2018

Biofuels leader Enerkem has announced the completion of a C$280 million (USD $222 million) investment round. The round was led by new investors BlackRock and Sinobioway, with existing investors also participating.

Participating existing investors included Braemar Energy Ventures, Cycle Capital, Fondaction CSN, Fonds de solidarité FTQ, IQ, National Bank, Rho Capital Partners, Waste Management, and Westly Group.

Enerkem’s President and Chief Executive Officer Vincent Chornet explained that “this new and significant financing will help accelerate our growth and further expand project development and implementation. Now that we have launched the world’s first commercial-scale bioethanol operation in Edmonton, we can focus our efforts on building a strong circular economy for communities around the world by deploying new facilities that address the growing challenges related to waste management and sustainable mobility.”

New Technology Signals Possible Disruption in a USD $168 Billion Global Market

The global biofuel market was valued at USD $168 billion in 2016, and is projected by some to reach USD $218.7 billion in 2022. While biofuels are often derived from agricultural sources such as corn, soybeans, and sugar cane, and ethanol from these plants is considered more sustainable than fossil fuels, there is significant debate as to whether it’s the best use for such crops, especially considering the skyrocketing need for food and the effects of climate change on production. Enerkem’s  proprietary technology, however, converts non-recyclable, non-compostable municipal solid waste into renewable biofuels.

The participation of Chinese equity also should send signals to the investor community. Sinobioway is a Chinese company engaged in the bio-economy. The concern is 40 percent owned by Peking University and primarily invests in bio-energy, bio-environmental protection, bio-medicine, bio-agriculture, bio-service, bio-manufacturing, and bio-intelligence. Their involvement in the tranche reflects a burgeoning interest in China for biotech, with the latest five-year economic plan mandating that the sector should exceed 4 percent of GDP by 2020 (Nature Magazine, January 2018).

By David Nitchman, GAI Media