Contract commits Vinmar to initially purchase 450 million tons of AirCarbon PHA on a take-or-pay basis over 20 years -The Vinmar contract provides for the sale of 100% of AirCarbon PHA from Newlight’s planned 23 million tons/year production facility for 20 years. The contract will also cover 100% of the output from a future 135 million tons/year facility, and a 270 million tons/year planned facility. AirCarbon PHA production will be ramped up in 3 phases, and contract maybe expanded by mutual agreements to cover additional AirCarbon production up to 19 billion pounds over 20 years.
AirCarbon is a PHA-based thermoplastic made from greenhouse gas with applications being developed in a wide range of products such as films, caps, closures, furniture, electronic accessories, bottles, etc. AirCarbon is produced by combining a high-yield biocatalyst with air and captured methane-based greenhouse gas emissions to produce a bio-based AirCarbon thermoplastic material that is reportedly cost-competitive with petroleum-derived thermoplastics.
Newlight Technologies currently operates a 45 tons/year PHA production at its California facility. Newlight’s microorganism-based biocatalyst reportedly generates a polymer conversion yield that is over nine times higher than previous methane-to-PHA conversion technologies.
“This contract launches AirCarbon to world-scale volume, and sets Newlight on a path to accomplishing its founding goal of changing how the world makes materials, by harnessing greenhouse gas as a resource,” said Mark Herrema, Newlight CEO and Co-Founder, “With this agreement, we are poised to participate in the growing demand for sustainable materials with a material made by capturing carbon that would otherwise become part of the air.”
“Vinmar is excited to be a part of the growth and development of Newlight’s AirCarbon PHA,” said Kartik Mehta, a senior executive of Vinmar. “Our long-term off-take contract with Newlight reflects the potential we see for AirCarbon. Demand for plastics will continue to grow globally and AirCarbon addresses an important need in the market. We believe Newlight’s advanced high-yield technology, unique cost structure, and commercial-scale operations position AirCarbon to effectively compete in the market on price and performance, allowing us to market AirCarbon PHA to a broad range of customers,” he added.
The question is, how much is the current AirCarbonPHA manufacturing cost and how low can it go with an initial commercial production of 23 million tons/year? Other PHA polymers have reportedly been sold at around $5-6/kg. Newlight Technologies recently delivered its first commercial volume shipment of its AirCarbon PHA to computer manufacturer, Dell. It can be used as a stand-alone material or incorporated into existing materials such as Dell’s LLDPE bags.