biobased chemicals – markets, innovation & opportunity

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Biobased Chemicals – Markets, Innovation & Opportunity Adrian Higson High Value Chemicals from Biomass Royal Society of Chemistry Meeting 17 th September 2013

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This presentation was given at a Royal Society of Chemistry Industrial Biotechnology Group Meeting on the 17th September 2013. The presentation covers the key aspects of the biobased chemical market and introduces the support for innovation given by the European Interreg IVB Bio Base NWE project.

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Page 1: Biobased chemicals – markets, innovation & opportunity

Biobased Chemicals – Markets,

Innovation & Opportunity

Adrian Higson

High Value Chemicals from Biomass

Royal Society of Chemistry Meeting

17th September 2013

Page 2: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

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.

A specialist ‘not for profit’ Bioeconomy consultancy

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.

Page 3: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Services

• Market analysis

• Feedstock logistics planning

• Sustainability strategy development

• Initial technology and economic

appraisal

• Project feasibility assessment

• Policy and regulatory support

• Network & Facilitation

Clients & Partners

• Multinationals & SMEs

• Public Organisations

• Government

• Research Institutes

• Universities

• R&D Collaborations

• Research Councils & TSB

• EU Projects

Celebrating 10 years of Bioeconomy development

Page 4: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

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.

EUROPEAN COMMISSION – PRESS RELEASE

Brussels, 13 February 2012

Commission proposes strategy for sustainable

bioeconomy in Europe

Page 5: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Biomassprovision

Biomass trading

Biomassrefining

Fuel production

Fuel blend & retail

Chemical production

Chemicalindustry

Biomass power& heat

Chemical usingindustry

Retailers

Pharmaceutical industry

Food ingredients

Food industry

Retailers

Food & Feed industry

Feed ingredients

Feed industry

Page 6: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Feedstock Pricing – A new normal

Source: International Monetary Fund

Price

ind

ex, 2

00

5 =

10

0

0

50

100

150

200

250

300

Agricultural Raw Materials

Food

Crude Oil (Petroleum)

Page 7: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

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

Page 8: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

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.”

Page 9: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Biobased chemicals market trends

• Market growth through drop in replacements for

current petrochemicals.

• Shale gas development creates winners and losers in

the biobased chemical sector.

• Novel polymers finding a route to market through the

production of added value co-polymers.

• Emergence of stand alone turn key cellulosic sugar

technologies.

Page 10: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

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

Page 11: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

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

Page 12: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Over 50 commodity

or platform

chemicals in

development or

commercialisation.

UK examples

Page 13: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

CO2 capture and use

By-products, residues &

wastes

Biomass Crops & Forestry

Food crops

Feedstock choice is key to

supply chain acceptability.

However the biobased

products are differentiated

from biofuels & bioenergy.

e.g. scale, alternatives

WWF Biobased Panda

Page 14: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

To maximise the transnational value of algal pilots across NWE, by creating an integrated Network To identify the political, economic, social and technological opportunities for sustainable exploitation of algae within NWE. To combine information in an ICT-based tool which can guide decisions, identify gaps in knowledge and capability and provide a roadmap for stakeholders.

Page 15: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

EU Industrial Policy

A Stronger European Industry for

Growth and Economic Recovery

October 2012

Innovating for Sustainable Growth:

A Bioeconomy for Europe

February 2012

Bioeconomy funding - ~€4bn (double the funding available through PF7)

European Economic Strategy

Page 16: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Bio-based Industries PPP: The challenge, Overcoming the

innovation Valley of Death by bridging the gap from research to

the marketplace.

The EU contributes

€1 billion to the

research and

innovation program,

European industries

have committed to

another €2.8 billion

http://bridge2020.eu/

Page 17: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Process demonstration and scale up

Page 18: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

• 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.

• The Bio Base NWE partnership includes organizations from

five different countries.

Page 20: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

1. The network, representing leading bio-based economy experts, advises

entrepreneurs from across North West Europe 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. Financial support to 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.

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

Page 21: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Innovation Coupons for SME’s

• Innovation coupons for SME’s are a central part of the Bio Base NEW project.

These € 10.000 innovation coupons provide SME’s with access to the facilities

of the Bio Base Europe Pilot Plant.

• This allows your business to assess the feasibility of taking an bio-based idea

or a technology into industrial production.

• The Bio Base Europe Pilot Plant provides testing and production facilities from

laboratory scale to multi-ton semi-industrial scales.

• Bio Base NWE provides not only technological know-how, but also cost-

assessment or barrier analysis.

Page 22: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Page 23: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

Page 24: Biobased chemicals – markets, innovation & opportunity

Copyright © NNFCC 2012.

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.

Added ‘value’ markets provide growth platform.

Feedstock economics drive

toward C4 commodity chemicals

Commercial development based

on collaborations

Summary

Bioeconomy Drivers

Page 25: Biobased chemicals – markets, innovation & opportunity

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]