Final Report: Direct Conversion of Municipal and Agricultural Wastes to Biodiesel and Ethanol Utilizing a Unique Extremophilic Fungus

EPA Contract Number: EPD14014
Title: Direct Conversion of Municipal and Agricultural Wastes to Biodiesel and Ethanol Utilizing a Unique Extremophilic Fungus
Investigators: Kozubal, Mark
Small Business: Sustainable Bioproducts, LLC
EPA Contact: Manager, SBIR Program
Phase: I
Project Period: May 1, 2014 through April 30, 2015
Project Amount: $99,944
RFA: Small Business Innovation Research (SBIR) - Phase I (2014) RFA Text |  Recipients Lists
Research Category: Small Business Innovation Research (SBIR) , Pollution Prevention/Sustainable Development , SBIR - Biofuels


The United States produces significant quantities of waste materials that are discarded. These wastes include organic components of municipal solid waste (MSW), biosolids from wastewater treatment plants and agricultural wastes. The release of these materials and their byproducts into the environment can have serious consequences, such as pollution of ground and surface water resources and spread of disease. Current technologies to convert waste materials into fuels typically are limited by poor conversion efficiencies, the requirement for significant inputs and controls to sustain the conversion process, and the low cost of the produced fuel (methane). Consequently, implementation and maintenance of these systems often require significant monetary subsidies.
Sustainable Bioproducts has developed an efficient, economical and scalable process for conversion of waste substrates such as organic municipal solid wastes, wheat straw and corn stover to lipids for biodiesel, biolubricants or other valuable industrial oils. The technology is based on the use of a novel extremophilic microorganism found in Yellowstone National Park. This microorganism is capable of hydrolyzing 80–90 percent of pretreated lignocellulose to soluble components followed by conversion to easily extractable oils. Sustainable Bioproducts’ innovative process represents a departure from current technologies by directly converting a wide variety of waste materials into valuable fuels. The simplicity, scalability and enhanced efficiency of waste-to-fuel conversion using the company’s technology will enable onsite processing with significant economic advantages compared to current technologies. Sustainable Bioproducts envisions that this technology will be game changing for the waste-to-biofuels industry and that the financial benefits will be a strong impetus for application by municipalities and farming operations. Implementation of this process on a large scale would result in a significant reduction in greenhouse gas emissions and decreased use of fossil fuels.

The objectives of this EPA Phase I work were to (1) evaluate Sustainable Bioproducts’ process with organic municipal solid waste (MSW) and biosolids from waste treatment plants; (2) “fine-tune” the company’s process for converting these feedstocks using a bench-scale consolidated bioprocessing system; and (3) undertake a preliminary evaluation of the techno-economic feasibility of Sustainable Bioproducts’ process at a commercial scale.

Summary/Accomplishments (Outputs/Outcomes):

Research conducted by Sustainable Bioproducts under this Phase I award is summarized as follows:
Sustainable Bioproducts developed a simple, effective and economical process for conversion of organic MSW to lipids and other commercially valuable compounds at high yields without the need for expensive commercial enzymes or harsh feedstock pretreatment. These high yields are, in-part, attributed to the fact that the company’s process uses a proprietary microorganism that has a full suite of potent enzymes to degrade feedstocks and convert them to lipids.
Conversion yields as high as 215 g extractable lipid/kg dry weight of MSW feedstock were achieved under optimal conditions. These exceptional lipid yields equate to approximately 62 gallons of lipids per metric ton of MSW. Lipids produced by this process are easily harvested and converted into commercial products such as biodiesel, biolubricants and other high-value compounds.
Fatty acid profiles indicate that strain MK7 lipids are ideal for biodiesel and also have significant value as renewable oils and waxes for higher-value products including biolubricants (high oleic acid), paints, adhesives, packaging, PVC production, rubber additives and cosmetics.
High resistance to contamination was observed, even during growth on non-treated feedstocks such as raw sewage or biosolids. Additionally, growth on raw sewage or biosolids imparted a pleasant aroma to these materials. Deodorizing and decontaminating organic MSW and wastewater treatment biosolids is an important aspect of waste-to-fuels processes, especially near populated areas.
Residual biomass from Sustainable Bioproducts’ process will be a valuable fertilizer with bioavailable nitrogen, phosphorus and potassium. Furthermore, the company’s process adds high value plant hormones, which can potentially enhance the value of our residual biomass (after lipid extraction) for use as a biofertilizer.
An initial techno-economic analysis was conducted by Sustainable Bioproducts and an outside engineering firm to determine feasibility of the company’s process on an industrial scale. Detailed calculations and estimates for costs (capital and operational) and revenue indicate that the company’s process will be profitable and competitive with traditional vegetable oil sources such as soybean oil.


EPA funding for this project enabled Sustainable Bioproducts to show that its process is capable of producing easily extractable lipids from waste feedstocks at yields and rates that are commercially viable. Because of this and many other advantages, the company envisions that its technology will be game changing for the biofuels industry and that the financial benefits will be a strong impetus for wide spread application. Sustainable Bioproducts has developed strong relationships with major industry players and has significant commercialization assistance and investor interest, which is imperative for its success in the industrial oils market.

Supplemental Keywords:

waste-to-energy, biodiesel, ethanol, fuel, extremophilic fungus, strain MK7, greenhouse gas emission

SBIR Phase II:

Direct Conversion of Organic Municipal Solid Waste to Lipids Using an Extremophilic Fungus