Biobased Chemicals, Industrial Sugar and the development of Biorefineries

Biobased chemicals, Industrial Sugar and
development of Biorefineries
Adrian Higson
Food and Health ISP Annual Symposium
4th March 2014

A specialist ‘not for profit’ Bioeconomy consultancy
Celebrating 10 years of Bioeconomy development

Company Vision
We view biobased technologies as key components
of the low carbon economy delivering economic,
social and environmental benefits.
We believe the bioeconomy will create sustainable
business opportunities for feedstock suppliers,
technology and project developers, manufacturers
and investors.

Copyright © NNFCC 2014.

Political

To provide clients with a holistic view
of feedstock, technology, policy and
market development across the
bioeconomy, enabling them to make
informed business decisions and
develop sustainable business
strategies.

Market Dynamics

Company Mission

Economic
Social
Technological
Legal
Environmental


Members of

Clients & Partners

• Multinationals & SMEs
• Public Organisations
• Government
• Research Institutes
• Universities
• R&D Collaborations
• Research Councils & TSB
• EU Projects


Bioeconomy
The production of renewable
biological resources and their
conversion into food, feed, bio-based
products and bioenergy

Biogenic
Resource


Bioeconomy

Biotech

EUROPEAN BIOECONOMY
Innovating for Sustainable Growth
A Bioeconomy for Europe
February 2012

A mechanism to drive sustainable development covering Environmental, Economic
and Social policy.
Today’s bioeconomy in Europe
• is worth an estimated €2 trillion
• accounts for 22 million jobs
• 9% of total employment in the EU
Each euro invested in EU-funded bioeconomy research and innovation is estimated to
trigger €10 of value added in bioeconomy sectors by 2025.


Bioeconomy Value Chains


Horizon 2020 bioeconomy funding ~€4bn (double the funding
available through PF7)
Bio-based Industries
Public Private
Partnership
The EU contributes €1
billion to the research
and innovation
program, European
industries have
committed to another
€2.8 billion

http://bridge2020.eu/

Commodities, specialties & pharmaceuticals
Pharmaceuticals
Food Ingredients
Cosmetics
Flavours & Fragrances

Home & Personal Care
Polymer Additives
Solvents
Lubricants

Examples

Bio Chemicals and Bio-Based Polymers
(supplying food, feed and chemical using industries)

Global market size
~ 50 million tones

Chemical Derivatives
Natural Products
Biopolymers
Alcohols
Other

Naval Stores
Oleochemicals
Amino Acids
Aliphatic acids

54%

7%

4%

17%
20%


1%
1% 7%

5%

1%

Fermentation Products

EU Industrial Policy:
A Stronger European Industry for Growth and Economic Recovery
October 2012
Europe needs to reverse the declining role of industry in Europe.
A vision focused on investment and on innovation.
The priority areas are markets where new technologies are ready to deliver new
products or increase productivity.
The volume growth of EU bio-based chemical products* up to 2020, is estimated at
5.3% p.a.
Resulting in a market worth € 40 billion and providing over 90,000 jobs within the
biochemical industry alone.
* Including bio-plastics, bio-lubricants, bio-solvents, bio-surfactants and chemical feedstock


Over 50 commodity or platform chemicals in development or
commercialisation.


Strong growth in biobased plastic capacity

The LEGO® Movie


Biobased Products - Market drivers and Challenges
• In use functionality
Product performance • End of life options

Cost of production

• Feedstock cost
• Process (operational) cost
• Capital cost

Value Proposition

• Product differentiation
• Green Premium


Market

Feedstock Pricing – A new normal
300.00

Price index, 2005 = 100

250.00

200.00

Agricultural Raw
Materials

150.00

Food

100.00

Crude Oil
(Petroleum)

50.00

0.00

Source: International Monetary Fund


Succinic acid value chain
Succinic Acid

Polybutylene
Terephthalate

1,4-Butanediol

Tetrahydrofuran

Copolyester Ethers

Deicers/Coolent
Polytetramethylene
Ether Glycol
Thermoplastic
Polyurethanes

Solvent

Plasticisers

g-Butyrolactone

Spandex Fibres

Fuel Additives
Fine & Speciality
Chemicals

N-Methyl -2Pyrrolidone

N-Vinyl-2Pyrrolidone

Fine & Speciality
Chemicals


2-Pyrrolidone

Fine & Speciality
Chemicals

Polyvinyl
Pyrrolidone

Ethylene value chain
60%
Ethanol

Ethylene

Polyethylenes

Styrene
Monomer

Ethylene
Oxide/Glycol

EDC

7%
Polymers/Rubbers

14%

12%

Polyester

PVC

7%
Other

Image courtesy of Braskem


Alpha Olefins

PVA

50 shades of green - Every generation now comes with a degree
of environmental consciousness
•

