Market outlook: No longer just a concept

27 June 2014 09:43 Source:ICIS Chemical Business

As more bio-based feedstocks, processes and products are commercialised, ICIS surveys its readers to assess the state of play on sustainability in the chemical industry

Chemical producers and distributors can no longer ignore the concept and practice of sustainability. Customers are increasingly looking for sustainable feedstocks and products and to diversify away from fossil-based production.

Fortunately, the past five years have seen technologies develop to the point that there is now commercial availability of renewable, bio-based feedstocks and processes. Growing numbers of sustainable products are being manufactured at commercial scale and some major firms, such as BASF and Invista, are already marketing these based on their differentiation from petroleum-based production.

“We are seeing an increasing degree of commercial readiness for alternative feedstocks and bio-based materials,” says Christophe Schilling, CEO of US biotechnology process developer Genomatica. “There are big differences to where we were just a few years ago”, he adds. “There has been growing demand for sustainable products for downstream markets and a steady maturing of technologies. There is a good pipeline being developed by industry.”

Changes in companies’ attitudes to sustainability and progress towards engaging in sustainable policies and practices have been charted in two reader surveys conducted by ICIS in association with Genomatica, in 2009 and 2012. Over the next few weeks, ICIS will again be surveying its readership to gauge the pace and scope of developments since the last survey (see box for details).

The 2012 survey showed a distinct optimism amongst responding companies that the degree of commercial readiness was improving. As Schilling noted at the time: “The survey points to a striking result: the time for renewables is now. It’s a clear mandate for action… It shows that sustainability – and the use of renewables-based chemicals – is part of the mainstream of thinking and action for both chemical producers and chemical users.”

The focus of the 2014 survey will be to see how far the appreciation and uptake of sustainability has developed over the intervening 18 months, and to gauge how recent developments might have impacted company thinking on the use of renewable feedstocks and products.

Potentially the most disruptive development has been the US chemical industry’s extensive reinvestment in conventional fossil technologies because of shale gas feedstocks, notably methane, ethane and propane.

How this is impacting the uptake of renewables will be interesting to assess. But it will be surprising if there has been any slowdown in the drive to sustainability. As Schilling notes, “the movement is being driven along the entire supply chain, with pull from end consumer applications as well as all the way back to producers.”

Schilling points, for example, at butanediol, which goes into a broad range of products and where in certain segments there is a strong downstream emphasis on sustainability. This is leading some to adopt bio-based routes alongside conventional technologies, so they can offer both BDO and bio-based BDO into the market, to meet customer demands most appropriately. “If a bio-based route is cost-competitive it opens up scope for broad application, but if it is not, then it will be limited very much to niche plays,” explains Schilling.

Cost-competitiveness is just one of several issues that arise when companies are considering renewable feedstocks. Availability and price stability of alternative raw materials is another concern, and the ability to introduce greener products seamlessly into existing production processes is another, central issue.

Again, it will be interesting to see how attitudes have evolved over the past five years. In Schilling’s estimate, feedstocks today are abundant and there is a great opportunity to bring agricultural industry and the chemical industry together in co-ventures for feedstocks. There is also a big opportunity to create a much deeper understanding in the industry of how to leverage new technologies and feedstocks.

“Producers will increasingly have the opportunity to ‘disconnect’ part of their chemical production from fossil fuel availability and price fluctuations”, he says. “In many cases, producers will gain greater comfort with renewable feedstocks through partnerships with well-established agricultural firms.

The ICIS/Genomatica survey in 2009 was carried out against a backdrop of the promise and potential for renewable and sustainable technologies; the second in 2012 revealed early traction and optimism for more. What will this year’s survey show, now technologies are commercial and not just hypothetical?

The survey will benefit from your participation
The 2014 ICIS/Genomatica survey will address a number of key points, including whether companies have developed sustainability strategies and how they view sustainability as a corporate goal.

It will also probe what steps they are taking to incorporate green chemistry into their product development, formulation and production, and which areas are their top priorities.

The results will feature in a future issue of ICIS Chemical Business, with aggregated data analysed in detail.

The quality of the findings depends very much on readers of this magazine taking part, to give a good cross-section of opinion. So, 
it’s really up to you – please do take a few minutes to answer the online questionnaire. You can find it at:

By John Baker