Chemical feedstocks represent an intermediate step in the cost curve, and extracted oils from the Company’s algae can serve as "drop-in" replacements for conventional chemicals feedstocks.
Biochemicals are addressing an increasing number of applications within the broader chemicals market as bio-based technologies advance and governments prioritize the development of reliable substitutes for oil in the face of sustained increases in crude prices and energy security issues.
The Company is well positioned to take advantage of this rapidly growing opportunity, as the production cost profile already achieved at Shenandoah indicates attractive margins for high-value chemicals. In addition, the Company’s algal oil offers a high quality nutrient composition for the efficient production of plastics, resins, and lubricants. For example, one of BPA’s oils is enriched in oleic acid and could improve yield for the production of olefins, providing improved economics over commodity bio-based oils.