Bio-based chemicals: Bio-based economy is on the horizon

Northwest Europe is an attractive location to develop a bio-based chemicals production platform, as the Netherlands is seeking to prove

Moves to develop a bio-based chemicals industry in the Netherlands are accelerating, with industry, academe and government all putting effort behind a push to utilise the country’s diverse bio-materials base.

Agri-food and chemicals are teaming up Copyright: Rex Features

Several recent reports and studies have shown the potential in the region and indicated possible ways forward. And already leading agri-food and chemical companies and technology start-ups are active in alliances and projects.

Last September consultancy Deloitte published its thoughts in a report entitled “Opportunities for the fermentation-based chemical industry”, looking at the market potential and competitiveness in northwest Europe. It found a “surprisingly positive picture” for the region based on sugar beet as a feedstock.

Production costs for sugar from beet put the Netherlands in a strong position at the lower end of the cost curve. In fact, says Deloitte, due to high volumes last season, the Netherlands took the lead in low-cost sugar production. This it says, “is an interesting development and a trend that will continue.” Crop yield and sugar yield have both been increasing in the Netherlands in recent years.

In addition to these improvements in cost position, says Deloitte, changes in regulation in 2017 will remove restrictions from European sugar production and trade in the global market. This will boost production volumes. “Once the quota is lifted we expect production volumes in the EU to increase and prices to move nearer global market levels,” says the report.

SUGAR-BEET CHEMICALS STUDY
Since that report, AkzoNobel has joined forces with SuikerUnie, Rabobank, NOM (the Investment and Development Agency for the Northern Netherlands), Groningen Seaports and the province of Groningen, to investigate the possibility of producing chemicals from beet-derived sugar feedstock.

They have asked Deloitte to perform a feasibility study to provide an independent critical review and economic assessment of the viability of several business cases for commercial production in the Delfzijl chemical cluster in the Netherlands. The study will take around three months to complete and the partners expect to identify one or more successful business cases for commercial production in Delfzijl.

Also last year, the Dutch Ministry of Economic Affairs sponsored a study into potentially attractive bio-based product areas. The work was carried out by researchers at the University of Wageningen, the University of Groningen and NOM/Greenlincqs, under the leadership of Johan Sanders of Wageningen. An interim report issued late last year identified a number of key cluster projects, including:

• A bio-refinery based on carbohydrates such as sugar, starch and lignocellulose;
• A protein-producing cluster, using grass and agricultural crops as a feed source;
• A cluster based on the use of amino acids as a raw material to make a range of 10 selected chemicals;
• A bio-based cluster in Delfzijl, using available glycerol to make epichlorohydrin;
• A cluster for bio-based polyester packaging resins; and
• A bio-composites cluster, using bio-based resins and reinforcing fibres.

Sanders explains that all these are based on materials that are readily available in the northern part of the Netherlands or neighbouring northern Germany and that companies and technologies have already been identified for the clusters in many instances.

“The advantages of bio-based processes”, he adds, “is that they don’t use too much heat or capital and [the Netherlands] needs only raw materials and labour to compete with the fossil-based industry, even in regions with lower raw materials cost.”

PROJECTS NEED LARGE SCALE
AkzoNobel is already pursuing several bio-based projects, with the likes of Solvay, Photanol and Enerkem, and is looking to source more bio-based materials.

Peter Nieuwenhuizen, director of innovation and partnerships at AkzoNobel, says that: “Given the challenges the world is facing in terms of resource scarcity, we are actively looking for bio-based alternatives for our chemicals. We are constantly looking for less traditional solutions as we strive to do more with less.”

But he firmly believes that successful projects must be of significant scale, and not just in niche speciality areas to have a beneficial impact on the country’s chemicals base and its longer-term future. He believes building projects will be no problem “as long as there is a viable business case”.

“We need to look at beet sugar very seriously – if we can get this sufficiently cheaply we can make certain high volume chemicals.”

In the end, “the chemical industry is a volume game – if we are to add value we need to have the volume. Then we can make money.”

ICIS is holding a high-level Roundtable in association with Groningen Seaports and NOM on 27 March in Amsterdam to discuss the potential for a bio-based chemicals sector in northwest Europe. The highlights of the discussion will be reported in a forthcoming issue of ICIS Chemical Business