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This presentation, developed as part of the Interreg NWE Bio Base NWE project, was presented at the UK Institute of Food Research Annual Food and Health Symposium. It provides an overview of developments in the biobased chemicals market and how the UK in developing an ecosystem for the development of Industrial Biotechnology including the potential for knowledge exchange in North West Europe.
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Biobased chemicals, Industrial Sugar and
development of Biorefineries
Adrian Higson
Food and Health ISP Annual Symposium
4th March 2014
Copyright © NNFCC 2014.
A specialist ‘not for profit’ Bioeconomy consultancy
Celebrating 10 years of Bioeconomy development
Company Vision
We view biobased technologies as key components of the low carbon economy delivering economic,
social and environmental benefits.
We believe the bioeconomy will create sustainable business opportunities for feedstock suppliers,
technology and project developers, manufacturers and investors.
Copyright © NNFCC 2014.
Company Mission
To provide clients with a holistic view of feedstock, technology, policy and
market development across the bioeconomy, enabling them to make
informed business decisions and develop sustainable business
strategies. Mar
ket
Dyn
amic
s
Political
Economic
Social
Technological
Legal
Environmental
Copyright © NNFCC 2014.
Clients & Partners
• Multinationals & SMEs
• Public Organisations
• Government
• Research Institutes
• Universities
• R&D Collaborations
• Research Councils & TSB
• EU Projects
Members of
Copyright © NNFCC 2014.
Bioeconomy
Biotech Biogenic Resource
The production of renewable biological resources and their conversion into food, feed, bio-based products and bioenergy
Bioeconomy
Copyright © NNFCC 2014.
A mechanism to drive sustainable development covering Environmental, Economic and Social policy. Today’s bioeconomy in Europe • is worth an estimated €2 trillion • accounts for 22 million jobs • 9% of total employment in the EU Each euro invested in EU-funded bioeconomy research and innovation is estimated to trigger €10 of value added in bioeconomy sectors by 2025.
EUROPEAN BIOECONOMY
Innovating for Sustainable Growth A Bioeconomy for Europe
February 2012
Copyright © NNFCC 2014.
Bioeconomy Value Chains
Copyright © NNFCC 2014.
Bio-based Industries Public Private
Partnership
The EU contributes €1
billion to the research
and innovation
program, European
industries have
committed to another
€2.8 billion
http://bridge2020.eu/
Horizon 2020 bioeconomy funding ~€4bn (double the funding available through PF7)
Copyright © NNFCC 2014.
Commodities, specialties & pharmaceuticals
Pharmaceuticals Food Ingredients Cosmetics Flavours & Fragrances Home & Personal Care Polymer Additives Solvents Lubricants
Examples
Copyright © NNFCC 2014.
Bio Chemicals and Bio-Based Polymers (supplying food, feed and chemical using industries)
Global market size
~ 50 million tones
1%
7% 1%
20%
54%
5%
7% 4%
1%
17%
Chemical Derivatives Naval StoresNatural Products OleochemicalsBiopolymers Amino AcidsAlcohols Aliphatic acidsOther
Fermentation Products
Copyright © NNFCC 2014.
EU Industrial Policy: A Stronger European Industry for Growth and Economic Recovery October 2012
Europe needs to reverse the declining role of industry in Europe. A vision focused on investment and on innovation. The priority areas are markets where new technologies are ready to deliver new products or increase productivity. The volume growth of EU bio-based chemical products* up to 2020, is estimated at 5.3% p.a. Resulting in a market worth € 40 billion and providing over 90,000 jobs within the biochemical industry alone. * Including bio-plastics, bio-lubricants, bio-solvents, bio-surfactants and chemical feedstock
Copyright © NNFCC 2014.
Over 50 commodity or platform chemicals in development or
commercialisation.
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Strong growth in biobased plastic capacity
The LEGO® Movie
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Biobased Products - Market drivers and Challenges
• In use functionality
• End of life options Product performance
• Feedstock cost
• Process (operational) cost
• Capital cost Cost of production
• Product differentiation
• Green Premium Value Proposition
Market
Copyright © NNFCC 2014.
