Rising oil costs make US bioplastics competitive - NatureWorks

15 February 2011 22:18  [Source: ICIS news]

HOUSTON (ICIS)--Current oil and corn prices have made bio-based chemical feedstocks competitive in the US marketplace, but further capacity expansions will depend on government incentive programmes, the chief executive of US bioplastics firm NatureWorks said on Tuesday.

“From a pricing point of view, with oil at $90/bbl and corn at $7/bushel, we are price-competitive with polystyrene [PS] and PET [polyethylene terephthalate],” said Marc Verbruggen, chief executive of NatureWorks.

“It is no longer a question as to if or whether bioplastics will take a significant part of the traditional chemical industry,” he added. “It’s when, where and how fast.”

Verbruggen spoke at the Next Generation Bio-Based Chemicals Summit in San Diego, sponsored by Infocast.

Verbruggen said the US bioplastics industry has the ability to replace 100% of the 4bn lb/year PS market and 25% of the 6bn lb/year PET market.

But to reach those levels, bioplastics firms would need about 2% of the US corn supply, he noted.

“To take over, we will need billions of dollars,” Verbruggen said. “Who will spend and when?”

To that end, government policymakers should turn their focus to biochemicals, rather than biofuels, he said.

Verbruggen said that many regions across the globe had corn feedstock, but that producers were hesitant to enter the biofuels market because of the food-versus-fuel debate. Chemicals, on the other hand, can be made with less corn feedstock and with strong margins, he said.

“Chemicals take up 8% of oil today and generate 40% of margins,” Verbruggen said. “Biochemicals are already similar.”

He noted that the US bioplastics market was growing at about 25%/year.

But because of limited resources for bioplastics firms, any capacity expansions would be limited in scope over the near-term and would depend largely on which governments offer appropriate incentives to drive spending.

NatureWorks has announced plans to build a second polylactic acid (PLA) facility, but the site has yet to be named.

“Where will the assets be built, in North America or in different parts of the world?” Verbruggen asked.

The Next Generation Bio-Based Chemicals Summit lasts through Thursday.

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By: Ben DuBose
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