Global competitive sugar market
The first and foremost driver he rightly considers is the development of the international sugar market. Sugar is by far the most important feedstock for bio-based chemical industries.
The global sugar market has been dominated so far by Brazil (cane sugar) and the US (corn sugar). Europe, based on its rapidly rising productivity of its sugar beet, is the ‘new kid on the block’, according to Martin Todd, the Managing Director of LMC International, a UK-based economic consultancy specializing in agricultural commodities. In 2017, when European sugar quota will be lifted, Europe will be the most efficient sugar producer. The sugar beet will become the backbone of the bio-based economy in North-Western Europe.
More water to the mill can be found in the “Analysis of the market and cost competitiveness of North-West Europe Sugar beets” , a study by Deloitte Netherlands presented by Ton Runneboom , Honorary Chairman of the Dutch Bio-renewable Buisness Plateform, during Day 1 of the Biomaterials conference in Köln mid-April 2015. (See the editor’s report on this blog and also http://www2.deloitte.com/na/en/pages/manufacturing/articles/opportunities-for-fermentation-based-chemical-industry.html)
Healthy biobased competition
The second driver is that a healthy competition is developing among bio-based companies themselves. This wakes-up the market out of the mono-source nightmare of the early adopters: being supplied specialties produced by a single supplier. Therefore, the bio-based industry as a whole takes benefits from the fact there are now two suppliers of bio-based succinic acid, BioAmber and Reverdia, and there will soon be two commercial suppliers of biobased 2,5-Furandicarboxylic acid (FDCA) : Avantium (NL), that will produce it through a catalysis process, and Corbion (NL), that will produce it through a fermentation process from biomass.FDCA is the building block for the 100% biobased Polyethylene Furanoate (PEF), a very innovative oxygen barrier substitute of therephtalic acid as component of bio-polyester.
Integrated processes valorizing the side steams
Thirdly, industry tends to develop integrated processes, which use the entire bio-based feedstock. This is essential to be competitive with the petrochemical industry for Corbion’s CEO Tjerk de Ruiter. In his view, the future in plant based chemistry belongs to the integrated second generation bio-refinery that can valorize the side streams. This is precisely why, even in the Netherlands, with its potentially rich production of first-generation sugar feedstock, much emphasis is placed on biomass and the so called second-generation feedstock (cellulosic sugars and lignin).
Applications of bio-based performance materials
But in Diederik van der Hoeven’s opinion, and I cannot agree more with him, the most convincing evidence in the picture of slow but steady developments in the bio-based economy is the multiplication of the applications of bio-based performance materials with attractive new properties throughout the spectrum of industrial and consumer products.
In the Netherlands, DSM (NL) is currently reporting an impressive list of successful developments. One of their star products is a zero VOC (Volatile Organic Compound) performance paint, now available in one of the leading Dutch Do-It-Yourself chains. Their Arnitel™ Thermoplastic Copolyester Elastomer is a viable replacement for PVC. Their Niaga™ carpets are fully recyclable with top and bottom layers made from the same material. This will allow to offer customers the option of renting rather than buying new carpets, in line with the popular trend of sharing rather than owning . DSM’s Ecopaxx™, produced mainly from castor oil that do not compete with the food chain, is a performant polyamide that can be applied in the most demanding of environments, for instance under the hood of motor cars. And, this bio-based polyamide has a minimal carbon footprint, as the CO2 emitted in the production of the plastic equals the amount absorbed by the castor plant during its growth.
Next crucial step towards maturity: a fully reliable supply chain.
Rabobank’s Daan Dijk and BioAmber’s CMO, Babette Pettersen both highlighted that industry should now strive to develop loyalty in supply chains. In the end, brand owners have much decision power over the use of materials. But the chemical industry hardly sells directly to brand owners. Often, there is a long fragmented value and supply chain. In order to get the market going, bio-based products should be made available in commercial quantities and used by every company along the value and supply chain. Quite a challenge for the years to come, specifically for Europe, until public/private partnerships within JIT Biobased Industries can deliver. Europe currently generates much of the knowledge but attracts little industrial investment and creates too few additional jobs in the bio-based economy.