Baby boomers (born 1946-1964)
– Silent Spring 1962
– Air quality, water quality

•

Generation X (Baby busters) (born 1964-1977)
– Union Carbide and Chernobyl disasters.
– Exxon Valdez oil spill.

•

Generation Y (Millennials) (born 1980’s through1990’s)
– BP Oil Spill in the Gulf of Mexico
– An Inconvenient Truth and Hurricane Katrina

•

Generation Z (today’s children)
– Recycling, solar panels, hybrid cars, energy saving light bulbs

Source: Jacquelyn Ottman: The
new rules of Green Marketing

Green Premium? – Price vs value
Business to Business

Business to Consumer

Coca Cola Executive: “If Coca-Cola were to lose all of its
production-related assets in a disaster, the company would
survive. By contrast, if all consumers were to have a sudden
lapse of memory and forget everything related to Coca-Cola,
the company would go out of business.”


Polyethylene Terephthalate


18 million tonnes

Fibre

42 million tonnes

Film

PET

Bottles

5 million tonnes

PET - the other half?
•
•
•

Accessible via isobutanol (Gevo or Butamax) or dimethyl furan (UOP)
Alternative routes through biomass fast pyrolysis (Anellotech) or catalytic
reforming (Virent) and via muconic acid (Amyris, Genomatica)
Avantium developing PEF polymers

OH

O
O


Bio-based materials – Novel or drop in?
Strengths

Weaknesses

Opportunities

Threats

• Drop in – known targets and downstream products
• Novel – exploits attributes of biomass or biological
processing

• Drop in – number of unit operations required
• Novel – requirement for product development
• Drop in - rapid route to market through existing
infrastructure and know how
• Novel – provides new or improved functionality

• Drop in – production never achieves cost
competitiveness
• Novel – immature supply chain and market
awareness


© NNFCC

Biobased plastics face technical hurdles
“Snack Attack: Chip Eaters Make Noise About a
Crunchy Bag.” The Wall Street Journal Aug. 18,
2010.
Marketing slogan "Yes, the bag is loud, that's
what change sounds like."

Lego investigating
biobased plastic but it
must meet stringent
quality requirements.

The LEGO® Movie


Feedstock choice & Value Chain Acceptance
Land use and food vs fuel concerns
must be considered.
However the biobased products are
differentiated from biofuels &
bioenergy.
e.g. scale, alternatives

CO2 capture
and use

Hierarchy of
brand owner
preferences

By-products,
residues &
wastes
Biomass Crops & Forestry

Food crops
WWF Biobased Panda


% of available land

Bioplastic Land Use Scenarios (2030)

50
40
30

Chemical driven

20

Biofuel stalled

10

Biofuel driven

0

Bioeconomy

Polymer demand – 428 million tonnes
Land availability – 250-800 million ha (Source FAO)


Ensuring sustainable development


Cellulosic ethanol – First steps in industrial sugar fermentation
Beta Renewables Crescentino plant commercial-scale
cellulosic ethanol plant, in Crescentino Italy, started
operations in Q4, 2012. Capacity 40,000 tons of per year

POET-DSM Advanced Biofuels’ first commercial cellulosic
bio-ethanol plant is on schedule to start up June 2014.
Initial capacity 20 million gallons (~60,000 tonne per year)

DuPont's commercial-scale cellulosic ethanol facility in
Nevada, Iowa. Once fully operational, the facility will
produce 30 million gallons (~90,000 tonne per year)


Industrial Sugar – Next Steps
M&G Chemicals launches green revolution in the polyester chain
Shanghai – 18 November 2013
M&G Chemicals announces today its decision to construct a second-generation biorefinery in the region of Fuyang, Anhui Province of China for the conversion of one
million metric tons of biomass into bio-ethanol and bio-glycols.

