Global trends in the bioeconomy

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Global Trends in the Bioeconomy:
An introduction to the Interreg Bio Base NWE Project

Dr Adrian Higson
Trondheim, Norway
21st March 2013

NNFCC: The Bioeconomy Consultants

NNFCC

The Bioeconomy

The aggregate set of economic operations in a society that use the
latent value incumbent in biological products and processes to capture
new growth and welfare benefits for citizens and nations. (OECD)

Biological tools Biomass

Biotechnology Bio-based


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Bioeconomy value chains

Food & Feed
industry

Food Food
Retailers
ingredients industry

Biomass Biomass Biomass Fuel Fuel blend &
provision trading refining production retail

Chemical Chemical Chemical using
Retailers
production industry industry

Pharmaceutical
industry

Feed Feed
ingredients industry

Biomass
power &


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A specialist ‘not for profit’ Bioeconomy consultancy

Company Vision
We view bio-based 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.

Company Mission
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.


NNFCC

10 years supporting Bioeconomy development

Services Clients & Partners

• Future market analysis • Multinationals & SMEs
• Feedstock logistics planning • Public Organisations
• Sustainability strategy development • Government
• Technology evaluation and due • Research Institutes
diligence • Universities
• Project feasibility assessment • Transnational Collaborations
• Policy and regulatory support • European Framework
• Network & Facilitation Projects


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EUROPEAN COMMISSION – PRESS RELEASE
Brussels, 13 February 2012

Commission proposes strategy for sustainable
bioeconomy in Europe

EU Context

It includes agriculture, forestry, fisheries, food and pulp and paper production,
as well as parts of chemical, biotechnological and energy industries.

• 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.


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Feedstock Pricing – A new normal
The relative costs of crude oil, food basics and agricultural
materials have moved significantly over the last 20 years.

300
Price index, 2005 = 100

250

200
Commodity Agricultural Raw Materials Index
- Monthly Price
150
Commodity Food Price Index - Monthly Price

100 Crude Oil (petroleum), Price index - Monthly
Price

50

0
Apr-97

Dec-98

Apr-02

Dec-03

Apr-07

Apr-12
Dec-93

Dec-08
Oct-94
Aug-95

Oct-99
Aug-00

Oct-04
Aug-05

Oct-09
Aug-10
Jun-96

Jun-01

Jun-06

Jun-11
Feb-93

Feb-98

Feb-03

Feb-08

Feb-13

NNFCC: The Bioeconomy Consultants Source: International Monetary Fund

NNFCC

Complexity and Opportunity

Functional
Materials
Content

Chemicals
Increasing value
Biomass Carbon Content
Liquid & Gaseous Decreasing volume
Fuels

Energy Content Heat & Power

NNFCC: The Bioeconomy Consultants © NNFCC

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Biomass – A love hate relationship!

• Available on demand
Strengths
• Carbon source

• Cost
Weaknesses
• Physical nature & low energy density

• Energy generation (heat and power)
Opportunities • Liquid transport fuels
• Chemicals and materials

• Competition for land
Threats
• Environmental pressure


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A higher value commodity
market for biomass?
1967 – There’s a great future in plastics

2012 - There’s a great future in bio-
based plastics
The Graduate (1967),
Plastics production: projected growth

2000

1600
Plastic production: medium growth
Million tonnes

1200 Medium
2020 339 million tonnes
Low
2030 434 million tonnes 800
High

2050 712 million tonnes 400

0
2010 2020 2030 2040 2050

© NNFCC The Bioeconomy Consultants
NNFCC: © NNFCC

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Market expansion and development activity
Currently over 80 companies actively commercialising
over 50 commodity or platform chemicals

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Methanol

Formic Acid

Ethanol
Ethylene
Ethylene Oxide

Ethylene Glycol (MEG)

