Apr 20, 2022
On May 14, 2021, we participated in the Benzinga Global Small Cap Conference, where President and Chief Executive Officer Oliver Peoples, Ph.D. answered key questions about our work with Camelina in a Fireside Chat session with Cassidy Shell of Cleantech Group.
In this session, which focused on disruptive innovation, Dr. Peoples shared valuable insights into Yield10's Camelina platform and our future plans to create high-value products using this platform. We've compiled some of the most interesting questions and answers from this session to help you better understand Yield10's innovative work with Camelina and how it may contribute to global sustainability in the immediate future as well as the long term.
There's a number of reasons why Camelina is really very exciting. First of all, it has a very short growth cycle. It grows very quickly, in about one hundred days from planting to harvest. That's very fast. And that opens opportunities in the Pacific North-West in particular. It's a very interesting rotation, more than some of the other crops like wheat, pulses, and canola.
Secondly, because of its fast growth cycle, it's also a very exciting platform for what we would call a sustainable cover crop for double cropping in the Corn Belt. The reason why cover crops are of growing importance is to reduce some of the negative impacts of commodity agriculture like nutrient run-off and to restore soil carbon. So, we have the sustainability benefits with a very unique platform that happens to be biologically extremely well-suited to making new high-value products—and we're talking two very high-value products from this platform.
The one that's obviously closest at hand is the use of Camelina as a low-carbon index oil for renewable diesel. That's a more economically challenging value proposition. But what we're seeing with the 5.5 billion gallons of renewable diesel capacity being installed in the US, is a demand-supply disconnect with vegetable oil to supply essentially low-carbon fuels.
The second aspect is something that we're really excited about. It's a plant-based drop-in replacement for fish oil. When you think of fish oil, you are obviously aware of the nutraceutical applications, which are really important for human health, development, and wellness. The primary source of that oil is harvested fish from the ocean, either consumed directly, but increasingly used as feed in aquaculture.
So, if you think about salmon as being a great source of omega-3 fatty acids, very healthy and nutritious protein, those omega-3 fatty acids are coming from harvested fish in the ocean. And there, what we're seeing is reduced supply and overfishing, which of course will increase with the global population growth. This really creates a disconnect, it's not sustainable. So, we are developing a drop-in replacement, plant-based source of fish oil, based on engineered Camelina systems.
One of the things we believe could be an absolute game-changer is a concept that came to fruition very recently from the point of view of an overnight technology success, which was 30 years in the making. I filed the first patent on the concept behind it many years ago—I'm not going to say how many decades, but it was more than one.
But in the last year and a half, the technology teams have made great progress in demonstrating that there's another path towards commercializing this. So it's still in its early days and it's going to take another four or five years. I'm referring to technology that could be used to capture carbon from the air and make it a sustainable, very low-cost bioplastic directly in camelina seeds, with two really important co-products which are (1) oil for renewable diesel and (2) protein for food production.
This would be a tremendous sustainability story essentially built around renewable fuel, food, and PHA bioplastic, the difference being that it's all driven by enhanced economics and low cost.
In the nearest term, renewable fuel is driven by low-carbon fuel standards. So, this is really great, tremendous investment in what they call renewable diesel. And for renewable diesel, you start with waste oil. Given the volumes of waste oil that are being produced already, most of it is probably being used up, so we're seeing a supply-demand disconnect in vegetable oil, which is why we're also seeing booming commodity prices in agriculture as the demand for this oil is driving more production.
So that's the main driver, the low-carbon fuel standard. I think, inevitably, as vegetable oil prices in the grocery store increase, we're going to have the same food-fuel debate. Over the longer term, we think the solution is to use Camelina as a second crop to actually add to the production [of oil that could be ultimately used as renewable fuel]. And we have some calculations that show that growing Camelina in sequential growing seasons in a 12-month period with soybean can double oil production per acre. So, there's some tremendous upside driven by that.
The omega-3 oil is a strong driver for sustainability but it's also economical. Simply put, there isn't enough fish oil left in the sea to supply the growing demand for aquaculture. Salmon production is growing at 7% per year and we see an opportunity there to generate somewhere around half a billion dollars by 2030. This is a tremendous opportunity.
With PHA bioplastic, the main driver is not regulation, it's consumer backlash against the failure of a lot of recycling and the transport of plastic waste to China being banned. Suddenly the whole entire consumer products food sector is getting a lot more active in this space versus the raw petroleum resin producers who would rather maintain the status quo.
So we're seeing drivers from large companies and all of this ties into ESG investing. Our differences? We are focused on a strong ESG profile, very sustainable, carbon-negative, but more importantly, cost-effective.
If you would like to access more insights from Dr. Peoples regarding Yield10's work with Camelina and our future plans, please feel free to watch the full Fireside Chat. Don't miss out on this opportunity to dive deeper.
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