Feedstock Pricing – A new normal
Source: International Monetary Fund
Price
ind
ex, 2
00
5 =
10
0
0.00
50.00
100.00
150.00
200.00
250.00
300.00
Agricultural Raw
Materials
Food
Crude Oil
(Petroleum)
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Succinic Acid 1,4-ButanediolPolybutylene
Terephthalate
Copolyester Ethers
Thermoplastic Polyurethanes
Spandex Fibres
Tetrahydrofuran
Solvent
Polytetramethylene Ether Glycol
g-Butyrolactone
Fine & Speciality Chemicals
N-Methyl -2-Pyrrolidone
Fine & Speciality Chemicals
2-Pyrrolidone
Fine & Speciality Chemicals
N-Vinyl-2-Pyrrolidone
Polyvinyl Pyrrolidone
Deicers/Coolent
Plasticisers
Fuel Additives
Succinic acid value chain
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Ethylene Polyethylenes
Styrene Monomer
Ethylene Oxide/Glycol
EDC
Other
Polymers/Rubbers
Polyester
PVC
Alpha Olefins
PVA
Ethanol
60%
7%
14%
12%
7%
Ethylene value chain
Image courtesy of Braskem
Copyright © NNFCC 2014.
50 shades of green - Every generation now comes with a degree
of environmental consciousness
• Baby boomers (born 1946-1964)
– Silent Spring 1962
– Air quality, water quality
• Generation X (Baby busters) (born 1964-1977)
– Union Carbide and Chernobyl disasters.
– Exxon Valdez oil spill.
• Generation Y (Millennials) (born 1980’s through1990’s)
– BP Oil Spill in the Gulf of Mexico
– An Inconvenient Truth and Hurricane Katrina
• Generation Z (today’s children)
– Recycling, solar panels, hybrid cars, energy saving light bulbs
Source: Jacquelyn Ottman: The
new rules of Green Marketing
Copyright © NNFCC 2014.
Business to Business
Business to Consumer
Green Premium? – Price vs value
Coca Cola Executive: “If Coca-Cola were to lose all of its
production-related assets in a disaster, the company would
survive. By contrast, if all consumers were to have a sudden
lapse of memory and forget everything related to Coca-Cola,
the company would go out of business.”
Copyright © NNFCC 2014.
PET
Bottles
Fibre
Film
18 million tonnes
42 million tonnes
5 million tonnes
Polyethylene Terephthalate
Copyright © NNFCC 2014.
PET - the other half?
• Accessible via isobutanol (Gevo or Butamax) or dimethyl furan (UOP)
• Alternative routes through biomass fast pyrolysis (Anellotech) or catalytic reforming (Virent) and via muconic acid (Amyris, Genomatica)
• Avantium developing PEF polymers
OH
O
O
Copyright © NNFCC 2014.
Bio-based materials – Novel or drop in?
Strengths • Drop in – known targets and downstream products
• Novel – exploits attributes of biomass or biological processing
Weaknesses • Drop in – number of unit operations required
• Novel – requirement for product development
Opportunities • Drop in - rapid route to market through existing
infrastructure and know how
• Novel – provides new or improved functionality
Threats
• Drop in – production never achieves cost competitiveness
• Novel – immature supply chain and market awareness
© NNFCC
Copyright © NNFCC 2014.
Biobased plastics face technical hurdles
“Snack Attack: Chip Eaters Make Noise About a Crunchy Bag.” The Wall Street Journal Aug. 18, 2010. Marketing slogan "Yes, the bag is loud, that's what change sounds like."
Lego investigating biobased plastic but it must meet stringent quality requirements.
The LEGO® Movie
Copyright © NNFCC 2014.
CO2 capture and use
By-products, residues &
wastes
Biomass Crops & Forestry
Food crops
Land use and food vs fuel concerns must be considered. However the biobased products are differentiated from biofuels & bioenergy. e.g. scale, alternatives
WWF Biobased Panda
Feedstock choice & Value Chain Acceptance
Hierarchy of brand owner preferences
Copyright © NNFCC 2014.
Bioplastic Land Use Scenarios (2030)
0
10
20
30
40
50
% o
f av
aila
ble
lan
d
Chemical driven
Biofuel stalled
Biofuel driven
Bioeconomy
Polymer demand – 428 million tonnes
Land availability – 250-800 million ha (Source FAO)
Copyright © NNFCC 2014.
Ensuring sustainable development
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Cellulosic ethanol – First steps in industrial sugar fermentation
POET-DSM Advanced Biofuels’ first commercial cellulosic
bio-ethanol plant is on schedule to start up June 2014.
Initial capacity 20 million gallons (~60,000 tonne per year)
Beta Renewables Crescentino plant commercial-scale
cellulosic ethanol plant, in Crescentino Italy, started
operations in Q4, 2012. Capacity 40,000 tons of per year
DuPont's commercial-scale cellulosic ethanol facility in
Nevada, Iowa. Once fully operational, the facility will
produce 30 million gallons (~90,000 tonne per year)
Copyright © NNFCC 2014.
Industrial Sugar – Next Steps
M&G Chemicals launches green revolution in the polyester chain Shanghai – 18 November 2013 M&G Chemicals announces today its decision to construct a second-generation bio-refinery in the region of Fuyang, Anhui Province of China for the conversion of one million metric tons of biomass into bio-ethanol and bio-glycols.
