The importance of consistent policy and proper incentives to support the transition towards a Bio-based Economy

Transcription

1 The importance of consistent policy and proper incentives to support the transition towards a Bio-based Economy Perspective from DSM, a multinational headquartered in The Netherlands Marcel Wubbolts, Chief Technology Officer Presentation can be downloaded: bit.ly/biobaseddsm European Forum for Industrial Biotechnology, October 18, Düsseldorf

2 Safe harbor statement This presentation may contain forward-looking statements with respect to DSM s future (financial) performance and position. Such statements are based on current expectations, estimates and projections of DSM and information currently available to the company. DSM cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. DSM has no obligation to update the statements contained in this presentation, unless required by law. The English language version of this document is leading. A more comprehensive discussion of the risk factors affecting DSM s business can be found in the company s latest Annual Report, which can be found on the company's corporate website, Page 1 European Forum for Industrial Biotechnology,

3 Mission Our purpose is to create brighter lives for people today and generations to come. We connect our unique competences in Life Sciences and Materials Sciences to create solutions that nourish, protect and improve performance. Page 2

4 Thi s im Unique business positions of DSM Health Nutrition Materials Global leader in nutritional ingredients for feed, food and personal care Market leader in anti-infectives and key custom manufacturing player Market leader in sustainable high performance materials Merchant market leader in nylon precursor caprolactam Innovator active in advanced biofuels, biochemicals and biomedical materials Page 3

5 Thi Thi s im DSMs global presence World total: 200+ locations, 22,000 employees North America: 33 locations 4,000 employees Europe: 64 locations 13,000 employees China: 31 locations 3,000 employees Latin America: 15 locations 1,000 employees India: 8 locations 700 employees Page 4

6 Thi s im Aging population wants to stayhealthy and active HEALTH I MATERIALS There are over 6 million people who have Dyneema Purity in their body. Increased healthcare cost drives demand for lower cost generics Every year DSM produces antibiotics to cure 600 million people. Focus on health through food and supplements Active lifestyle requires materials for replacement of body parts Page 5

7 Thi s im Protection and health for all HEALTH I NUTRITION I MATERIALS Protection for people and food Drive toward healthier products Legislation drives shift to sustainable coatings Green image key for brand value in electronics percent of the world s harvest currently goes to waste. Food safety is key. Contamination with bacteria / viruses, can result in illness. and sometimes worse. Page 6

8 Thi s im Growing population drives food and feed HEALTH I NUTRITION Ongoing urbanization drives processed food demand Food processing ingredients enable productivity improvements Higher income changes diets to more protein-rich and convenient food Feed efficacy and animal welfare are key to meeting meat demand Adding VevoVitall to pig feed saves ammonia emissions; if all growing pigs in the world ate VevoVitall, around 250 million kilos of ammonia would be saved per year Page 7

9 Thi s im Addressing the need for renewable energy MATERIALS Sustainable windmill blades Enabling wind powered shipping Capturing the power of the sun Lighter cars & planes

10 Thi s im Renewables, enabling the bio-based economy LIFE SCIENCES & MATERIALS SCIENCES Energy and resources security requires renewable energy Renewable energy from residues & waste (biofuel, biogas), sun and wind Demand for greener products It can be calculated that by 2022 ~ plants to produce cellulosic bio-ethanol from corn crop residue could be required in the US. Bio-based alternatives to oil-based products Nature takes 10,000 years to turn plant material into fuels. DSM can do that in a week. Page 9

11 The Bio-based Economy Working from renewable feedstocks avoiding competition with the food chain NOT just about biofuels (EU in particular) Capturing maximal value from biomass (NB much more than burning value - subsidized) Almost every fossil-derived product could be bio-based or have a bio-based alternative Page 10 European Forum for Industrial Biotechnology,

12 DSM and Biodiversity Walk the talk Product and process evaluations via LCAs, water risk assessments, energy intensity Element in (development of) site selections, M&A Participation in platforms and commissions Ctee Corbey Manifest Biobased Economy Leaders for Nature CEFIC Platform VNO-NCW/IUCN Platform with Essent Inspirational programme IUCN Position papers biodiversity and sustainable biomass ( ) Page Page 11 European Forum for Industrial Biotechnology,

13 DSM focus on (Ligno)cellulosic Biomass Agricultural residue as a feedstock Existing crops on existing agricultural land Corn, wheat, rice, sugarcane, wood chips, 25% residue removal or less Soil structure protected Farmers Residue Management Get paid for residue Darker soil surfaces in spring - faster germination Increased corn yields (over time) - excess residue Page 12 European Forum for Industrial Biotechnology,

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15 14 Shaping our Plans: from Vision to Business Bio-based Products & Services DSM Bio-Based Products & Services Bio-based Energy Bio-based Chemicals & Materials Cellulosic Bioethanol Biogas Microbial Biodiesel Biosuccinium succinic acid Bio-based Adipic Acid Emerging Portfolio Joint Ventures drive commercialization:

