Verbio SE is a German bioenergy company that produces sustainable biofuels and chemicals from biomass sources. Its products include bioethanol, biodiesel, and biomethane. The company also manufactures fertilizers and animal feed, with global operations and a strong focus on R&D.
How did growing up on a farm in Bavaria and your experience in grain trading lead you to pivot towards biodiesel production?
I’m from Bavaria, the son of a farmer who ran a trading business in southern Germany, supplying farmers in the mountains with hay and straw. In 1992, I moved to East Germany, where agriculture was much larger in scale. I started a trading business focused on oilseeds like rapeseed and cereals. By the mid-'90s, Europe faced an oversupply of grains and oilseeds, and the EU introduced a set-aside land policy to address this. I began exploring alternative uses for rapeseed oil and cereals, which led me to discover biodiesel in 1995.
That year, I started working with farmers to supply rapeseed for biodiesel production, setting up tolling contracts with companies in Austria and Belgium. At that time, biodiesel production was virtually nonexistent in Germany. I started with about 1,000 tons of biodiesel per quarter, which quickly grew to 3,000 tons per day. The surge in production was fueled by rising oil prices between 2003 and 2008. In 2001, we built our first biodiesel plant in East Germany, followed by our first ethanol plant in 2004. As biodiesel became successful, we expanded into ethanol production, particularly from rye, as rapeseed couldn’t be grown every year.
How did the challenge of using rye residue in ethanol production lead to the development of renewable natural gas technology at Verbio?
Early on, we realized that the residue from ethanol production, called stillage, couldn’t be used as animal feed, so we had to find another use for it. This led to the development of a process combining ethanol production with renewable natural gas. We placed stillage in digesters, where bacteria convert it into CO2 and renewable natural gas, which is then fed into the natural gas grid. This is now amongst the largest such operations in Europe.
In 2017, seeing the growth of the U.S. ethanol industry, we decided to expand our technology to the U.S. We invested $200 million to build a renewable natural gas plant that processes corn, which is now being commissioned.
How has the demand for renewable fuels like biodiesel and ethanol evolved since the '90s, and how do you view their role in addressing food security concerns?
The debate about food security, in my view, is misplaced. Before 2000, U.S. agriculture supplied markets in North Africa and the Middle East, but countries around the Black Sea, particularly Russia and Ukraine, took over that role. The U.S. Renewable Fuel Standard (RFS), implemented by George W. Bush in 2005, aimed to replace fossil fuels with renewable fuels like ethanol. Today, ethanol makes up 10% of U.S. fuel, and remains the cheapest fuel option even with oil prices as low as $65 per barrel. This policy has supported the biofuels market and helped maintain demand for U.S. corn.
An interesting example of this shift occurred in 2018 when the Indian government approached us. In Punjab, farmers were burning rice straw, contributing to severe air pollution. We invested in a plant to process this straw into renewable natural gas. India has since implemented its own biofuel policy. This shift is part of a broader effort to reduce dependence on imported oil and gas, showing how biofuel production can also support food security by providing a new income source for farmers.
How has Verbio’s biorefinery process made your technology a more climate-friendly alternative to traditional ethanol production?
Our biorefineries are highly efficient in CO2 reduction. When considering the entire value chain, including emissions from farming to production, our process reduces CO2 emissions by up to 90% compared to fossil fuels. The use of C4 plants like maize, which capture CO2 efficiently, enhances this process.
Additionally, our ethanol production requires significantly less energy than traditional U.S. plants, where 90% of energy goes into drying the residues to market as feed. Our plants use about half the energy required by U.S. plants, making our technology a more climate-friendly alternative.
What challenges do you face in scaling up this technology, especially regarding the costs and adoption of biofuels?
The main challenge is the infrastructure needed to scale our technology, particularly pipeline systems for transporting renewable natural gas. In the U.S., with its established agriculture and high yields, the process is easier to implement. However, in countries like India, the lack of gas pipeline systems complicates things.
The challenge is not just technological but logistical. We need both professional agriculture and existing infrastructure to make this work. Renewable natural gas costs are lower in the U.S. due to these advantages, but without the right infrastructure, replicating the system in other regions is difficult.
How do you view the current regulatory landscape for biofuels, and what steps is Verbio taking to protect itself from market manipulation?
Regulatory challenges are growing, particularly with the rise of fraudulent practices in the biofuels market. For example, palm oil, which was banned in Europe due to deforestation concerns, is still entering the market labeled as waste oil or residues. We've raised this issue with the European Commission, but proving fraud is difficult, especially when it involves countries like China. This influx of fraudulent products puts pressure on the European biofuel market, undermining local producers like us.
At Verbio, we prioritize transparency in our supply chain, ensuring all feedstock is traceable. However, Europe's lack of reliable control mechanisms leaves the market vulnerable to manipulation. To safeguard our operations, we’re calling for stronger regulatory measures to verify that products labeled as residues truly are and for stricter enforcement to level the playing field.
In addition, we invest in new technologies and production to broaden our range of goods to other markets than the biofuels segment. We are currently installing a production line for bio-based specialty chemicals based on rapeseed methyl ester to provide the chemical industry with sustainable green molecules soon.
