Global trends in the bioeconomy


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This presentation was delivered on the 21st March 2013 at SINTEF in Trondheim, Norway. It looks at the developing bioeconomy with a focus on the biobased chemical and polymers market.

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Global trends in the bioeconomy

  1. 1. NNFCC Global Trends in the Bioeconomy: An introduction to the Interreg Bio Base NWE Project Dr Adrian Higson Trondheim, Norway 21st March 2013NNFCC: The Bioeconomy Consultants
  2. 2. NNFCCThe Bioeconomy The aggregate set of economic operations in a society that use the latent value incumbent in biological products and processes to capture new growth and welfare benefits for citizens and nations. (OECD) Biological tools Biomass Biotechnology Bio-basedNNFCC: The Bioeconomy Consultants
  3. 3. NNFCCBioeconomy value chains Food & Feed industry Food Food Retailers ingredients industry Biomass Biomass Biomass Fuel Fuel blend & provision trading refining production retail Chemical Chemical Chemical using Retailers production industry industry Pharmaceutical industry Feed Feed ingredients industry Biomass power &NNFCC: The Bioeconomy Consultants
  4. 4. NNFCC A specialist ‘not for profit’ Bioeconomy consultancyCompany VisionWe view bio-based technologies as keycomponents of the low carbon economydelivering economic, social and environmentalbenefits.We believe the bioeconomy will createsustainable business opportunities forfeedstock suppliers, technology and projectdevelopers, manufacturers and investors.Company MissionTo provide clients with a holistic view of feedstock, technology, policy and marketdevelopment across the bioeconomy, enabling them to make informed businessdecisions and develop sustainable business strategies.NNFCC: The Bioeconomy Consultants
  5. 5. NNFCC 10 years supporting Bioeconomy developmentServices Clients & Partners• Future market analysis • Multinationals & SMEs• Feedstock logistics planning • Public Organisations• Sustainability strategy development • Government• Technology evaluation and due • Research Institutes diligence • Universities• Project feasibility assessment • Transnational Collaborations• Policy and regulatory support • European Framework• Network & Facilitation ProjectsNNFCC: The Bioeconomy Consultants
  6. 6. NNFCC EUROPEAN COMMISSION – PRESS RELEASE Brussels, 13 February 2012 Commission proposes strategy for sustainable bioeconomy in Europe EU Context It includes agriculture, forestry, fisheries, food and pulp and paper production, as well as parts of chemical, biotechnological and energy industries. • 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.NNFCC: The Bioeconomy Consultants
  7. 7. NNFCCFeedstock Pricing – A new normal The relative costs of crude oil, food basics and agricultural materials have moved significantly over the last 20 years. 300Price index, 2005 = 100 250 200 Commodity Agricultural Raw Materials Index - Monthly Price 150 Commodity Food Price Index - Monthly Price 100 Crude Oil (petroleum), Price index - Monthly Price 50 0 Apr-97 Dec-98 Apr-02 Dec-03 Apr-07 Apr-12 Dec-93 Dec-08 Oct-94 Aug-95 Oct-99 Aug-00 Oct-04 Aug-05 Oct-09 Aug-10 Jun-96 Jun-01 Jun-06 Jun-11 Feb-93 Feb-98 Feb-03 Feb-08 Feb-13NNFCC: The Bioeconomy Consultants Source: International Monetary Fund
  8. 8. NNFCC Complexity and Opportunity Functional Materials Content Chemicals Increasing value Biomass Carbon Content Liquid & Gaseous Decreasing volume Fuels Energy Content Heat & PowerNNFCC: The Bioeconomy Consultants © NNFCC
  9. 9. NNFCC Biomass – A love hate relationship! • Available on demand Strengths • Carbon source • Cost Weaknesses • Physical nature & low energy density • Energy generation (heat and power) Opportunities • Liquid transport fuels • Chemicals and materials • Competition for land Threats • Environmental pressureNNFCC: The Bioeconomy Consultants © NNFCC
