What Happened at Choren? – History & Events

If you have not heard by now, Choren Industries has begun bankruptcy proceedings. For those who don’t know, since 2009 I have worked as the technology advisor for the major investor and primary funding source for Choren’s day-to-day operations.

I have just returned from a visit to their plant in Freiberg, Germany. Due to the nature of my relationships with my employer and with Choren, I have to be guarded about what I say. To be clear, I do not work for Choren, and thus am not writing this as a Choren spokesman of any sort. But I do want to shed a bit more light on the situation.

First of all, to give a bit of background on Choren, the company’s roots go back to 1990. You can read their entire history on Choren’s website, but here are the highlights.


  • In 1998, Choren completed a pilot plant in Freiberg, Germany where they first produced methanol, and then later gas for electrical power and finally Fischer-Tropsch diesel. They tested a number of different feedstocks, including wood. That pilot plant ran from 1998 to 2004, and fuel was supplied to DaimlerChrysler and Volkswagen for fleet testing. Operating data were also being gathered to scale up the process.
  • Scale-up from the pilot plant was begun in 2003 at the Freiberg site. The gasifier would be scaled up from the pilot plant scale of 1 MWth to 45 MWth.
  • Shell’s Fischer-Tropsch technology was being used in the plant, and in August 2005 Shell became an investor in Choren. Daimler and Volkswagen later joined as investors. One of the consequences of Shell’s investment was that the plant — still under construction — had to be brought up to Shell’s safety standards. This was absolutely the right thing to do, but it caused a delay in the construction of the plant. Additional safety standards were implemented in the wake of the BP accident in Texas City that killed 15 people. Once more, this was the right thing to do, but caused delays and additional costs.
  • I personally became aware of Choren in 2007, and made a visit to their Freiberg plant in April 2008 (documented here) from my home at that time in the Netherlands. I was generally impressed with what they were doing, but I also raised questions around costs. My conclusion at that time was that they would eventually work out the kinks, but I thought it could take a while.
  • In 2009, I accepted a job as Chief Technology Officer for the man who is presently the largest shareholder of Choren (although to be clear, Choren is not his only investment). Before I accepted the job we had a lot of philosophical discussions about the difficulty of scaling up new technology, as well as the amount of time it takes to do so. We both shared a belief that oil prices are inevitably headed much higher, and in that case we both believed the Choren process would be ultimately economically viable.
  • Choren also started commissioning the gasification section in 2009. Thus began the long process of running for a period of time, and then shutting down and making adjustments. One of the biggest challenges in doing this is that there is no blueprint; nobody had run a gasifier like this at this scale on a biomass feedstock. So the plant had to work through many new technological challenges, and with a staff of 290 employees, the time it took to work through the issues was costly.
Choren Industries
Source: gettyimages.com

Because they had elected to forgo government funding, private investors have borne the development costs over the past few years. Several of those investors — including Shell — have exited at various points due to the time and cost it was taking to work out the technical issues. Ultimately, my employer was largely funding the ongoing operations of Choren from his pocket.

While the plant has made good progress, commissioning took far longer than expected. I had in fact warned that it would take at least a year to start up the plant once it was mechanically complete, but it was taking even longer than I expected.

It finally got to the point that all investors decided to stop funding development because all of the technical bugs had not been worked out. It wasn’t that there were any technical show-stoppers, it was just that the timing of how long it would take to work through the issues was uncertain.

Comparison to Range Fuels

choren outside

It is inevitable that some will compare this situation to that of Range Fuels. However, there are some very important differences. First and foremost, I made it very clear that my criticisms of Range Fuels were never about failing. As my February 2010 essay on Range Fuels explicitly stated:

I want to make one thing crystal clear. I am not criticizing failure here. That is normal and expected. Failure is a part of what it takes to learn and move forward. What I am criticizing is the nature of the failure; that it was primarily because inexperienced people were making claims they shouldn’t have made, and taxpayers are going to get stuck with the bills. Personally, I have a problem with my tax dollars being squandered away by smooth-talking salesmen.

The fact is that most biofuel ventures based on new technology are going to fail. That is the nature of technology development. I have been involved now three times at some stage of scaling up technology from the lab to a demonstration or commercial scale (four if I include a retrofit to an existing butanol unit that I piloted and ultimately commissioned at full scale).

There are always challenges to be overcome, and often those challenges are show-stoppers. I know firsthand the nature of these challenges, which is why it drives me crazy to hear people talk of producing fuel for $1 a gallon when they haven’t even built any sort of demonstration facility.

But some are more realistic about the risks of developing new technology, and therefore they don’t make wild, over-hyped claims that have little basis in reality. Choren had very little to say in the press, preferring to just work on their issues and attempt to get the technology running.

That is one of the things I most admired about the company. For most of Range Fuels’ lifetime, they lived by the hyped-up press release and made numerous claims that simply were not credible. On the back of those claims, they drew in and squandered a lot of taxpayer money.

While Choren chose to develop without the benefit of government money, acceptance of government money was also never the basis of my criticisms of Range (or other technology ventures). It is simply that when one does accept tax dollars, there needs to be some accountability for the hype. My criticisms are the circumstances under which funding via tax dollars is achieved; that is whether tax dollars are obtained essentially on the basis of groundless claims.

In that case, companies are rewarded for hype, and the public is therefore bombarded by endless hype about solutions to our energy problems that never materialize. This is dangerous because it diminishes what I believe is a sense of urgency in developing real energy solutions. After all, where is the sense of urgency when 20 companies are all promising that they have the solution in hand? At least one of them has to be credible, right?

Where to Now?


At this point, Choren is looking at several options so they can carry on with the process of commissioning the technology. At present, I don’t know whether I will have any role in future Choren developments. I continue to believe that the long-term future of gasification is bright, and have cited on several occasions the fact that there are natural gas and coal gasification facilities around the world producing at scales of tens and even hundreds of thousands of barrels per day. So this is a technology that I view as far more scalable than most biofuel options that are on the table.

The catch is that it is more difficult to gasify biomass than it is to gasify natural gas or coal and produce syngas of a high enough quality for fuel synthesis. (Gasifying biomass isn’t hard really, but getting the right hydrogen/CO ratio and a high enough purity is where the challenges lie).

The Choren technology works, as demonstrated by years of run time at a smaller scale. But as I always warn people, scale-up issues can take some time to work through. When you first start up, there are a hundred little problems. You shut down, fix them, and restart to find there are still a dozen problems. You continue this process until all of the problems are solved, and then comes the challenge of running reliably for an extended period of time.

Sometimes, there are knockout factors as technologies are scaled up. That wasn’t the case here; as I said the gasifier has accumulated thousands of hours of run time at a demonstration scale. Technical challenges have been solved in a systematic manner, and to date all of the challenges I have seen are solvable. The only questions are around the amount of time and money it will take, and whether either are in sufficient supply to allow the commissioning to finish.

For more educational posts like this one, you can always visit energytrendsinsider.com.