Increasing number of Industrial sugar platforms ready for commercialisation
Copyright © NNFCC 2014.
Source IEA Bioenergy Task 42, NNFCC
Biorefineries
The opportunity to develop integrated chemical complexes
Copyright © NNFCC 2014.
Building a UK ecosystem in Industrial biotechnology
Industrial Biotechnology Leadership Forum UK Plc becomes a leading centre of competence in fine and specialty chemicals Increased uptake of biocatalysis and fermentation in the existing UK chemical industry UK becomes a top three producers of high value chemicals in plants UK becomes a leading centre of know-how in producing commodity and intermediate chemicals through biocatalysis and fermentation Source: AD Little Roadmap
Copyright © NNFCC 2014.
UK economic growth based
on key Industrial Innovation
Eight Great Technologies
Bioeconomy Innovation
• Agri-Science
• Synthetic Biology
• Advanced Materials
Copyright © NNFCC 2014.
A global leader in Synthetic Biology
Synthetic Biology Leadership Council Over £60 million for synthetic biology
• £1 million synthetic yeast genome. • £10 million for multi-partner Innovation
and Knowledge Centre (IKC). • £20 million for multidisciplinary research
centres. • £10 million for a synthetic biology seed
fund. • £18 million for DNA synthesis. • £2 million to support training
Copyright © NNFCC 2014.
Structural Biol and Biocat.
Biocatalyst Discovery
Biopharma
Bioprocessing
Plant Metabolites
Natural Products Novel Chassis
Gas Fermentation Microalgae Microbial
Metabolites
Membrane Transport
Metals in Biology
Cross Cutting
Glycoscience
BBSRC IB & Bioenergy Networks
Biorefining
Integrated Technologies
Systems and Synthetic Biology
Anaerobic Digestion Agri-Food Chain
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Multi-funder collaboration
providing £45million in
2014/15
Translation of research on
biological processes into
industrial processes.
Enable the manufacturing of
new products or improve
manufacturing of existing products.
http://www.bbsrc.ac.uk/business/collaborative-research/tsb-competitions/ib-
catalyst.aspx
Copyright © NNFCC 2014.
• Early stage: Translation - Academic-led experimental work that builds on existing
discoveries.
• Early stage: Feasibility studies – Academic or business led projects to explore the commercial potential of an early-stage scientific idea through feasibility studies.
• Industrial Research – Business led projects building on recent discoveries to develop new technologies or processes.
• Late stage: Pre-experimental feasibility studies – Business led projects to test proven processes at a greater scale of operation or with commercially equivalent equipment for the first time.
• Late stage: Experimental development – Business led projects to demonstrate that performance seen previously is repeatable during extended testing at a commercial scale.
5 Funding streams
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Process demonstration and scale up
Copyright © NNFCC 2014.
Copyright © NNFCC 2014.
Copyright © NNFCC 2014.
Bio Base NWE is a three-year project (2013-2015) by the European Commission to support the development of the bio-based economy in North West Europe (NWE ).
The €6.2 million project will help entrepreneurs and companies to facilitate innovation and business development in bio-based technologies.
Copyright © NNFCC 2014.
1. A network, linking bio-based economy experts, advising on how to develop new ideas into marketable products, from the first feasibility study or market analysis up to funding and investment scenario’s.
2. Innovation coupons for SME’s to perform proof-of concept studies and/or to demonstrate innovative bio-based technologies at Bio Base Europe Pilot Plant, an independent, state of the-art demonstration facility in Ghent, Belgium (technology feasibility, cost-assessment or barrier analysis).
3. Programs and tools for training and education to help tackle the shortage of skilled professionals in North West Europe’s bio-based industries.
Scope
Copyright © NNFCC 2014.
Bio economy
Feedstock pricing & volatility
Technology
Development
(performance & cost)
Environmental considerations
The bioeconomy will create sustainable business opportunities for feedstock suppliers, technology and project developers, manufacturers and investors. The UK has the research base to capitalise on these opportunities. Support (funding & facilities) for technology development is in place. The UK needs to demonstrate innovation capacity through technology commercialisation.
Summary
Copyright © NNFCC 2014.
More information
• IB Catalyst • Bio Base NWE
• NNFCC services
Email: [email protected]
@biobasedchem
Celebrating 10 years of Bioeconomy
development
NNFCC is a UK based consultancy with
expertise on the conversion of biomass
to bioenergy, biofuels and biobased
products.
We help industry solve complex
business challenges and provide vital
evidence for policy makers.
| | www.nnfcc.com | [email protected]