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‘We anticipated the direction but not the speed’ — Photo: ADITYA

BioFuel from cellulose: Instead of using the grains we are looking at cellulose based sources of carbon to produce energy, says Thomas M. Connelly, Executive Vice President & Chief Innovation Officer of DuPont. In the 19th Century, DuPont, a U.S. based company, was producing explosives. One century later, it became a chemical company. It became one of the leaders in chemistry and material science and produced products like nylon and Teflon that are used by millions every day. DuPont is ranked number one among chemical companies for the number of patents filed by the Chemicals Patent Scorecard. With the arrival of the 21st Century, the company has also taken to biofuels and agriculture. When a company that has produced many innovative products from petroleum trains its guns on biofuels, one can be sure that the name of the game is changing. Dr. Thomas M. Connelly, Executive Vice President & Chief Innovation Officer, DuPont, United States, spoke to R. Prasad on how the company forayed into biofuels and the way the company deals with patents filed. Excerpts: What made DuPont get into biotechnology?

DuPont has been in the chemistry and material science business. Our Chairman looked at what next is good for the company and recognised the rapid pace of development in life sciences, biology and biotechnology. We looked at biology as a promising area in the 21st Century.

I want to emphasize that chemistry and material science are still key enabling technologies. We wanted to add to these the new strands of life sciences. We wanted to restrict to agriculture, nutrition, industrial biotechnology particularly taking biology into areas of fuels, materials and other areas as well. But we were clear that we did not want to get into pharmaceuticals.

Any particular reason for DuPont not getting into pharmaceuticals?

Competing with other pharmaceuticals companies is something we decided against. We will not bring anything special. We will simply be another participant and there are many capable players in that area already. We look to other areas to participate in human health but not in pharmaceuticals. We are not saying no to human health but to be yet another drug company, we said no to it.

Some of your biotechnology products use food crops as raw material. Don’t you feel that you are diverting food crops to produce biofuels?

We are looking at other additional sources beyond food crops. We anticipated this when we began our work in 2002-03 when we began our work on cellulose as an additional source of carbon.

We recognised that the future of bio-based space will be constrained by the limitation of carbon from food crops. We began to work with the U.S. Department of Energy in a project in 2003 to use other parts of the plant. So instead of using the grains we are looking at cellulose based sources of carbon to produce energy. We have had a running start because long before the world realised the fuel versus food debate, we knew we had to get there.

Back in 2003 nobody was talking about this. In 2008 it is a big prominent question. We thought we had a decade to get there. Now we recognise that we got to get there much faster.

But how is it that DuPont, which thinks much ahead of others, was caught on the wrong foot on this issue of using food crops?

It is not a question we did not recognise. We thought the timescale on which we will move there would be different. Keep in mind, for example, that certain other agricultural commodities were trading at low prices for decades. And frankly, many farmers were looking for additional markets for their products.

So while we recognised that in time the supply trends would become a limiting factor, that the grand plan would accelerate in a matter of five years we never anticipated. We thought it would be at least ten years. The pace at which this has been progressing has been surprising to us.

I think it is because of the global emphasis on climate change, run up in the prices of petroleum. All these are pushing us to non-food crop sources of carbon material for the production of fuel.

I should say we anticipated the direction but not the speed at which we would reach there.

How are you utilising your strengths in chemistry to produce biofuels?

We have focussed our attention on fermentation based processing of sugar from cellulose to ethanol or higher alcohol products. I would say the important thing is that we were able to combine market insight with foresight. Of course with the technology we have and what we can develop we will get to the intersection in the future before our competitors can get there.

Why do you use fermentation technology?

If you take fermentation based processing along with non-grain based sources of carbon then there is a good potential to produce very large volumes of biofuel. Vegetable based oil has certain limitations. There will ultimately be a volume constraint.

How close are you to converting cellulose to ethanol?

We can convert cellulose material to ethanol today. The question is the economic challenge of doing this at the same cost as grain based ethanol. Our goal is to achieve a firm authority by 2010 in the research laboratory. If we pilot it we should be able to commercialise in reasonable quantities by 2012.

What is the total number of patents filed so far by Dupont?

At the end of 2007, DuPont had over 20,000 patents in force globally with over 6,000 of these in the U.S. DuPont filed nearly 2,000 patent applications in the U.S. in 2007. This number has been increasing by about 6 per cent per year over the last several years.

Do you take every patent filed to the final product stage?

No, patents have other strategic purposes including, for example, broad protection of a technology space.

What do you do with those that the company is not interested in taking forward?

We typically license rather than sell our intellectual property. Licensing is an option we consider and actively pursue in some cases. We average 10 to 30 patent licenses annually.

How do you see this as a business model — filing patents and then licensing them to third parties?

We do not view patent licensing as a business model, but rather as a value capture strategy from our R&D effort in those instances where we have intellectual property that is no longer aligned with our businessstrategies.

What is the ballpark figure on the revenue generated by adopting this strategy?

Licensing income reported in our Securities and Exchange Commission (SEC)Form 10K Annual Report for 2007 was $125 million.