Cleaner water through chemistry
Houston’s Solugen replaces chemicals often used in wastewater treatment with renewable alternatives
Treating wastewater generated by petrochemical production is an environmentally vicious cycle. The chemicals used to treat the wastewater prevent toxic materials from seeping into the environment, but they also include phosphates that cause algae blooms, which can block sunlight from underwater plants, deplete water’s oxygen levels and further harm aquatic life. With few alternatives, however, these chemicals are widely used, especially in petrochemical centers such as the Gulf Coast.
Solugen, a Houston company founded in 2016, aims to break that cycle by replacing the chemicals often used in wastewater treatment with renewable substitutes. Solugen’s technology starts with corn syrup, which is reengineered into a hydrogen peroxide product that can be used not only for wastewater treatment, but also for products such as fertilizers and even hand sanitizer.
As a fringe benefit, Solugen says the acid produced as a byproduct of its treatment process can break down minerals that can clog and corrode pipes.
“In petrochemical production, the temperatures are so high, such dangerous chemicals get used, and the chemicals break up,” said Sean Hunt, Solugen’s co-founder and chief technology officer. “The challenge with the side products is that there are nasty chemicals and emissions that end up in wastewater.”
Investors have been receptive to Solugen’s treatment technology, which the company brands as BioForge. Solugen last month said it closed a $350 million funding round that valued the privately held company at about $1.8 billion. Investors included Singapore sovereign wealth fund GIC, British investment-management firm Baillie Gifford and New York asset manager BlackRock.
“Those investors are very credible, and that’s a good sign,” said Glenn Daigger, professor of engineering practice at University of Michigan, whose expertise includes water infrastructure and water management. “It suggests that the company is moving in the direction of a commercially viable approach.”
Those investors are banking on an industrial wastewatertreatment industry that’s projected to grow with global energy consumption. The U.S. oil and gas industry generates about 900 billion gallons of wastewater per year, the Environmental Defense fund estimated in 2019. Meanwhile, U.S. hydraulic fracturing, or fracking generated about 21 billion gallons a year in
wastewater between 2005 and 2014, according to a 2015 Duke University report.
By comparison, U.S. homes and businesses produce about 12.4 trillion gallons of wastewater per year, according to the U.S. Environmental Protection Agency.
Globally, annual revenue of industrial wastewater treatment products will increase by about 17 percent, or by about $4.66 billion, between 2020 and 2024, the London market-research group Technavio forecast in February. About 60 percent of that growth is expected to come from the Asia-Pacific region, while the world’s biggest of makers of industrial wastewater treatment products include Dow, Ecolab and Hitachi.
“The demand for energy is continuously increasing across the world, especially in emerging economies such as China and India. This has led to a significant rise in the consumption and demand for oil and gas reserves,” Technavio wrote. “As a result, wastewater generation has increased in oil and gas E&P (exploration and production) activities.”
In the beginning
Solugen’s genesis dates to 2010, when Solugen co-founder and CEO Gaurab Chakrabarti – then a student at the University of Texas Southwestern Medical Center in Dallas – was introduced to Hunt, who was earning a Ph.D. in chemical engineering at the Massachusetts Institute of Technology, through Hunt’s then-girlfriend and now wife.
After years of correspondence over Chakrabarti’s research on enzymes and Hunt’s research on chemical manufacturing, the two co-founded Solugen in 2016. Hunt says the name “Solugen” was derived from the idea that the product would be water soluble (for the “Solu”) and that the company would be generating a peroxide product (for the “gen”). He also added that “S” and “G” in Solugen was representative of the co-founders’ first names Sean and Gaurab.
The company set out to take advantage of Chakrabarti’s work on enzymes to create a hydrogen peroxide-type product to treat contaminated water by oxidizing it and eliminating many of the contaminants. Only, instead of being produced with environmentally harmful phosphates, Solugen’s peroxide is produced with corn syrup, whose byproduct is organic acids.
The company’s first round of funding came in May 2016 when Solugen won $10,000 at an MIT business competition. The company soon after was accepted into the Y Combinator, the Silicon Valley accelerator program, where Chakrabarti and Hunt spent the first three months of 2017. The received $5 million in seed money from Y Combinator.
Today, Solugen has about 120 employees and is growing rapidly.
Solugen produces about 10,000 metric tons of its cornsyrup-based chemicals a year from a plant that sits on five acres in southwest Houston.
Solugen said that its plant is the first factory in Houston that produces no emissions or wastewater discharge, as it’s powered by wind energy. The company declined to elaborate on how the plant eliminated wastewater discharge or powered itself without wind. The company also operates a plant in West Texas.
Solugen declined to disclose its revenue, profits or losses. But the company, in a 2020 Forbes article, forecast that its 2020 revenue would jump to more than $30 million from $12 million in 2019.
Chakrabarti estimated that company’s output would triple this year and may jump as much as tenfold in 2022 from 2021. He added that Solugen is deriving a growing percentage of its business from both the agriculture industry and the construction industry to broaden its customer base.
Chakrabarti declined to identify any of the company’s customers, noting only that Solugen’s water-treatment customers were “service-level providers,” while agriculture customers were fertilizer blenders and distributors.
Side gig
During the early phase of the pandemic, when medical supplies were in short supply, Solugen produced hand sanitizer on the side when the product was in low supply.
The company blended its hydrogen peroxide, which is an antiseptic, with alcohol from a nearby ethanol plant, according to last year’s Forbes article. Chakrabarti said the company donated “many truckloads” of it to various communities in need last year.
Granted, rising demand for corn syrup as a feedstock for non-food processes may create additional issues for companies dependent on corn such as Solugen, according to Daigger. Droughts and wildfires have made the pricing of crop-based feedstock more volatile, while some analysts have said that greater usage of crops for fuel increases the chances of food shortages. While Solugen didn’t address any concerns over corn prices, some oil refiners that planned to open biofuel plants are delaying the projects because of high prices for corn, a feedstock for ethanol, and soybeans, a feedstock for biodiesel.
Using food crops to produce fuels and chemicals has been controversial, in part because it increases competition for staples such corn and raises food prices. In addition, the carbon reduction benefits of these plant-based products may be offset by emissions from the energy used to produce them.
“It takes energy to harvest corn and convert it into corn syrup, but it’s also done on a fairly large scale,” said Daigger, the University of Michigan professor. “But it does compete with the production of foodstuffs, so it’s not so simple.”