the dominant player in technology for making biofuels, not to make the biofuel itself. Codexis will sell Shell the critical enzymes. The enzymes in question are still being tested at lab scales, and the company needs to prove they will work during the all-important scale up phase over the coming years. If Codexis can pass those tests, bigger revenue streams from biofuel could start flowing in 2013, 2014 or 2015 Even when the real money starts flowing, Shaw has no plan to turn around and invest it in giant refineries of his own. “My No. 1 priority is to make sure Shell gets to market in a timely fashion,” Shaw says.
He adds: “We don’t want to be an oil company. Cleantech companies that want to produce biofuel themselves are delusional. It’s a fool’s errand,” Shaw says. “Low capitalized companies can’t compete with large companies like Shell.”
There’s one other big swing for the fence at Codexis, that’s in carbon capture. While biofuels gets most of the press, this is actually an application that could have a much bigger impact on greenhouse gas emissions and global warming. The U.S. and the world needs to cut its carbon emissions 80 percent by 2050, from baseline readings in 1990, according to the Intergovernmental Panel on Climate Change. So if you want to start cutting, policymakers in the U.S. tend to look at four primary sectors-generating electricity, transportation, industry, and residential and commercial use. People could switch to electric cars, buses, trucks, and electric heating and cooling. But if that happens there’s going to be a lot more demand for electricity. And more than half of the nation’s electricity, and the leading source of air pollution, comes from the same source-coal.
Carbon capture, in which the CO2 gets piped and stashed underground, is one of ideas getting support from the U.S.Department of Energy, but nobody has proven it can be done at any large scale. Codexis has secured a $4.7 million grant under the ARPA-E program to pursue an enzyme that absorbs CO2 like a natural enzyme in the body, but that is rugged enough to withstand high industrial heat and high pH, Shaw says. If this enzyme can be integrated into an industrial process—and this is still several years away—then “it could be the perfect solution to our nation’s energy crisis,” Shaw says.
The ultimate vision, Shaw says, is to build Codexis into a diversified enzyme developer and producer along the lines of Novozymes and Genencor. His goal is to be profitable by 2012. And Codexis will be making enzymes for more than one industry, which it hopes will balance out economic cycles from one business to the next. It’s quite a grand plan for a young public company trading at less than $10 a share, with a market capitalization of less than $350 million today.
“We’ll be partnered with some of the world’s greatest companies. Our business looks a bit like a software model. It will be our software, running on other people’s hardware,” Shaw says. “My ambition is really to be the industry standard. If we are successful to have our technology as an industry standard, across industries, we could be worth billions in 5 to 10 years.”
