Enerkem goes global with rubbish idea

Humans dump a massive 2.12 billion tonnes of waste every year. If all this were piled into garbage trucks, they would line up around the world 24 times, according to non-governmental organisation The World Counts. However, it adds this is unsurprising since 99% of the things people buy are thrown out within six months.

While the vast majority of this waste is either put in landfills or incinerated, Canada-based Enerkem takes non-recyclable solid waste, which is rich in carbon, and transforms it into value-added products – namely, transportation biofuels or biochemicals such as methanol and ethanol.

“There’s huge demand, actually more than we can undertake,” says Enerkem chief financial officer Dominique Boies. “The world is
our oyster because the global issue
of trash disposal is so urgent. Nobody wants a landfill any more and transportation fuels are so bad for the environment.”

Green and clean

Companies worldwide are being legally required to reduce their carbon footprint. For example, in Europe the renewable energy directive requires the EU to fulfil at least 20% of its total energy needs with renewables by 2020. All member states must also ensure at least 10% of their transport fuels come from renewable sources by 2020.

Similarly, China recently imposed the ‘E10’ law, whereby 10% of all transportation fuel must consist of ethanol or biofuel. The country’s yearly accumulation of waste would require 1500 Enerkem plants to process it, each valued at $300m, on average, says Mr Boies. In Europe, 3 million metric tonnes of trash a year are shipped from the UK to be incinerated in Italy, France, the Netherlands or Germany – the equivalent of about 20 plants.

The demand for Enerkem’s technology comes from local governments, big oil and energy companies facing increased emission reduction targets, and landfilling or incineration businesses that are aware a transition to sustainability is the future, says Mr Boies.

Enerkem provides a turnkey solution and a one-stop shop: it structures the project, finds the location, negotiates with local authorities and provides the value-added equipment that creates well-paid jobs. Mr Boies says: “Maritime transportation companies are burning bunker fuel. They should go to jail. The pollution is a disaster. [It is a] similar thing for jet fuel. Enerkem’s technology can produce biofuels for ships and jets. This is our value proposition, and the beauty of it is that everyone makes money.”

Indeed, Enerkem has one of the lowest biofuel production costs in the world, and provides some of the cleanest biofuels on the market, according to Mr Boies.

Expansion strategy

Enerkem currently has only one plant in operation, the world’s first full-scale commercial facility to produce cellulosic biofuels and chemicals from non-recyclable materials, located in Edmonton, Canada. During its last round of financing in early 2018, the company had a valuation north of C$1bn ($760m), an impressive amount considering it has only 220 employees and has only just started earning revenue.

The company recently closed the largest ever financing in Canada for cleantech, raising C$280m. By the end of 2018, it is set to be the largest producer of second-generation fuels in North America, according to Mr Boies.

Although Enerkem wants to operate worldwide, Europe, North America and China are key to its business strategy, says Mr Boies. The company’s second facility, based in Quebec, is scheduled to begin construction in late 2018, while a project in the Netherlands has recently been confirmed.

The Netherlands plant will be the first of its kind in Europe to provide a sustainable alternative solution for non-recyclable wastes, turning 230,000 metric tonnes of waste into 280 million litres of biofuel, yearly. There are projects in the pipeline for Barcelona, Minneapolis, and China.

Wasting away in China

In early 2018, Enerkem signed an agreement with Sinobioway Group worth more than C$125m in the form of equity investment. Its aim is to accelerate Enerkem’s global expansion and create a joint venture to build more than 100 Enerkem facilities in China by 2035. The first plant is expected to start construction in 2020.  

With more than 4000 employees, Sinobioway is a flagship conglomerate in China’s bio-industry. Company chairman Dr Aihua Pan says: “We are excited to partner with a leading Canadian cleantech company to help meet our country’s commitment to reducing greenhouse gas emissions and move towards renewable energy.”

In January 2018, China implemented the ‘green fence’ policy it announced in 2013, after a decision to stop taking in the world’s waste. For decades, the country has been one of the planet’s most used landfill and incinerator destinations, at vast expense to its environment and air quality.

For this reason, Mr Boies calls the Chinese market a “land of opportunity”, adding: “[The Chinese] recognised us as a great investment opportunity and way to access cleantech for their market. They’re trying to replicate Enerkem in China, with its own manufacturing infrastructure in China.”  

If Enerkem, as a small company, can successfully manage its growth, show people that its solution works, and deliver its large, long-term industrial projects on budget, spec and time, it faces huge opportunities. But it needs to move fast. 

“Everyone on the technical side agrees that Enerkem is the only company in the world to have commercialised this technology. So now it’s about rolling it out. As a disruptor, we need to plug the market quickly and turn our tech into the global norm,” says Mr Boies.