Bio-based products - Opportunities and Challenges

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Bio-based products - Opportunities and Challenges

  1. 1. NNFCC Bio-Based Products Opportunities and Challenges Dr Adrian Higson February 2012The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  2. 2. NNFCC Background The production of renewable economy biological resources and the conversion of these resources and waste streams into value added products such as food, feed, bio-based products and bio- bioenergy economy Products that are wholly or partly derived from materials of bio-based biological origin excluding products materials embedded in geological formations and/or fossilisedThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  3. 3. NNFCC Market Dynamics Brand owner focus Climate change Politically Consumer Environment Mandates/Support Driven Pull Functionality Raw Volatility Hedging Technology Industrial Biotech Material Future proofing Push New chemistry FlexibilityThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  4. 4. NNFCC Comparative Feedstock Pricing Comparison of Commodity Indices (2005 = 100) 300 250 200 150 100 50 0 Crude Oil (Petroleum) Index (monthly) Commodity Agricultural Raw Materials index (monthly) Commodity Food Price Index (monthly)The UK’s National Centre for Biorenewable Energy, Fuels and Materials Source: IMF
  5. 5. NNFCC The value of biomass Increasing value Decreasing volumeThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  6. 6. NNFCC Biomass – A love hate relationship! • Available on demand Strengths • Carbon source • Cost Weaknesses • Physical nature • Energy generation (heat and power) Opportunities • Liquid transport fuels • Chemicals and materials • Competition for land Threats • Environmental pressureThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  7. 7. NNFCC Developing the bio-based economy – The issues• Varying levels of • Large financing • Food security • Public support requirements • Land rights perception of• Policy for capital GM inconsistency projects technologiesPolitical Economics Social Technology • Climate change • Biodiversity agreements • Land use • Energy change obligations Legal EnvironmentThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  8. 8. NNFCC Market building - European Lead Market Initiative • Standards, labels and certification • Legislation promoting market development • Product specific legislation • Legislation related to biomass • Encourage Green Public Procurement • Financing and funding of researchThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  9. 9. NNFCC Bio Chemicals and Bio-Based Polymers (all areas of economy) Chemical Derivatives Naval Stores Market size Natural Products Oleochemicals ~ 50 million tones Biopolymers Amino Acids Alcohols Aliphatic acids Other Fermentation Products 54% 7% 4% 17% 1% 7% 5% 1% 20% 1%The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  10. 10. NNFCCOpportunity, complexity, and confusionThe UK’s National Centre for Biorenewable Energy, Fuels and Materials Source IEA Task 42, NNFCC
  11. 11. NNFCCToday’s situation Hurdles • Lignocellulose deconstruction • Fermentation scope and yields • Downstream processing Game changers • Synthetic biology • Synthesis gas fermentationThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  12. 12. NNFCC Bio chemical 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 pressureThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  13. 13. NNFCC Supply chain questions • What’s the value proposition in bioplastics? – Function vs renewable content • What does the environmental footprint look like? – greenhouse gas emissions, water impacts • How big is the potential market opportunity/impact? Time horizons – niche or mainstream 2020 – true rate of development 2030 2050 • What do the resource requirements look like? – Availability, price, impact on other markets • How will technology develop? – Synthetic biology, perennial crops etcThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  14. 14. NNFCCBio chemical platforms – 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 awarenessThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  15. 15. NNFCC Expansion of drop-in bio-based chemicals Gr ee Ca Re nc Gl th ol ve yc ay Co Ta rd Go Ea M os Gl In lb i iw a( od et stm Companies working on bio chemicals ob Am ol Bi du Gl an Gr DS ab tT ye ot al st o an yr In ee ol Co Na M ec ba ar ec ria Bi Ge is/ di ic nB Ch An /R /G hn rp oe hn lB tu lB Ve Bi Bi aG M Re no Ex Bu No Ze Br Vi oq or em el en Bi M OP ol ne re io oA oc io ol io rd Du ich m nn Dr pl So lyc ny ac as ta lo oM og at ve lo yr Vi ch wo ue og te Pu en al rg X e m DO ica Ge or at AD TM P he eli te DS ov at ke m gic io re lva th ian zy ie do em ol ch ph ie t te Bi ies on be ra co rk ica CN er ch hs ax n ls n vo m nt W a ia ne s s m M M s o O s l y a c t s r t r i ) Methanol Formic Acid Ethanol Ethylene Ethylene Oxide Ethylene Glycol (MEG) Acetic Acid Ethyl acetate Epichlorohydrin Acetone isoPropanol Propylene Bio chemicals 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 StyreneThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  16. 16. NNFCCBio chemical platforms 60% Ethanol Ethylene Polyethylenes 7% Styrene Polymers/Rubbers MonomerEthanol production ~ 60 million tonnes 14%Ethylene production ~ 110 million tonnes Ethylene Polyester Oxide/Glycol 12% EDC PVC 7% Other Alpha Olefins PVAThe UK’s National Centre for Biorenewable Energy, Fuels and Materials Source: Nexant ChemSystems
  17. 17. NNFCCBio 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 PyrrolidoneThe UK’s National Centre for Biorenewable Energy, Fuels and Materials Source: Nexant ChemSystems
  18. 18. NNFCCProduction regions Geographical regions offer different opportunities and pose different challenges e.g. • Feedstock sustainability and availability? • Access to skills and wider business support? • Access to downstream markets?The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  19. 19. NNFCCBio Polymer Scenarios - land requirements (2030) 50 % of available land 40 30 Chemical driven 20 Biofuel stalled 10 Biofuel driven 0 Bioeconomy Plastic demand – 428 million tonnes Land availability – 250-800 million ha (Source FAO)The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  20. 20. NNFCC Maximising resource use raw material Material Cycle Energy CycleThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  21. 21. NNFCC The NNFCC provides high quality, industry leading consultancy for more information contact us Email - enquiries@nnfcc.co.uk Twitter - @NNFCC +44 (0) 1904 435182• Future Market Analysis • Technology evaluation & associated• Feedstock Logistics Planning due diligence• Sustainability Strategy • Project feasibility assessment Development • Policy and regulatory supportThe UK’s National Centre for Biorenewable Energy, Fuels and Materials

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