  10. 10. NNFCC A higher value commodity market for biomass? 1967 – There’s a great future in plastics 2012 - There’s a great future in bio- based plastics The Graduate (1967), Plastics production: projected growth 2000 1600 Plastic production: medium growth Million tonnes 1200 Medium 2020 339 million tonnes Low 2030 434 million tonnes 800 High 2050 712 million tonnes 400 0 2010 2020 2030 2040 2050© NNFCC The Bioeconomy Consultants NNFCC: © NNFCC
  11. 11. NNFCCMarket expansion and development activity Currently over 80 companies actively commercialising over 50 commodity or platform chemicals Gr ee Ca Re nc Gl th ol ve yc ay Co Ta rd Go Ea M os Gl In lb ia iw Companies working on bio-based chemicals od et stm ob Am ol Bi du ( Gl an Gr DS ab tT ye ot al st ob an yr In ee ol Co Na M ec ar ec ria Bi Ge is/ di al ic nB Ch An /R /G hn rp oe hn tu lB Ve Bi Bi aG M Re no Bi Ex Bu No Ze Br Vi oq or em el en Bi M OP ol ne re io oA oc ol io rd Du oc ich m nn Dr pl So lyc ny ac as ta lo oM og at ve lo yr Vi wo ue og te Pu en al rg X e m DO ica Ge or he at AD TM Po he eli te DS ov at ke m gic io re lva th ian zy ie do ol ch ph ie t te Bi ies be ra co rk ica CN er ch hs m ax n ls n vo m nt nt W a ia ne s s m M M s o O s l y a c t s r r i ) Methanol Formic Acid Ethanol Ethylene Ethylene Oxide Ethylene Glycol (MEG) Acetic Acid Ethyl acetate Bio-based chemicals Epichlorohydrin Acetone isoPropanol Propylene Propylene Glycol 1,3-Propanediol Lactic acid Acrylic Acid n-Butanol iso-Butanol iso-Butylene Butadiene Succinic acid 2,3-Butanediol 1,4-Butanediol Tetrahydrofuran Isoprene Adipic acid HMDA Benzene Toluene Paraxylene Terephthalic acid StyreneNNFCC: The Bioeconomy Consultants © NNFCC
  12. 12. NNFCC Industry drivers & concerns End of life options Product performance Technology development Green branding & corporate sustainability Production economics Feedstock economics Policy intervention & indirect effectsNNFCC: The Bioeconomy Consultants © NNFCC
  13. 13. NNFCC Material End of Life – New Opportunities EU Waste Framework Directive 2008/98/EC Prevention Re-use Recycling Recovery Land fill or incinerationNNFCC: The Bioeconomy Consultants
  14. 14. NNFCCNNFCC: The Bioeconomy Consultants
  15. 15. NNFCCNNFCC: The Bioeconomy Consultants © NNFCC
  16. 16. NNFCCNNFCC: The Bioeconomy Consultants Image courtesy BASF
  17. 17. NNFCCBio-based chemical platforms Polybutylene Succinic Acid 1,4-Butanediol Terephthalate Tetrahydrofuran Copolyester Ethers Deicers/Coolent Polytetramethylene Ether Glycol Solvent Thermoplastic Plasticisers Polyurethanes g-Butyrolactone Spandex Fibres Fuel Additives Fine & Speciality Chemicals N-Methyl -2- N-Vinyl-2- Pyrrolidone 2-Pyrrolidone Pyrrolidone Fine & Speciality Fine & Speciality Polyvinyl Chemicals Chemicals PyrrolidoneNNFCC: The Bioeconomy Consultants
  18. 18. NNFCCBio-based chemical platforms 60% Ethanol Ethylene Polyethylenes 7% Styrene Polymers/Rubbers MonomerEthanol production ~ 70 million tonnes Ethylene 14% Polyester Oxide/GlycolEthylene production ~ 110 million tonnes 12% EDC PVC 7% Other Alpha Olefins PVA PET CollaborativeNNFCC: The Bioeconomy Consultants
  19. 19. NNFCCBio-based materials – Novel or drop in? • Drop in – known targets and downstream products Strengths • Novel – exploits attributes of biomass or biological processing • Drop in – number of unit operations required Weaknesses • Novel – requirement for product development • Drop in - rapid route to market through existing Opportunities infrastructure and know how • Novel – provides new or improved functionality • Drop in – production never achieves cost competitiveness Threats • Novel – immature supply chain and market awarenessNNFCC: The Bioeconomy Consultants © NNFCC
