Second Generation Feedstocks – some comparative … · USDA biomass supply forecast illustrates the US’s ... Global cellulosic ethanol capacity is projected to ... the cellulosic

©LMC International, 2014 119/05/2014

Presentation to BIO World Congress 2014by Dr Sarah HickingbottomLMC International Philadelphia, 13th May 2014

Second Generation Feedstocks –some comparative considerations


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A brief bio-based chemical overview


A myriad of bio-based chemicals can be derived from carbohydrate or cellulosic feedstocks via C5/C6 sugar intermediates

Carbohydrates

C3

C4EthanolC2

C6 C5

Xylitol

Isoprene

Glycerine

Furfural

Itaconic acid

Lactic acid

SA

Adipic acid

PDO

Sorbitol

3-HP

2,5-FCDA

PBS

PG

Nylon 6,6

PE

Acrylic acid ECH

PLA

GBL

PP

THF

Ethylene

1,4-BDO

Isosorbide Polyitaconic acid

Polyisoprene

iso-Butene

PEF

iso-Butanol

Polyisobutene

THF

EPDM

PVC

PHA

MA

MEG

PTAPET

Butadiene

n-Butanol

Levulinic acid


Succinic acid (SA) exemplifies new opportunities: high petro-costs limit market size, but, at scale, the bio-based SA demand could reach several million tonnes if the bio-derived molecule has a lower price point

HOO

OOH

Succinic acid

O

THF

NH

O

2-Pyrrolidone

N

O

N-Methyl-2-pyrrolidone

CH3

NCCN

Succinonitrile

H2NNH2

1,2-Diaminobutane

H2NNH2

SuccindiamideO

O

HOOH

1,4-Butanediol

O

O

-Butyrolactone

H3COOCH3

Dibasic esterO

O


Selected players operating/building commercial scale bio-based chemical plants, their primary target molecules, feedstocks & capacities

Bio-based chemical Company Feedstock Capacity (tonnes)

Lactic acid, derivatives & PLA

B&G, Galactic, NatureWorks, Purac, Synbra

Corn, sugar, molasses 570,000

Ethylene / polyethylene Braskem, Dow & Mitsui Sugarcane ethanol 550,000Epichlorohydrin Wilmar -Yihai Kerry Group, Jiangsu

Yangnong, Solvay, VinythaiGlycerine 390,000

Methanol BioMCN Glycerine 200,000

Propylene glycol Oleon/BASF, ADM Glycerine, sorbitol 120,0001,3-Propanediol DuPont Tate & Lyle, Metabolic Explorer,

Zhangjianang Glory Biomaterial Corn glucose, glycerine 92,400

Succinic acid BioAmber, Myriant, Reverdia, Succinity Carbohydrate 68,360 Isobutanol Gevo Corn 55,000Farnesene Amyris Sugarcane 40,000Fatty acids, fatty alcohols, FAME & chemicals

REG Life Sciences (LS9) Corn, sugarcane, glycerine 34,000

Butanol Butamax Advanced Biofuels Corn, sugarcane 30,000


Once the bio-based sector establishes itself, economics will govern which products are successful & which fail – feedstocks especially

• Feedstock requirements will prove key to long term profitability:

Choice of feedstock (or, indeed, feedstock flexibility)

Choice of feedstock entry point along its value chain

Choice of feedstock sourcing strategies, e.g. farmer vs. trader or origin vs. destination


Summary of logistics governing 1st & 2nd gen. feedstocks & ‘where’ in value chain is the ‘most attractive’ to enter from a chemical player POV

Are there raw material logistical constraints?

Is a co-product off-take market needed or not?

Which is the 'most attractive feedstock' in

the value chain?

Is this 'most attractive feedstock' preferable

at origin or destination?

Sugarcane Perishable — process at origin No Molasses & raw sugar Origin

Sugar beet Perishable — process at origin No Molasses Origin

Corn None Yes Native starch & glucose syrups

Glucose at processing origin; native starch

is either

Wheat None Yes Native starch & glucose syrups


is either

Barley None Yes Native starch & glucose syrups


is either

Cassava Perishable: – process at origin No Native starch &

glucose syrups Glucose at origin;

native starch is either

Biomass — woody None (once pelletised) No C5/C6 sugars & ethanol

Sugars at processing origin; ethanol is either

Biomass — residues Low density, high bulk: – process at origin No C5/C6 sugars &

ethanol Sugars at processing

origin; ethanol is eitherOilseeds None Yes Vegetable oil Either

Palm FFB Perishable: – process at origin No Vegetable oil Either

Glycerine None (though crude contains ~ 20% water) No Glycerine Either


So, why switch to second generation? Drivers include: land use; food vs. non-food; feedstock diversification; “green” issues; consumer wants; biofuel experiences; & government policies

-40

-20

0

20

40

60

80

100

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Mill

ion

hect

ares


Woody biomass: supply & source


USDA biomass supply forecast illustrates the US’s biofuel & bio-based chemical biomass potential– base case & high yield scenarios out to 2030

0

200

400

600

800

1,000

1,200

1,400

2012 2017 2022 2030

Mill

ion

dry

tonn

es

Energy CropsForest resources currently usedCorn Stover

363

205

127

0

200

400

600

800

1,000

1,200

1,400

2012 2017 2022 2030

Mill

ion

dry

tonn

es

Other agricultural biomassAg resources currently usedForest biomass potential

607

205

245

Base case High yield case


There are a number of cost components to consider, e.g. the delivered cost of clean chips comprises stumpage (the fee paid to the forest owner), harvesting, transport, chipping & bark loss

