Blue Biofuels, Inc. (OTC: BIOF)

Blue Biofuels, Inc. is a technology company focused on renewable energy, biofuels, and lignin. The company has developed and patented the Cellulose to Sugar (CTS) process, a continuous mechanical/chemical method that breaks down cellulosic material such as grasses and agricultural waste into fermentable sugars. The CTS patent was awarded in the United States as U. S. Patent No. 10,994,255 and has subsequently been granted in Japan, Australia, Russia and El Salvador. Patent applications are pending in the European Patent Organization, Brazil, China and the African Regional Intellectual Property Organization. In addition, the company holds a second U. S. patent (U. S. Patent No. 11,484,858B2) with corresponding international applications pending, and has three additional U. S. patent applications currently pending. The patented CTS system enables exact process control to maintain optimum reaction parameters for high efficiency. The company also licenses the Vertimass process, a patented one step method that converts ethanol into sustainable aviation fuel and bio gasoline. In January 2024, Blue Biofuels, Inc. formed a 50 percent joint venture with Vertimass called VertiBlue Fuels LLC, which aims to build an ethanol to SAF facility in Florida with an initial production target of 10 to 25 million gallons of sustainable aviation fuel per year, expandable to approximately 70 million gallons per year. The firm completed a pilot plant in 2023 and has since optimized the pre and post processing elements at pilot scale to establish operating cost estimates for a full scale commercial system.

As of the filing date, Blue Biofuels, Inc. has not generated any material revenue from its operations. The company plans to earn income by licensing its CTS technology to third parties interested in cellulosic sugar production. Revenue is also anticipated from the joint venture VertiBlue Fuels LLC through the production and sale of sustainable aviation fuel, bio gasoline and other renewable transportation fuels. Additionally, the firm intends to capture renewable fuel credits such as D3 RINs for cellulosic ethanol, D7 RINs for sustainable aviation fuel, and D3 RINs for bio gasoline. The company expects to apply for Clean Fuel Production Credits under Section 45Z of the Inflation Reduction Act, which offers up to $1 per gallon for qualified facilities meeting wage and apprenticeship requirements. Where applicable, the company will pursue Low Carbon Fuel Standard Credits, particularly in states like California that offer approximately $71 per metric ton of carbon dioxide reduction. The earlier SBIR Phase 2 Department of Energy grant of $1.15 million supported the pilot plant development and has been reported as successful to the DOE, although it does not constitute operating revenue.

Blue Biofuels, Inc. operates in the highly competitive renewable fuels sector where the majority of U. S. ethanol plants rely on corn as feedstock. The company’s competitive advantage stems from its patented CTS technology, which can process a wide variety of non food cellulosic feedstocks such as grasses, agricultural waste and dedicated energy crops at higher yields and lower cost than corn based ethanol. According to the firm’s internal analysis, feedstock like king grass can yield up to 3,500 gallons of ethanol per acre per year, whereas corn typically yields around 600 gallons per acre per year. The resulting cellulosic ethanol qualifies for the more valuable D3 Renewable Identification Number, which carries a market value of approximately $2.44 per gallon as of the filing date, compared to the D6 RIN for corn ethanol valued at about $1.40 per gallon. Sustainable aviation fuel produced via the licensed Vertimass process earns D7 RINs, providing additional credit revenue. The company also expects to benefit from federal clean fuel production credits under Section 45Z of the Inflation Reduction Act and from state low carbon fuel standard programs, which together can further improve the economics of its biofuel production relative to traditional corn ethanol producers.

The company anticipates serving fuel blenders that blend ethanol into gasoline, aviation fuel suppliers seeking sustainable aviation fuel for airlines, and participants in renewable credit markets who purchase D3, D7 and other RINs for compliance. Expected customers include major gasoline refiners looking to meet renewable fuel obligations, airlines aiming to reduce their carbon footprint with sustainable aviation fuel, and fuel traders that specialize in renewable fuel credit transactions. No specific customer names are provided.