  20. 20. NNFCCDevelopment Pipeline • Ethylene glycol  Opportunities for bio-based • Epichlorohydrin C3 and C4 intermediates Today • Lactic acid • Propanediol  Niche opportunities in compostable packaging • Succinic acid • Butanol Near term • Butanediol  Value adding opportunities • Propylene in co-polymer development • Isoprene Medium • Butadiene term • Acrylic acid • Terephthalic acidNNFCC: The Bioeconomy Consultants © NNFCC
  21. 21. NNFCCFuture Technology Synthesis gas based fermentation Developing microorganisms capable of converting syngas to valuable platform chemicals Aug. 13, 2012 - Joint Development Agreement for Bio-Based ButadieneNNFCC: The Bioeconomy Consultants
  22. 22. NNFCC The challenges Technology Strategic Sustainability • Biomass crop • Integration into • Direct land use yields existing value change • Biomass chains • Indirect land use composition • Financing change • Logistics • Policy robustness • Biodiversity • Enzyme • Standards & • Emission (land, development labels air, water) • Fermentation • Public • Social impacts yields procurement • Novel productsNNFCC: The Bioeconomy Consultants © NNFCC
  23. 23. NNFCC Do we have enough land to feed the planet and produce the low carbon energy, fuels and materials needed by a population expected to reach 9 billion by 2050?NNFCC: The Bioeconomy Consultants
  24. 24. NNFCCRegional Development Sustainable agriculture & forestry Established agri supply chains Strong technology base Sustainable agriculture Limited political support Established agri supply chains High residue availability Strong technology base Strong political support Agricultural sustainability? Land availability? Strong political support Access to growing markets Established cultivation and processing Available arable land High crop yields (sugar cane) Large arable land Good residue availability potential (bagasse) Limited access to skills Good access to growing markets Limited access to marketsNNFCC: The Bioeconomy Consultants © NNFCC
  25. 25. NNFCCLand availability and useGlobal arable land could be doubledHowever, what is the limit of sustainable expansion?What are the environmental and societal implications ofexpansion and land use change?NNFCC: The Bioeconomy Consultants
  26. 26. NNFCCBiopolymer Scenarios - land requirements (2030) 50 % of available land 40 30 Chemical driven 20 Biofuel stalled 10 Biofuel driven 0 Bioeconomy Polymer demand – 428 million tonnes Land availability – 250-800 million ha (Source FAO)NNFCC: The Bioeconomy Consultants © NNFCC
  27. 27. NNFCCLand requirements – the bigger pictureNNFCC: The Bioeconomy Consultants
  28. 28. NNFCC Feedstock Development Today Sugar, starch and oil crops. Near term Builds on current Agricultural residues. Future agricultural value chains. Bolts on to current Algae, Biomass crops and Expensive and tied to food agricultural production. & feed chains. carbon dioxide. Requires collection and Requires development of logistical development. new supply chains and Technology improvements cultivation technology. required to meet current economics. NB - The use of algae as a production tool should not be confused with its use as a feedstockNNFCC: The Bioeconomy Consultants © NNFCC
  29. 29. NNFCC To maximise the transnational value of algal pilots across NWE, by creating an integrated Network that incorporates an up to date inventory and in which pilots collect and share data. To identify the political, economic, social and technological opportunities for sustainable exploitation of algae within NEW. To combine information in an ICT-based tool which can guide decisions, identify gaps in knowledge and capability and provide a roadmap for stakeholders.NNFCC: The Bioeconomy Consultants
