$770B Renewable Chemicals and Materials by 2020

The Biotechnology Innovation Organization released a landmark report entitled “Advancing the Bio-based Economy: Renewable Chemical Biorefinery Commercialization, Progress, and Market Opportunities, 2016 and beyond”

The document substantiates the foreseeable ongoing growth in the renewable chemical industry and outlines federal and state policies that efficiently support the industry.

Significant growth in renewable chemicals

BIO reports that “McKinsey & Co. estimates that there were $252 billion in sales of bio-based products in 2012, with biofuels and plant extracts comprising more than half. Sales of renewable chemicals represented 9 percent of the $2,820 billion in worldwide chemical sales in 2012.

By 2020, McKinsey expects bio-based products to make up 11 percent of the $3,401 billion global chemical market. Sales of bio-based products would reach $375 to $441 billion by 2020, with a compound annual growth rate of 8% over the preceding decade.”

The Policy Supports

BIO pointed to the “Renewable Fuel Standard” which “not only helped stimulate innovation in biofuels, but also opened discussions and policy development in renewable chemicals and bio-based products.”

BIO also noted the The 2014 Farm Bill that extended loan guarantee eligibility to renewable chemicals and bio-based products producers, through Section 9003, the Biorefinery, Renewable Chemical, and Bio-based Manufacturing Assistance Program. Other policy drivers include draft legislation, introduced in both federal chambers, creating tax incentives for production of or investment in qualifying renewable chemicals.

Spurred by the federal legislation, BIO applauded Iowa and Minnesota for enactment of state-level production tax credits for renewable chemicals that will speed capital investment availability and commercialization.

Additionally, BIO said that draft legislation introduced in the 114th Congress — the “Master Limited Partnerships Parity Act (MLP) “– proposes to extend tax benefits currently available only to the oil and gas industry to renewable chemicals and biofuels producers. If enacted, the legislation will provide renewable chemical producers access to low-cost capital and attract investors and lower corporate stock tax liabilities.

Advanced bio-product manufacturing : a priority technology area

The National Science and Technology Council’s Subcommittee on Advanced Manufacturing, in an April 2016 report entitled “Advanced Manufacturing: A Snapshot of Priority Technology Areas Across the Federal Government,” identifies engineering biology and advanced bio-products manufacturing as technology areas of emerging priority.

The report estimates the size of the U.S. bio-based economy at roughly $350 billion annually, citing a National Research Council roadmap to accelerate advanced chemical manufacturing through industrial biotechnology.

An encyclopedia of technologies currently undergoing commercialization

The BIO report profiles Renewable Chemical Commercialization Successes and pilot and demonstration scale projects. It includes a snapshot of nearly half of the 150 active companies in the field.

Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, stated, “The bio-based economy is alive and well; it is not just about biofuels development. BIO’s new report on renewable chemical bio-refineries illustrates the range of technologies currently undergoing commercialization in the industrial biotechnology space. Analysts predict rapid expansion of renewable chemical sales based on existing and planned production capacity, which for the first time has been catalogued in this report.

Growing competition in the sector will assure manufacturers of a steadily available, high-quality and more sustainable supply of renewable chemical building blocks to replace petroleum in consumer products.

“Important policy drivers for the future include legislation that would create tax incentives for qualifying renewable chemical production and investments in bio-refineries. Spurred by this draft federal legislation, a number of states, such as Iowa and Minnesota, recently enacted production tax credits for renewable chemicals that will help attract renewable chemical companies, build capital investment availability and speed commercialization.”

A link to the complete BIO Report is here: report can be downloaded here.


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