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Msg  259 of 261  at  11/23/2023 3:31:44 PM  by

jerrykrause


Tomorrow's Fuel Needs Oilier Beans

 Bloomberg businessweek (Online)
 
 

Tomorrow's Fuel Needs Oilier Beans

 By: Freitas, Gerson Jr., Hirtzer, Michael, Bloomberg Businessweek, 00077135, 11/13/2023, Issue 4804
 
Section:
TECHNOLOGY 
 
 Genetically modified soybeans could help lower emissions from jets and trucks
 
 

To reduce the carbon emissions from passenger jets and long-haul trucks, a vast volume of soybased renewable fuel will be needed. To produce it, American farmers could rip up existing cornfields to clear space, plant millions of additional acres of soybeans and halt all soybean exports.

Or someone could make a better bean. Researchers at startups and biotech giants alike are exploring ways to formulate a new kind of legume through selective breeding or genetic modification that generates more oil per bushel.

One of the startups, ZeaKal Inc., funded in part by seed giant Corteva Inc., plans to introduce its first batch of high-oil seeds for commercial planting in 2024. Scientists have tricked the plant into sustaining photosynthesis for longer with genetic modification, ultimately producing more oil as well as more protein. Oil makes up as much as 23% of the altered seeds, which is higher than the 20% average for conventional seeds. Future varieties might have even more, the San Diego-based startup says.

If the modified beans were planted on the roughly 80 million acres cultivated with soybeans in the US, it would eliminate the need for an additional 13 million acres of oilseeds to meet the country's soaring demand for renewable fuel, ZeaKal says. "That is found oil," says Chief Executive Officer Han Chen. "If you imagine processing the same soybean but getting out 13% or 15% more oil for that bean, you're handling less volume, you're transporting fewer beans. The productivity and the ESG [environmental, social and governance] benefits from knowing that you're going to get more out of less, that's what's really driving it."

For decades seed developers exploring genetic modifications have been primarily focused on boosting crop yields by making plants tolerant to potent weed killers, bugs or droughts. Manipulating the total oil content was never on the table in a meaningful way. But this June, for the first time ever, the amount of US soy oil used for biofuel production in a single month surpassed the amount used for food and other domestic uses, according to US government data.

Renewable diesel, a biofuel that's chemically equivalent to petroleum-based fuel, is often touted as one of the best ways to cut emissions from the hard-to-electrify heavy transportation sector. Companies are racing to build more capacity to process soy, a critical component for expanding green fuel supplies. All four of the so-called ABCD group of major crop merchants—Archer-Daniels- Midland, Bunge, Cargill and Louis Dreyfus—have opened facilities, or announced plans to build or expand them in the next few years.

Tax credits available under the Inflation Reduction Act provide companies in the transportation industry with a financial incentive to switch to fuels with lower carbon intensity. S&P Global sees domestic demand for renewable diesel reaching 4 billion gallons in 2030, up from around 2.7 billion this year. It projects that the use of sustainable aviation fuel will total 1.7 billion gallons annually by the end of the decade, compared with just 182 million gallons a year now.

The outlook for a major increase in biofuel demand is now "more than just an inspiration," says Ryan Fuller, the head of soybean strategic marketing for Syngenta AG, the Swiss seed and chemical company controlled by China National Chemical Corp. Syngenta is poring through data collected over decades of planting and screening in search of traits it could tap to develop varieties more fit for energy production. The company is also considering using gene-editing tools as part of its efforts to increase soy oil content. It hasn't announced a specific plan or timeline for a higher- oil seed.

Despite the bullish projections, the soy-based transportation fuel market is still a drop in the bucket for the diesel industry. And even if the new breed of high-oil seeds takes off, widespread adoption across the US will take time. New genetically modified organisms take years to develop and gain full regulatory approval. Farmers may be reluctant to become early adopters of a technology that hasn't yet proven its benefits, especially if the oil content comes at the expense of existing genetic modifications that improve disease or pest resistance. ZeaKal's new PhotoSeed beans will not initially have those modifications.

There's also the question of what buyers will be willing to pay. As a commodity, oilseeds are generally traded globally based on weight and location, with little space to segregate out beans with unique characteristics. If fuelmakers such as Exxon Mobil Corp. or Chevron Corp. want the more productive beans, suppliers hope they'll eventually break out of a commodity-based model. There's been some sign of that happening with high-oleic soybeans, a variety that's been modified to produce healthier oil. Trading house Bunge Global SA and chicken producer Perdue Farms Inc., for example, pay a premium to buy farmers' high-oleic beans, which have lower saturated fat levels than other cooking oils and boast a longer shelf life.

Perdue has signed a similar deal with ZeaKal, agreeing to pay farmers a premium for harvested supplies of the new variety, which is good for chicken feed because of its higher protein levels. If large oil companies follow suit, the soybean market might never look the same. "We could have an opportunity for the oil component of soybeans to actually become more important in some markets than the protein aspect," says Mike Dillon, oilseed portfolio vice president for Corteva, the agricultural chemical and seed company that was spun off from DowDuPont in 2019. "That's a very dramatic shift."

THE BOTTOM LINE Genetic modification or selective breeding could transform the soy market by making the beans better inputs for low-carbon fuel, but the process is in the early stages.

 


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