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How Solugen became climate tech’s newest unicorn by making chemicals f

At a brand new industrial plant making chemicals in Houston, what you would possibly discover first is what isn’t there. “You’ll discover that there’s no wastewater discharge, or air emissions, and that all the plant is run off electrical energy fairly than large coal-fired burners,” says Sean Hunt, chief know-how officer of Solugen, the startup that constructed the plant.

[Photo: courtesy Solugen]The normal petrochemical trade is without doubt one of the world’s greatest sources of greenhouse fuel emissions, spewing out an estimated 923 million tons of CO2 final yr. However Solugen’s merchandise can really be carbon unfavourable—and they’re additionally cheaper to make than their counterparts constructed from fossil fuels. If the startup can attain the milestones it has set for itself over the subsequent few years, it might doubtlessly start to take away a billion tons of CO2 per yr.

[Photo: courtesy Solugen]The corporate, which not too long ago raised $357 million in a Collection C funding spherical and is now valued at $1.5 billion, launched in 2016 after an opportunity dialog at a poker sport in Dallas. Hunt, a scientist who studied steel catalysts which might be used to make chemicals, met cofounder Gaurab Chakrabarti, who had found an enzyme that might flip sugar into hydrogen peroxide whereas finding out most cancers cells as a medical scholar. They became keen on combining the approaches to make chemicals in a brand new approach.

[Photo: courtesy Solugen]Proper now, the $6 trillion chemicals trade depends on oil, pure fuel, and coal to make components utilized in every thing from laundry detergent and trainers to fertilizer. It’s a unclean course of. The air pollution begins with fossil gas manufacturing, and the complicated processes used to refine these fossil fuels into chemicals result in climate emissions, air pollutants like benzene, and a number of waste, as a result of the methods are inefficient. It’s additionally unsafe. The location the place Solugen now works was a petrochemical plant till it violently exploded, shattering home windows at close by companies and sparking a fireplace that took seven hours to place out.

It’s attainable to make use of fermentation to make the identical chemicals from crops as a substitute of fossil fuels, however fermentation can be inefficient—in the event you use dwelling cells to show sugar right into a chemical, half of the sugar will likely be transformed into CO2. Solugen’s strategy is designed to get rid of that waste. On the plant, which runs on wind energy, corn syrup goes in a reactor crammed with engineered enzymes, making an intermediate product that goes in one other tank with steel catalysts, which pace up the entire response and make it extra environment friendly. Just about the entire feedstock is finally transformed into the ultimate product.

[Photo: courtesy Solugen]The corporate began first with a distinct segment market. After successful a $10,000 grant from an MIT competitors in 2016, Chakrabarti and Hunt went to Dwelling Depot, purchased provides to construct a tiny reactor from PVC pipes, and began making hydrogen peroxide. A enterprise proprietor who’d heard the MIT pitch reached out, saying that they wished to purchase the product to sanitize water in float spas as a result of they wished to discover a extra sustainable product. Others within the float spa trade adopted.

[Photo: courtesy Solugen]“I flew right down to see the lab they usually had this sort of janky prototype reactor—it was perhaps two toes tall, on a lab bench, but it surely was making product via their enzymatic response,” says Seth Bannon, founding companion at Fifty Years, an early-stage VC fund that was the corporate’s first investor. “And the factor that was most spectacular was that they have been promoting 100% of the product.” The startup quickly began promoting its product to different industries, together with wastewater remedy crops.

Specializing in specialty merchandise first was a deliberate technique to keep away from the trail that taken by early biotech corporations that attempted to compete with corporations making cheaper merchandise on a large scale. “I feel a number of the errors which have occurred prior to now have been folks went on to commodity chemicals and fuels to compete towards these $100 billion corporations,” says Hunt. “We began with water remedy chemistries, proper from day one. After which what we’ve been doing is we’ve been progressively transferring into completely different chemistries in several industries as we scale.”

[Photo: courtesy Solugen]One other molecule the corporate now makes can be utilized to make concrete more durable and scale back using cement; as a result of the plant-based chemical is completely embedded within the concrete, it makes the chemical carbon unfavourable. Whereas there could possibly be challenges with utilizing corn syrup at a large scale, for the reason that farmland used to develop the corn might doubtlessly be used for rising meals, Solugen might additionally use captured CO2 as a feedstock sooner or later as a substitute for corn or different crops.

Based mostly on an in depth evaluation of present merchandise, the corporate estimates that it might theoretically produce 90% of the chemicals that are actually produced by fossil fuels. (The opposite 10% embrace chemicals that the corporate doesn’t need to produce due to the environmental impacts of the chemical itself.) Making options for every thing will take time—the corporate has to design enzymes for every chemical, and that’s a difficult course of that isn’t essentially assured to work.

[Photo: courtesy Solugen]The merchandise are additionally cheaper to make than traditionally-produced chemicals partly as a result of the corporate’s course of is way safer. Utilizing corn syrup as a substitute of petroleum helps; the enzymes additionally work with out using different fossil fuels which might be usually utilized in processing, and the chemistry occurs at room temperature fairly than in ultra-hot tools that dangers catching hearth. Conventional processes “are so intrinsically unsafe, that you just can not construct these crops in the USA anymore,” says Chakrabarti. “It’s important to go to overseas nations who’ve a lot decrease security requirements.” Constructing a plant prices round 3 times as a lot because it did within the Seventies, even adjusting for inflation, due to present security requirements, says Hunt.

[Photo: courtesy Solugen]The method may occur in crops which might be a lot smaller than the standard model, and fewer capital-intensive to construct. The corporate plans to construct a distributed community of crops that may assist scale back the emissions from transportation. It’s attainable to reuse outdated industrial services, like the primary plant in Houston. “If you happen to have a look at the outdated metal cities, outdated manufacturing cities of pulp and paper mills, all of them have the identical infrastructure in place the place we are able to go and revitalize successfully these communities which were economically depressed for a few years due to the lack of manufacturing jobs,” he says.

Early clients have been fast to undertake the brand new merchandise, partly as a result of the startup doesn’t have to promote on the large volumes of conventional producers and may give higher customer support. (A typical producer, for instance, would possibly inform a buyer solely that their order will present up someday within the subsequent month; Solugen can supply detailed monitoring.) And a rising variety of corporations are searching for chemicals that may assist decrease their very own carbon footprints. Nonetheless, the shift received’t occur instantly. “The fact is, these are slow-moving industries,” Chakrabarti says. “We’re beginning to determine find out how to type of clinically hack our approach into having quicker adoption of our merchandise. However the actuality is, these provide chains have been round for years for some clients, and for them to change, it’s going to take a really excessive diploma of proof. And that takes time.”

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