18 October 2010 20:25 [Source: ICB]
New varieties of bioplastics will soon enter the market using renewable chemical building blocks
While compostable plastics such as polylactic acid (PLA), polyhydroxyalkanoates (PHAs) and starch-based blends are becoming prevalent in the consumer packaging and food service sectors, the durable plastics market is anticipating other new materials made from renewable-based feedstock.
Several renewable chemical companies are targeting the $1.3 trillion (€933bn) global polymers market with chemical building blocks such as succinic acid, acrylic acid, levulinic acid, sorbitol, ethylene, ethylene glycol (EG), butanediol (BDO), adipic acid (ADA), furantium, propanediol and glycerin, among others. There are several properties for durable plastics that cannot be met by compostables, says Jim Lunt, managing director of US consulting firm Jim Lunt & Associates. He notes that bioplastics use represents just 1% of the 230m tonnes of plastics consumed worldwide.
Global demand for bioplastics is expected to increase fourfold to 900,000 tonnes in 2013, according to US market research firm Freedonia Group. Germany-based trade association European Bioplastics group estimates that global bioplastics production will reach 1.5m tonnes by 2011 from the estimated 300,000 tonnes this year, while global capacity is expected to reach 2.3m tonnes by 2013.
"Conventional oil-based plastics remain cheaper for the time being, but bioplastics will be applied in more and more sectors and industries within the next few years," says Kristy-Barbara Lange, head spokeswoman for European Bioplastics. "Huge potential lies within the fields of consumer electronics and automotive. If certain challenges are met - such as availability of material - prices of bioplastic products will presumably adjust to a comparable level with conventional plastics."
GREEN PE START-UP
Brazilian polymers company Braskem started its new 200,000 tonne/year green PE plant late last month at the Triunfo petrochemical complex in Rio Grande do Sul. The company plans to build another facility, although the exact location is still being evaluated, said Braskem CEO Bernardo Gradin during the plant's inauguration. Braskem sources say the capacity of the second PE plant will be around 350,000 tonnes/year.
More than 80% of the production from the newly inaugurated plant has already been committed to clients in Europe, the US and Asia, according to Braskem. Customers for the green PE include US consumer goods companies Procter & Gamble (P&G) and Johnson & Johnson, Japanese cosmetics firm Shiseido, Japan-based automaker Toyota and Swiss packaging group Tetra Pak.
P&G will use the green PE in a pilot project for its branded hair care products Pantene Pro-V, and cosmetics Cover Girl and Max Factor, which will all officially be marketed next year. The brands' packaging will not have special labels indicating the use of the green PE, says Len Sauers, P&G's vice president of global sustainability.
Braskem's green PE price will carry a price premium as high as 66%, said Gradin. In spite of the premium, Gradin said demand has held up because it is competing against other renewable-based polymers and not against cheaper traditional PE.
Sauers acknowledges the premium attached to the green PE, but expects it to be reduced and eventually for the product to be at cost parity with petroleum-based PE when more of the plastics are used and scale is created.
US consulting firm Argeni estimates that Braskem's green PE will command a double-digit percentage premium over traditional PE.
"This is a dream come true in the highly competitive super commodity plastics market unless the premium cannot cover the manufacturing cost differential over conventional PE," says George Rodriguez, director of Argeni. "Green PE customers seem convinced that the premium is worth it. It will take time to determine what is actually achievable in terms of true versus theoretical costs."
BUILDING NEW MARKETS
The need for lower cost petrochemical-based polymers alternatives has become the focal point for the development of renewable-based monomer building blocks.
While the green factor is an added bonus, renewable-based chemicals, especially plastics, must be cost-competitive or even priced lower than traditional plastics in order to survive in the market, most renewable chemical companies noted at the Biobased Chemicals East Summit held in Boston, Massachusetts, US, in September.
US bio-ADA developers Verdezyne and Rennovia are targeting the nylon 6,6 market, which accounts for 85% of ADA demand in North America. Polyurethanes (PUs) account for 5% of ADA demand (see ICIS Chemical Business, September 27-October 3, 2010, page 22).
Petrochemical-derived PBS demand worldwide is currently around 3,000 tonnes/year, said Jim Millis, chief technology officer at US-based DNP Green Technology, in a presentation at the Biobased Chemicals East Summit. "PBS demand is expected to grow to 50,000 tonnes/year if the current monomer of succinic acid is replaced with bio-based product," he added.
DNP is marketing PBS with more than 51% bio-based succinic acid content produced by its newly acquired Chinese subsidiary Sinoven Biopolymer. Applications for the modified bio-PBS include food service coffee lids, cups, dishes, plastic cutlery, straws, stirrers, disposable razors, writing instruments and cosmetic packaging.
Netherlands-based specialty chemical company DSM is planning to produce bio-PBS derivatives from fermentation-based succinic acid through a newly formed 50:50 joint venture (JV) called Reverdia with French starch derivatives producer Roquette.
DSM is already selling bio-based engineering plastics under the trade name EcoPaXX, which contains 70% castor oil-based materials; and bio-composite resin Palapreg ECO, which contains 55% renewable-based materials, said Robert Kirschbaum, DSM's vice president, Open Innovation, at the Summit.
"If oil prices stabilize around $90/bbl, then all these technologies for bioplastics have potential"
Managing director, Jim Lunt and Associates
Novomer bio-polycarbonate polyols can currently address the global $8bn, 3.5m tonne/year composite resins market, said Peter Shepard, vice president of business development at Novomer, at the Summit. "Future growth opportunities also include foams and elastomers, with a global market valued at $6bn."
DEGRADING COMPOSTABLE PRICE
While many in the durable plastics market are waiting for full-fledged commercialization of these new renewable-based polymers, the compostable plastic industry is focusing its attention on lowering prices after going through years of development.
US-based PLA producer NatureWorks says its Ingeo resin is typically within 10% price parity with petrochemical-based plastics. "While NatureWorks and Ingeo have reached exceptional economies of scale, supply chain partners are still working through their own economies of scale and this for the moment is adding to price differentials. We do see this changing," says NatureWorks spokesman Steve Davies.
"Most brand owners find that they can overcome costs by passing on minor increases to their customers," notes Debra Darby, director of marketing and communications at US PHA producer Telles, a JV between Metabolix and agribusiness major Archer Daniels Midland (ADM), both US.
"While we find that bioplastic costs remain the biggest challenge facing brand owners, in some cases, brands can still absorb the cost increase as a part of a program to increase appeal of their products," adds Darby.
Another major challenge for novel polymers such as PLA and PHA is the difficulty in disrupting an already well-established petroleum-based plastics market.
"As the first new-to-the-world polymer in decades, Ingeo is competing with petroleum-based plastics that have long been optimized for performance in specific end-uses," says Davies. "That situation is beginning to change, with new tailored grades of Ingeo being introduced such as for durable applications and for nonwovens."
Food packaging and food service ware applications are the largest applications for both PLA and PHA plastics. Consulting firms Lunt and Argeni estimate that PLA prices range between 80 cents/lb ($1,764/tonne, €1,264/tonne) and $3/lb, while PHA prices are estimated at $2-$2.75/lb, depending on application.
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