Acetic Acid
Ethyl acetate
Bio-based chemicals

Epichlorohydrin

Acetone

isoPropanol

Propylene

Propylene Glycol

1,3-Propanediol

Lactic acid

Acrylic Acid

n-Butanol

iso-Butanol

iso-Butylene
Butadiene

Succinic acid

2,3-Butanediol

1,4-Butanediol

Tetrahydrofuran

Isoprene

Adipic acid

HMDA

Benzene

Toluene

Paraxylene

Terephthalic acid

Styrene


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Industry drivers & concerns

End of life options

Product performance

Technology development

Green branding & corporate sustainability

Production economics

Feedstock economics

Policy intervention & indirect effects


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Material End of Life – New Opportunities

EU Waste Framework Directive 2008/98/EC

Prevention

Re-use

Recycling

Recovery

Land fill or incineration


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NNFCC: The Bioeconomy Consultants Image courtesy BASF

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Bio-based chemical platforms
Polybutylene
Succinic Acid 1,4-Butanediol Terephthalate

Tetrahydrofuran Copolyester Ethers
Deicers/Coolent
Polytetramethylene
Ether Glycol

Solvent Thermoplastic
Plasticisers Polyurethanes

g-Butyrolactone Spandex Fibres
Fuel Additives
Fine & Speciality
Chemicals

N-Methyl -2- N-Vinyl-2-
Pyrrolidone 2-Pyrrolidone
Pyrrolidone

Fine & Speciality Fine & Speciality Polyvinyl
Chemicals Chemicals Pyrrolidone


NNFCC

Bio-based chemical platforms

60%
Ethanol Ethylene Polyethylenes

7%
Styrene
Polymers/Rubbers
Monomer

Ethanol production ~ 70 million tonnes
Ethylene 14%
Polyester
Oxide/Glycol
Ethylene production ~ 110 million tonnes
12%
EDC PVC

7%
Other Alpha Olefins

PVA

PET Collaborative


NNFCC

Bio-based materials – Novel or drop in?

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

• Drop in – number of unit operations required
Weaknesses
• Novel – requirement for product development

• Drop in - rapid route to market through existing
Opportunities infrastructure and know how
• Novel – provides new or improved functionality

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


NNFCC

Development Pipeline

• Ethylene glycol  Opportunities for bio-based
• Epichlorohydrin C3 and C4 intermediates
Today • Lactic acid
• Propanediol  Niche opportunities in
compostable packaging
• Succinic acid
• Butanol
Near term • Butanediol
 Value adding opportunities
• Propylene in co-polymer development

• Isoprene
Medium • Butadiene
term • Acrylic acid
• Terephthalic acid


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Future Technology Synthesis gas based fermentation

Developing microorganisms
capable of converting syngas
to valuable platform chemicals

Aug. 13, 2012 - Joint Development Agreement for
Bio-Based Butadiene

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The challenges

Technology Strategic Sustainability

• Biomass crop • Integration into • Direct land use
yields existing value change
• Biomass chains • Indirect land use
composition • Financing change
• Logistics • Policy robustness • Biodiversity
• Enzyme • Standards & • Emission (land,
development labels air, water)
• Fermentation • Public • Social impacts
yields procurement
• Novel products


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Do we have enough land to feed the planet and
produce the low carbon energy, fuels and materials
needed by a population expected to reach 9 billion
by 2050?


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Regional Development
Sustainable agriculture & forestry
Established agri supply chains
Strong technology base
Sustainable agriculture Limited political support
Established agri supply chains
High residue availability
Strong technology base
Strong political support Agricultural sustainability?
Land availability?
Strong political support
Access to growing markets
Established cultivation and
processing
Available arable land
High crop yields (sugar cane) Large arable land
Good residue availability potential
(bagasse) Limited access to skills
Good access to growing markets Limited access to markets


NNFCC

Land availability and use
Global arable land could be doubled

However, what is the limit of sustainable expansion?

What are the environmental and societal implications of
expansion and land use change?


