16 April 2012 00:00 [Source: ICB]
Bio-based chemicals have a long history. But the future holds greater promise as rapid development of the sector offers customers alternate supply chains compared with the traditional petroleum routes. There will be feedstock risks, but advances in technology should boost competitiveness.
As recently as the late 1940s, the world depended on bio-based processes to produce many chemicals.
The acetone-butanol-ethanol fermentation process provided critical solvents from sugars, while another sugar-based fermentation process dominated acetic acid production. Products also made extensive use of bio-based feedstocks, including cellulose.
Rayon, the first synthetic fabric, and celluloid, the earliest form of film stock, are partially derived from bio-based sources. Whale oil was used as a lamp oil and lubricant before being displaced by petroleum.
The history of the modern chemical industry is largely that of these bio-based products falling by the wayside as petroleum derived replacements became available. Although today some bio-based chemicals continue to be produced - ethanol, citric acid, oleochemicals, ascorbic acid and industrial enzymes, to name a few - petrochemical feedstocks have long dominated the chemical industry.
But recent developments and a change in the world view regarding energy and the environment may erode that dominance.
Heightened consumer concerns about sustainability have combined with a feedstock price rise among traditional chemicals to promote a surprising wave of innovation, finding new feedstocks and processes for producing bio-based chemicals - and in some cases, dusting off and improving old ones.
Unlike these innovators' historical forbears, many see long-term potential to be cost-competitive with conventional production routes.
BIO-BASED CHEMICAL DEVELOPMENT
For much of the 1990s, renewable technology innovators were focused on creating biofuels − primarily ethanol and biodiesel. However, during the past decade, many shifted interest towards bio-based chemicals production. They hope to capitalize on the potential advantage afforded by a non-standard feedstock, traditional sustainability concerns, and the price premium afforded chemicals over fuels. Over the past few years, a series of quiet successes have provided additional impetus.
In late 2006 and early 2007, US-based Dow Chemical and Belgium-based Solvay began the process of converting their traditional epichlorohydrin (ECH) production processes into ones that use bio-based glycerin as a feedstock. Both recently began large-scale production.
Also in 2007, Canada-based S2G Biochem successfully commercialized a process to hydrocrack bio-based sugars into mixed glycols.In perhaps the most spectacular success of a bio-based process, that year also saw US-based DuPont and UK-based Tate & Lyle successfully implement a novel process for producing 1,3-propanediol (PDO) from corn sugar using a genetically modified E. coli strain - an achievement that garnered the research teams involved the "Heroes of Chemistry" award from the American Chemical Society.
New innovators are hoping to replicate these success stories. While some look to provide new products for old end-uses, others seek to provide alternative supply chains for bulk chemicals, competing directly with existing traditional producers.
But whether providing new products or helping bio-based chemicals stage a return, all of these ventures share a common characteristic - no longer content to replicate the tired processes of the past, they leverage the capabilities of modern process development and biotechnology.
In the flood of innovation for bio-based chemicals, there has been no clear winner in terms of technology. In bio-based alcohols (chart on page 21), players have chosen a diverse variety of feedstocks and processes.
The value chains being developed for bio-based chemicals are illustrative of the best advances in process technology.
One could be forgiven for conflating bio-based chemicals technology with fermentation biotechnology. One common innovative solution for the production of bio-based chemicals is to use microorganisms - sometimes referred to as biocatalysts - to produce chemicals from sugars or biomass. Many hope to leverage the vast amounts of existing starch and sugarcane-based ethanol capacity to promote their commercialization, using either the tried-and-tested sugars or more exotic feedstocks such as lignocellulosic biomass.
All new fermentation bio-based chemical ventures are leveraging modern metabolic engineering techniques to increase yields, increase concentration, and in some cases produce chemicals rarely found in nature.
Another common route also begins with fermentation ethanol capacity, using bio-based feedstocks, followed by subsequent dehydration to yield bio-ethylene.
Others prefer to capitalize on the chemical industry's decades of experience in using syngas by producing it from renewable resources, again using catalytic synthesis processes familiar to the traditional chemical industry. Still others work with enzyme technology in new and innovative ways to process biomass.
This wave of innovative ventures is as massive as it is unprecedented. In a recent study, Nexant evaluated the announced capacity additions derived from renewable feedstocks.
Based on public announcements, there will be 6m tonnes/year of new bio-based chemical capacity by 2015. By comparison, Nexant estimates that global capacity for conventional "building block" chemicals is about 400m tonnes/year.
Although bio-based chemicals will thus constitute only a modest portion of this capacity in the near future, growth will nevertheless be impressive. From a low base of approximately 500,000 tonnes/year, bio-based chemicals will gain 1.5m tonnes of production each year to 2015.
Nexant's analysis shows several clear trends:
But the strength of the technology alone will not determine the success or failure of these ventures. It is unlikely that all of these projects will reach fruition.
As well as the perennial risks associated with new ventures and biotechnology, projects have to contend with the overall economic climate. Feedstock price changes may also doom infant technologies.
More than any other factor, this may alter whether or not bio-based routes to chemicals will be competitive.
Although some bio-based feedstock prices have shown increased volatility - particularly corn and sugarcane - the primary source of risk is in hydrocarbon prices.
Despite these risks, Nexant believes that nearly two-thirds of announced capacity - some 4m tonnes/year of production by 2015 - is likely to reach completion, putting the growth at 1m tonnes/year.
Bio-based chemical producers have the potential to build extensive alternative supply chains for a variety of chemicals. While risks in the sector remain high, newly commercializing players have the potential to become strong competitors.
Joshua Velson is an analyst in Nexant's Energy and Chemicals Consulting group, specializing in green materials, bioprocesses and scale-up and modeling. Velson joined Nexant in 2011.
Steven Slome is a consultant in Nexant's Energy and Chemicals Consulting group, specializing in algae fuels and chemicals, biofeedstocks, and biofuels and biochemicals. He has over 4 years at Nexant.
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