ITOCHU Announces Investment in U.S. Venture Company That Possesses Second Generation Bioethanol Manufacturing Technology

March 5, 2012

March 5, 2012 -- ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that it has acquired shares in ZeaChem Inc. (headquartered in Colorado, U.S.A.: Jim Imbler, CEO; hereinafter “ZeaChem”).
Together, ITOCHU and ZeaChem will acquire partners in each region to investigate the expansion of the technology worldwide, in second generation bioethanol business sectors that use ZeaChem’s technology, and in the future in chemicals business sectors that produce from biomass (green chemicals industry), with the aim of commercializing the technology in 2014. Also, we will create new business through project investment and development, by continuing to actively pursue the development of leading-edge technologies that are environmentally friendly and promising.

About Second Generation Bioethanol and ZeaChem technology background
As of now, ethanol is manufactured primarily from foods such as corn and sugar cane, and the volume that can be produced is limited. As a result, production of bioethanol, which is derived from inedible biomass and can be procured in large volumes, is attracting worldwide attention, and is known as second-generation bioethanol or cellulosic ethanol. Inedible biomass mainly refers to wood grown on land that is unsuitable for farming or agricultural residue such as rice straw and wheat straw. Since it is renewable, it is environmentally friendly, cheaper to obtain than conventional raw materials, and can be procured worldwide. However, until now the ethanol conversion efficiency when producing ethanol from biomass sources such as these was extremely low compared with conventional ethanol production, and it could not be produced cheaply.

The greatest drawback to conventional ethanol fermentation was the generation of carbon dioxide gas. By doing away with this, and by making good use of the biomass residue that until now has had to go to waste, ZeaChem has succeeded in substantially raising the ethanol conversion efficiency.

ZeaChem’s unique, next-generation technology has the ability to utilize diverse, non-food biomass resources, including wood such as poplar, eucalyptus and acacia, as well as energy grasses, and agricultural residues. This biomass flexibility allows for deployment of the technology in wide-ranging geographic regions. The highly efficient conversion of these biomass resources into multiple fuel and chemical products, which are currently fossil fuel derived, delivers environmental and economic benefits to established markets and industries. ZeaChem products include bio-based chemicals such as acetic acid and propylene and biofuels including ethanol.

Wood that can be used all year round and does not require a storage warehouse is the most convenient raw material for actual production, and by switching tree varieties between eucalyptus, poplar, and acacia, it is possible to choose the production area, regardless of the temperature. Moreover, if ethanol production is located next to the areas where the trees are grown, the cost of transporting raw materials can be kept down. ZeaChem’s process does not choose the types of biomass to use, so the large volumes of agricultural residue that remain in harvest season may be used and deployed worldwide.

Further, ZeaChem’s process makes it possible to produce chemicals such as propylene. This changes the structure of chemical production that relies on fossil fuels, offering great potential environmental advantages, and as such the process is attracting worldwide attention.