NNFCC

Biopolymer Scenarios - land requirements (2030)

50
% of available land

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)


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Land requirements – the bigger picture


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Feedstock Development

Today
Sugar, starch and oil crops.
Near term
Builds on current Agricultural residues.
Future
agricultural value chains.
Bolts on to current Algae, Biomass crops and
Expensive and tied to food agricultural production.
& feed chains. carbon dioxide.
Requires collection and Requires development of
logistical development. new supply chains and
Technology improvements cultivation technology.
required to meet current
economics.

NB - The use of algae as a production tool should not be confused with its use as a feedstock


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To maximise the transnational value of algal
pilots across NWE, by creating an integrated
Network that incorporates an up to date
inventory and in which pilots collect and share
data.

To identify the political, economic, social and
technological opportunities for sustainable
exploitation of algae within NEW.

To combine information in an ICT-based tool
which can guide decisions, identify gaps in
knowledge and capability and provide a
roadmap for stakeholders.


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Sustainability through project control
Round Table on Sustainable Biofuels

12 Principles for sustainable biofuel production
– Legality
– Planning, Monitoring and Continuous Improvement
– Greenhouse Gas Emissions
– Human and Labour Rights
– Rural and Social Development
– Local Food Security
– Conservation
– Soil
– Water
– Air
– Use of Technology, Inputs and Management of Wastes
– Land Rights


NNFCC

Summary - Bio-based Materials outlook

• Consumer preference
Strengths • Reduced carbon footprints & fossil energy use
• Novel / Improved function

• Low volume / High costs
Weaknesses • Immature supply chain
• Market confusion

• Oil price volatility
Opportunities • Capture C3 and C4 markets
• Co-development with fuel industry

• Feedstock supply
Threats • Alternative feedstocks (coal, gas)
• Environmental pressure


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UK and Norway Capabilities and Opportunities for Joint Working
on Biorefining and Industrial Biotechnology?

Review Basis
• Industrial Competence
• Research Competence
• Feedstock Opportunity

Recommendations
• Tailored networking
• Relationship building through exchange programs
• Information exchange
• Industrial stakeholder engagement
• Build programs around FP7 and other EU programs
• Review ERA-Net participation
• Joint funding calls as a basis for interaction


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Hypotheses examined and rationalised to give focus
areas

Renewable Raw Materials

Markets
Forestry

Bulk chemical-
Marine by
using industries Technology Areas
(Biofuels and
products
Chemicals)

Microbial strain Macro &
Speciality
Algae and Biocatalysis development & microalgae
Ingredients (feed
Marine Fermentation cultivation
and chemicals)
Organisms


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Process demonstration and scale up


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Bio Base NWE
Supporting the development of the bio-based economy
in North West Europe


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Aims
To support the development of the bio-based economy in NWE

• To acquaint companies, research centers and education centers of NWE with Bio
Base Europe
o Bio Base Europe Pilot Plant: independent facility to address upscaling needs
o Bio Base Europe Training Center: to address specific training needs for
operators of the bio-based economy

• To assist companies by giving technological support

• To aid companies, research centers and education centers of NWE to network
internationally

• Political support for the bio-based economy by giving SMEs a voice, and by
developing a common strategy


NNFCC

Summary
Bioeconomy Drivers
Trends to watch

Renewable versus Raw material
supply
Nuclear/Unconventional gas/CCS

Solid biofuel versus liquid biofuel

Bioenergy versus bio-based materials Bio
economy
Biodegradable versus durable Bio-
based plastics Environmental Technology
concerns development
Impact of NGLs on C2/3/4 platforms


NNFCC

The NNFCC provides high quality, industry leading consultancy

for more information contact us

Email - enquiries@nnfcc.co.uk
+44 (0) 1904 435182

Follow us on Twitter @NNFCC

• Future Market Analysis • Technology evaluation & associated
• Feedstock Logistics Planning due diligence
• Sustainability Strategy • Project feasibility assessment
Development • Policy and regulatory support


Global trends in the bioeconomy

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