Stumpage

HarvestingTransport

Chipping Cost

Bark Loss


Agricultural residues: supply & source


By 2030, under the high yield scenario, US corn stover supply could reach as high as 245 million dry tonnes– a strong potential feedstock supply

0%

5%

10%

15%

20%

25%

30%

35%

0

200

400

600

800

1,000

1,200

1,400

2012 2017 2022 2030

Corn stover share of biomass

Mill

ion

dry

tonn

es

Forest biomass potential Ag resources currently usedOther agricultural biomass Corn StoverForest resources currently used Energy CropsCorn stover share


Potential biomass supply from crop residues in 2011 & 2020 (million tonnes dry matter)

0

50

100

150

200

250

300

350

US EU Canada SouthAmerica

Indonesia Malaysia West Africa

Mill

ion

tonn

es d

ry m

atte

r

2011 2020


Bagasse’s use in electricity generation (either for internal use or to supply the grid) will underpin price points & supply volumes mills are willing to offer potential cellulosic sugar producers

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 2013

US$/

MW

h

Spot Electricity Price Biomass Electricity Auction Price


Cellulosic ethanol: driving second generation progress


Global cellulosic ethanol capacity is projected to expand to 1.6 billion litres by 2016 – with North America accounting for ~60% of this growth

2012 2013 2014 2015 2016

billi

on lit

res o

f cel

lulo

sic e

than

ol

Asia Europe North America Oceania South America


Cellulosic ethanol production costs, for a US stand-alone hydrolysis plant, are projected to fall by ~30% between 2012-2025 – largely based on cheaper enzymes

Note: Based on a fixed price for delivered biomass of $65 per bone dry tonne

2012 2025

US$

real

201

3/lit

re e

than

ol

Biomass Enzymes Other Cash Costs Depreciation


Cellulosic ethanol demand will be driven initially by policy – this will limit market demand unless discretionary blending proves profitable

• US demand is driven by the Renewable Fuels Standard (RFS2). However, a shortage of cellulosic ethanol resulted in cuts to their mandate & it may need cutting again

– Once mandates are cut, a political question is created over their re-introduction

• Stagnating gasoline consumption in the US has created a ceiling for E10 volumes – compounded by the failure of E-15

• The proposed EU cap on food-based biofuels funnels the market towards second generation biofuels, however this cap has not been made official & the proposal has no specific cellulosic requirement


Implications for the bio-based chemical sector as the cellulosic ethanol industry commercialises:

• Initial capacity is based primarily on hydrolysis – potentially creating cellulosic sugar volumes which can be diverted towards chemicals, players may find this attractive given:

– Cellulosic ethanol requires a subsidy to compete against gasoline, hence its future is insecure as political support weakens in the US & EU – in contrast with chemicals

– Bio-based chemicals should add value as compared to fuel

• Globally, current data suggests the most promising feedstocks are US corn stover & Brazilian bagasse


Cellulosic sugars: supply chain & cost profile comparison


Comparing 1st & 2nd generation fermentable sugar production cost profiles reveals differences, e.g. lignin affords energy self-sufficiency to 2nd gen.

Net Raw Material

67%

Capital14%

Labour6%

Energy8%

Other5%

Raw Material

Cost34%

Capital33%

Labour10%

Enzymes23%

Starch glucose production cost profile (corn wet milling)

C5/C6 biomass sugars production cost profile (corn stover - enzyme hydrolysis)


Vertical integration in the cellulosic sugar supply chain offers advantages – especially while the merchant market develops – partnerships & joint ventures are alternative options

Biomass

C5/C6 sugars

Bio‐based products

End users

Biomass

C5/C6 sugars


End users

Biomass

End users

C5/C6 sugars


Biomass

End users

C5/C6 sugars



Companies active in the development of second generation cellulosic sugars include:

SucreSource


Thank you for your kind attention

[email protected] www.lmc.co.uk


2nd Generation Bio-based Feedstocks – how viable are they?

Oleochemical Report 2014

Ethanol Market Report

Feedstocks for Bio-based Chemicals – which will be competitive?

Global Crop Outlook 2014

Global Markets for Starch Products

Carbohydrate Outlook: Prices & Processing Costs

Global Sugar Outlook

Oil Palm Report: Indonesia & Malaysia 2014

Oilseeds & Oils Report 2014

Investment Opportunities in South East Asian Agriculture

LMC carries out bespoke consulting projects for bio-based chemical, fuel & material players as well as producing ‘off-the-shelf’ reports, including:


This presentation and its contents are to be held confidential by the client, and are not to be disclosed, in whole or in part, in any manner, to a third party without the prior written consent of LMC International.

While LMC has endeavoured to ensure the accuracy of the data, estimates and forecasts contained in this presentation, any decisions based on them (including those involving investment and planning) are at the client’s own risk.

LMC International can accept no liability regarding information analysis and forecasts contained in this presentation.

© LMC International, 2014All rights reserved

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Documents

Second Generation Feedstocks – some comparative … · USDA biomass supply forecast illustrates the US’s ... Global cellulosic ethanol capacity is projected to ... the cellulosic