Special Report: Strong growth for bio-based materials

07 March 2014 10:51 Source:ICIS Chemical Business

A recent report on the market potential for bio-based materials and chemicals shows a healthy development across a number of technologies and geographic regions

The basic science of bio-based materials and chemicals (BBMC) has advanced to the point that dozens of chemicals can now be produced from multiple feedstocks, at costs that are competitive with petroleum – at least in theory – and at scale.

To prove their processes in industrial quantities and start generating larger revenues, many BBMC developers have been working towards full-scale production.

Lux Research examined 217 companies’ bio-based material and chemical production facilities (229 sites in total), that were planned, operating or shuttered between 2005 and 2017 all over the world. For each facility, the Boston-based research firm documented the actual or planned nameplate capacity for the 2005 to 2017 period.

BioAmber is producing bio-succinic acid at this plant in Pomacle, France – one of  growing number of facilities in the bio-sector

Copyright: BioAmber

From 2005 to 2013, the count of BBMC facilities worldwide grew from 24 to 193, a compound annual growth rate (CAGR) of 26%. From today through to 2017, that number will grow to 229 sites, a CAGR of 3%. In terms of capacity, the worldwide tonnage of bio-based products produced grew from 1.9m tonnes in 2005 to 6.9m tonnes in 2013 (a CAGR of 15%).

Through to 2017, the total capacity will increase to 13.2m tonnes/year, growing at 14%/year, though this number does include both chemical intermediates and final products. For example, capacities for lactic acid and polylactic acid (PLA) are both included.

After conducting an initial review, Lux Research then categorised the products – 133 chemicals and classes, like succinic acid and polyols – into seven main product categories (for example, intermediate chemicals, polymers and specialty chemicals) and 22 sub-categories (such as isoprenoids, gases and starch plastics). It also classified them by feedstocks, country and geographic region.

Production of intermediate chemicals like adipic acid and lactic acid will grow from 2.0m tonnes today to 4.9m tonnes in 2017, while growth in first-generation facilities stalls (see chart). Going forward, today’s 1.1m tonnes/year of bio-derived polymer capacity will grow by 18%/year through to 2017 as companies like Avantium build new sites; production of bio-oil and its derivatives is set to grow from 1.0m tonnes today to 1.8m tonnes in 2017.

Specialty chemicals (for example, farnesene) are set to boom, growing with a CAGR of 46% between now and 2017, while the nascent bio-based advanced material space, comprised of products like bee silk, continues to have a negligible capacity through 2017.

First-generation sugar/starch feedstocks, such as corn and sugarcane, are, and will remain, the dominant bio-based source. At the same time, new technologies will result in a sharp drop in the share of cellulosic capacity, from 67% to 27%. Bio-oil feedstocks, such as palm and canola, supply 1.1m tonne of BBMC capacity today.

Processes converting chemical inputs, such as converting succinic acid to butanediol, will see a 19% CAGR through to 2017. In addition, explosive growth is planned for gas-fed facilities, with a 117% CAGR from 2013’s 29,000 tonnes/year, though this is driven by a few long-shot companies and algae developers struggling with high production costs.

North America ranks fourth in global capacity today, but will move up to first by 2017. In parallel, North Asia rises as a competing geography, from two BBMC sites in 2005 to 37 in 2017. Europe’s share of global capacity will drop from 37% in 2005 to 14% in 2017.

Substitute products like PLA have found their market share, but growth will slow to a CAGR of only 8% through to 2017. Drop-in bio-based products will continue to hold the lion’s share of total capacity at 68% and bio-products with improved performance will grow to 19% of the total capacity by 2017.

Specialty chemicals are enabling new bio-based markets in the nearer term, as companies such as Solazyme and Segetis bring products to market, and, long term, bio-based advanced materials is an emerging sector, with products like spider silk and 
nanocrystalline cellulose.

First-generation sugars are good feedstock targets and will lead capacity growth, at least until someone solves the cellulosic problem. However, cellulosic waste, such as corn stover, is still gaining and set to increase to 9% of the total feedstock usage and 32% of all cellulosics. A growing focus on nonsugar and noncellulosic feedstocks, such as waste gas, results in increased feedstock diversity.

North America’s 3.6m tonne/year product portfolio is the most diverse, as US start-ups such as Gevo build initial plants close to home. North Asia’s capacity is 71% intermediate chemicals, as producers look to build close to plastic demand. Also, ASEAN has the largest regional share of bio-oils and derivatives, though first-generation dominates with 42% of 2017 capacity, and first-generation bio-based materials and chemicals makes up 53% of Europe’s 1.8m tonnes/year capacity in 2017.

A few unlikely gas converters plan for North American scale-up, while a handful of developers like Elevance and Butamax, retrofit biofuel facilities. North Asia’s bio-products are dominated by nonfood feedstocks, while 47% of ASEAN’s BBMC capacity will come from bio-oils and starch. Though cellulosic feedstocks dominate Europe today, sugar will supply 742,000 tonnes/year of capacity in 2017.

Lux Research provides strategic advice and ongoing intelligence for emerging technologies. Through its primary research and 
extensive global network, it delivers insight, connections and competitive advantage to clients. Visit www.luxresearchinc.com for more information

By Julia Allen