Green Chemicals 2011 outlook

After the dark economic events of 2009, 2010 is a brighter year for renewable chemical/industrial biotechnology/green chemistry companies as far as project milestones, investment activities and company exposures are concerned.

More traditional chemical [and petroleum] companies are jumping into the concept of using renewable-based feedstock as alternative to petroleum, as well as expanding investments in chemicals/materials that are used in clean technology platforms such as solar, wind, electric vehicles and biofuels.

My database of start-up companies in the field of renewable-based/industrial biotechnology field have greatly expanded and the green blog is now having a hard time keeping tabs. My focus is still within the US but activities have increasingly spread worldwide especially from Brazil and Asia. There were also news coming from Western Europe but interestingly enough, Brazil and Asia seemed to be more active in the second half of 2010. Several US companies are definitely smacked on the scene on a lot of these increased global activities.

Highlighted bio-based chemicals in 2010 are succinic acid, butanol, acrylic acid, butanediols, propanediols, biodegradable/compostable polymers (e.g. PLA, PHA, starch-based, sugar-based), lactic acid, glycerine, adipic acid, ethanol, glucaric acid, itaconic acid, levulinic, acetyls, furanics…did I miss anything else?

Another strong topics for 2010 are government mandates, chemical restrictions (debated, planned and incoming), subsidies, grants and as always, the need for common definition/labeling on what is green, sustainable, renewable, bio-, and “clean”. There are also talks throughout the year on which should be best pursued by start-up renewable chemical companies: drop-in or novel chemicals? I also noticed an increased differentiation between using biotechnology versus thermochemical vs bio/thermo hybrid processing.

I am currently working on an 2010 overview/2011 outlook article on the renewable chemicals market for ICIS Chemical Business and according to several industry players, the funding landscape for 2010 especially during the second half of the year definitely improved. The hard part now (for some companies anyway) is to prove to these investors that they can go beyond pilot phase, be able to form ventures/partnerships with existing well know companies (either in the chemical/feedstock/consumer areas), and start producing in commercial quantities.

Legislation, government grants, partnerships and the volatility of crude oil will be closely monitored this year. With the prediction of oil price going above $100/bbl, that will encourage more investors (and customers) to eye the green chemicals field. One industry player noted the growing understanding of investors about the field of renewable/green chemistry, which makes them more open and amenable into financing in renewable chemical companies.

Speaking of investing, 2010 saw the entrance of IPOs in this sector, and the prophesy is to expect more companies filing this year. Solazyme is already being talked about as a future candidate.

As I’ve mentioned, legislation is an important driver in further R&D and investing for renewable chemical companies. Certain legislations around the world are already making a impact on the quest to find alternatives especially chemicals that are being smeared thoroughly in the media such as bisphenol-A and phthalates. California’s Green Chemistry legislation, Europe’s REACH and Renewable Energy Directives (RED), the US EPA’s GHG mandates as well as the overahaul of US TSCA (Toxic Chemicals Safety Act) are just some of the big regulatory topics that will be continuously covered this year. Of course, issues on BPA and phthalates will not yet fade away anytime soon.

2011 seems to be a good, exciting year again for green/renewable/sustainable chemistry. As noted on previous annual outlook posts, these are just my amateurish insights and not to be taken (too) seriously. Believe at your own risks – that’s my disclaimer for the year ;-)

As closing remarks, here are some of the recent outlooks from various professionals that you might want to take a look into. You might also want to check ICB’s Outlook 2011 feature stories this week.

Chemical industry predictions for 2011

Planning for Uncertainty (Chemicals & The Economy)

Overconfidence The Biggest Risk For 2011 (Asian Chemical Connections)

Cleantech predictions in 2011

Neil A Burns LLC Review and Outlook 2011

2011 Outlook for Clean Energy Jobs in the U.S. – Beating the Trend | The McBreen Group

[Photo from the McBreen Group]

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