Increasing number of Industrial sugar platforms ready for
commercialisation


Biorefineries
The opportunity
to develop
integrated
chemical
complexes

Source IEA Bioenergy Task 42, NNFCC


Building a UK ecosystem in Industrial biotechnology
Industrial Biotechnology Leadership Forum
UK Plc becomes a leading centre of competence in fine
and specialty chemicals
Increased uptake of biocatalysis and fermentation in
the existing UK chemical industry

UK becomes a top three producers of high value
chemicals in plants
UK becomes a leading centre of know-how in
producing commodity and intermediate chemicals
through biocatalysis and fermentation
Source: AD Little Roadmap


UK economic growth based
on key Industrial Innovation

Eight Great Technologies
Bioeconomy Innovation
• Agri-Science
• Synthetic Biology
• Advanced Materials


A global leader in Synthetic
Biology
Synthetic Biology Leadership Council
Over £60 million for synthetic biology
• £1 million synthetic yeast genome.
• £10 million for multi-partner Innovation
and Knowledge Centre (IKC).
• £20 million for multidisciplinary research
centres.
• £10 million for a synthetic biology seed
fund.
• £18 million for DNA synthesis.
• £2 million to support training


Biorefining

BBSRC
IB & Bioenergy
Networks
Structural Biol and Biocat.
Biocatalyst
Discovery

Systems and
Synthetic Biology

Integrated
Technologies

Agri-Food Chain

Anaerobic
Digestion

Novel Chassis

Gas
Fermentation

Microalgae

Biopharma

Bioprocessing


Natural Products

Microbial
Metabolites

Plant
Metabolites

Cross Cutting

Glycoscience

Metals in
Biology

Membrane
Transport

Multi-funder collaboration
providing £45million in
2014/15
Translation of research on
biological processes into
industrial processes.

Enable the manufacturing of
new products or improve
manufacturing of existing
products.
http://www.bbsrc.ac.uk/business/collaborative-research/tsb-competitions/ibcatalyst.aspx


5 Funding streams
•

Early stage: Translation - Academic-led experimental work that builds on existing
discoveries.

•

Early stage: Feasibility studies – Academic or business led projects to explore the
commercial potential of an early-stage scientific idea through feasibility studies.

•

Industrial Research – Business led projects building on recent discoveries to develop
new technologies or processes.

•

Late stage: Pre-experimental feasibility studies – Business led projects to test
proven processes at a greater scale of operation or with commercially equivalent
equipment for the first time.

•

Late stage: Experimental development – Business led projects to demonstrate that
performance seen previously is repeatable during extended testing at a commercial
scale.

Process demonstration and scale up


Bio Base NWE is a three-year project (2013-2015)
by the European Commission to support the
development of the bio-based economy in North
West Europe (NWE ).
The €6.2 million project will help entrepreneurs
and companies to facilitate innovation and
business development in bio-based technologies.


Scope
1. A network, linking bio-based economy experts, advising on how to develop new
ideas into marketable products, from the first feasibility study or market analysis
up to funding and investment scenario’s.
2. Innovation coupons for SME’s to perform proof-of concept studies and/or to
demonstrate innovative bio-based technologies at Bio Base Europe Pilot Plant, an
independent, state of the-art demonstration facility in Ghent, Belgium
(technology feasibility, cost-assessment or barrier analysis).
3. Programs and tools for training and education to help tackle the shortage of
skilled professionals in North West Europe’s bio-based industries.


Summary
Feedstock
pricing &
volatility

The bioeconomy will create
sustainable business opportunities for
feedstock suppliers, technology and
project developers, manufacturers
and investors.

Bio
economy

The UK has the research base to
capitalise on these opportunities.

Technology

Support (funding & facilities) for
technology development is in place.

The UK needs to demonstrate
innovation capacity through
technology commercialisation.


Environmental
considerations

Development

(performance
& cost)

More information
• IB Catalyst
• Bio Base NWE
• NNFCC services
Email: a.higson@nnfcc.co.uk

@biobasedchem


Celebrating 10 years of Bioeconomy
development
NNFCC is a UK based consultancy with
expertise on the conversion of biomass
to bioenergy, biofuels and biobased
products.
We help industry solve complex
business challenges and provide vital
evidence for policy makers.

|

| www.nnfcc.com | enquiries@nnfcc.co.uk

Biobased Chemicals, Industrial Sugar and the development of Biorefineries

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