Biobased Chemicals, Industrial Sugar and the development of Biorefineries

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Information about Biobased Chemicals, Industrial Sugar and the development of Biorefineries

Published on March 5, 2014

Author: AHigson



This presentation, developed as part of the Interreg NWE Bio Base NWE project, was presented at the UK Institute of Food Research Annual Food and Health Symposium. It provides an overview of developments in the biobased chemicals market and how the UK in developing an ecosystem for the development of Industrial Biotechnology including the potential for knowledge exchange in North West Europe.

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 Copyright © NNFCC 2014.

Members of Clients & Partners • Multinationals & SMEs • Public Organisations • Government • Research Institutes • Universities • R&D Collaborations • Research Councils & TSB • EU Projects Copyright © NNFCC 2014.

Bioeconomy The production of renewable biological resources and their conversion into food, feed, bio-based products and bioenergy Biogenic Resource Copyright © NNFCC 2014. 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. Copyright © NNFCC 2014.

Bioeconomy Value Chains Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014.

Commodities, specialties & pharmaceuticals Pharmaceuticals Food Ingredients Cosmetics Flavours & Fragrances Home & Personal Care Polymer Additives Solvents Lubricants Copyright © NNFCC 2014. 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% Copyright © NNFCC 2014. 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 Copyright © NNFCC 2014.

Over 50 commodity or platform chemicals in development or commercialisation. Copyright © NNFCC 2014.

Strong growth in biobased plastic capacity The LEGO® Movie Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014. 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 Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014. 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 Copyright © NNFCC 2014. 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 Copyright © NNFCC 2014.

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.” Copyright © NNFCC 2014.

Polyethylene Terephthalate Copyright © NNFCC 2014. 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 Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014. © 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 Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014.

% 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) Copyright © NNFCC 2014.

Ensuring sustainable development Copyright © NNFCC 2014.

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) Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014.

Biorefineries The opportunity to develop integrated chemical complexes Source IEA Bioenergy Task 42, NNFCC Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014.

UK economic growth based on key Industrial Innovation Eight Great Technologies Bioeconomy Innovation • Agri-Science • Synthetic Biology • Advanced Materials Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014.

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 Copyright © NNFCC 2014. 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. Copyright © NNFCC 2014.

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. Copyright © NNFCC 2014.

Process demonstration and scale up Copyright © NNFCC 2014.

Copyright © NNFCC 2014.

Copyright © NNFCC 2014.

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. Copyright © NNFCC 2014.

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. Copyright © NNFCC 2014.

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. Copyright © NNFCC 2014. Environmental considerations Development (performance & cost)

More information • IB Catalyst • Bio Base NWE • NNFCC services Email: @biobasedchem Copyright © NNFCC 2014.

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. | | |

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