  30. 30. NNFCCNNFCC: The Bioeconomy Consultants
  31. 31. NNFCC Sustainability through project control Round Table on Sustainable Biofuels12 Principles for sustainable biofuel production – Legality – Planning, Monitoring and Continuous Improvement – Greenhouse Gas Emissions – Human and Labour Rights – Rural and Social Development – Local Food Security – Conservation – Soil – Water – Air – Use of Technology, Inputs and Management of Wastes – Land Rights NNFCC: The Bioeconomy Consultants
  32. 32. NNFCC Summary - Bio-based Materials outlook • Consumer preference Strengths • Reduced carbon footprints & fossil energy use • Novel / Improved function • Low volume / High costs Weaknesses • Immature supply chain • Market confusion • Oil price volatility Opportunities • Capture C3 and C4 markets • Co-development with fuel industry • Feedstock supply Threats • Alternative feedstocks (coal, gas) • Environmental pressureNNFCC: The Bioeconomy Consultants
  33. 33. NNFCC UK and Norway Capabilities and Opportunities for Joint Working on Biorefining and Industrial Biotechnology? Review Basis • Industrial Competence • Research Competence • Feedstock Opportunity Recommendations • Tailored networking • Relationship building through exchange programs • Information exchange • Industrial stakeholder engagement • Build programs around FP7 and other EU programs • Review ERA-Net participation • Joint funding calls as a basis for interactionNNFCC: The Bioeconomy Consultants
  34. 34. NNFCCHypotheses examined and rationalised to give focusareas Renewable Raw Materials Markets Forestry Bulk chemical- Marine by using industries Technology Areas (Biofuels and products Chemicals) Microbial strain Macro & Speciality Algae and Biocatalysis development & microalgae Ingredients (feed Marine Fermentation cultivation and chemicals) OrganismsNNFCC: The Bioeconomy Consultants
  35. 35. NNFCCProcess demonstration and scale upNNFCC: The Bioeconomy Consultants
  36. 36. NNFCC Bio Base NWE Supporting the development of the bio-based economy in North West EuropeNNFCC: The Bioeconomy Consultants
  37. 37. NNFCC Bio Base NWE Supporting the development of the bio-based economy in North West EuropeNNFCC: The Bioeconomy Consultants
  38. 38. NNFCC AimsTo support the development of the bio-based economy in NWE• To acquaint companies, research centers and education centers of NWE with Bio Base Europe o Bio Base Europe Pilot Plant: independent facility to address upscaling needs o Bio Base Europe Training Center: to address specific training needs for operators of the bio-based economy• To assist companies by giving technological support• To aid companies, research centers and education centers of NWE to network internationally• Political support for the bio-based economy by giving SMEs a voice, and by developing a common strategyNNFCC: The Bioeconomy Consultants
  39. 39. NNFCCSummary Bioeconomy DriversTrends to watchRenewable versus Raw material supplyNuclear/Unconventional gas/CCSSolid biofuel versus liquid biofuelBioenergy versus bio-based materials Bio economyBiodegradable versus durable Bio-based plastics Environmental Technology concerns developmentImpact of NGLs on C2/3/4 platformsNNFCC: The Bioeconomy Consultants
  40. 40. NNFCC The NNFCC provides high quality, industry leading consultancy for more information contact us Email - +44 (0) 1904 435182 Follow us on Twitter @NNFCC• Future Market Analysis • Technology evaluation & associated• Feedstock Logistics Planning due diligence• Sustainability Strategy • Project feasibility assessment Development • Policy and regulatory supportNNFCC: The Bioeconomy Consultants
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