16 From biomass to cellulosic bio-ethanol

17 DSM s Current Global Perspective on cetoh Wheat Straw Denmo in Kalundborg, Denmark Capacity over 5 million liters p.a. Corn Stover Construction in Emmetsburg, Iowa, USA Investment $250 million Capacity over 20 million gallons Replicate technology throughout POET s existing network of 27 corn ethanol plants Cane Bagasse Construction in Alagoas, Brazil Capacity over 80 million liters per year Page 16 European Forum for Industrial Biotechnology,

18 Policy defines attractiveness US market RFS as a driver RFS provides certainty to the US market for cellulosic ethanol 7.8 billion gallons of cellulosic ethanol from corn crop residue by 2022 The renewable fuels industry has created 400,000 jobs in the U.S US ethanol contributed $42.4 billion to GDP Improving America s energy security, economy and environment. US advantage would be diminished without the RFS Attracting foreign investments (Novozymes, Abengoa, Chemtex, BP Biofuels ) DSM is investing $150M because of the RFS Technology, logistics, financing in place Ability for rapid expansion Policy Corn ethanol: + 12 billion gallons in 10 years ( ) Bolt-on: use existing infrastructure Diversity of feedstocks: 50 state solution Page European Forum for Industrial Biotechnology,

19 EU: Lost Continent? by no means! Source: Page European Forum for Industrial Biotechnology,

20 Inter-Regional Initiatives (Geleen, NL) Chemelot Industrial Park & Campus Chemelot Industrial Park Chemelot Campus DSM Innovation Center Page European Forum for Industrial Biotechnology,

21 Inter-Regional Initiatives (Delft, NL) BPF: Industrial Park & Campus for 2G Feedstocks Page European Forum for Industrial Biotechnology,

22 The Netherlands: Top Sectors High Tech Materials & Systems Life Sciences & Health Agro - Food Logistics Water Creative Industries Energy Chemistry Horticulture & Feedstocks Page European Forum for Industrial Biotechnology,

23 Complex European Policy Landscape Need for consistency & aligned policies! FP7 Horizon 2020 Bioeconomy Strategy LMI Lead DG R&I Market Initiative Structural funds EIP Sustainable Agriculture DG Waste Industry ERA-NET ETPs Framework directive DG Agri BIO ECONOMY DG Regio DG Envi DG Energy Resource Efficiency Agricultural Policy CAP - Common ILUC KET PPPs FQD Fuels Quality Directive EU 2020 RED - Renewable Energy Directive Packaging directive Page 22

24 Horizon 2020: PPP Biobased for Growth An integrated value chain approach A joint initiative to overcome industry challenges Focused on development and actual realisation of integrated biobased value chains Cross-sectoral integration - From biomass production to markets & products Facilitated by realisation of demo and flagship projects Page European Forum for Industrial Biotechnology,

25 PPP Biobased for Growth An integrated value chain approach Page European Forum for Industrial Biotechnology,

26 PPP Biobased for Growth An integrated value chain approach Page European Forum for Industrial Biotechnology,

27 Horizon 2020: SPIRE PPP Sustainable Process Industries

28 Process Industries in the Value Chain Raw Materials Process Industry: Chemical, biochemical, and physical transformation and formulation of raw materials using continuous and batch processes into Materials with new properties and functionalities Discrete Manufacturing: Components & Products Courtesy: Loredana Ghinea, CEFIC

29 SPIRE Roadmap Components Energy and Resource Efficiency Energy Feed Process Cradle-to-cradle Recycle End-of-life Waste Markets Applications Products Materials Water Courtesy: Loredana Ghinea, CEFIC

30 Members AkzoNobel Arcelor Mittal Arkema BASF Bayer BFI Cefic Cerame-Unie CEMBUREAU CIRCE CLIB2021 CMI CRM CSM DECHEMA Dow DSM EUnited Eurofer Eurometaux Evonik Fraunhofer Green Chemistry Campus HVM Catapult Hydro IMA Europe ISPT Kauno Jiesia Lanxess LKAB Mapei Novamont Perstorp P&G Repsol SINTEF Solutex Solvay Supren Swerea MEFOS TataSteel Tecnalia Tenaris ThyssenKrupp TNO University of Bologna VITO Voestalpine VTT WssTP Courtesy: Loredana Ghinea, CEFIC

31 Thi s im Key messages DSM has a unique combination of Life Sciences (Nutrition and Pharma) and Materials Sciences (Performance Materials) competences, and uses these to create sustainable value for customers, employees, shareholders and society Collaboration between all stakeholders: knowledge institutes, business partners, governments, and society is needed to realize a Biobased Economy Appropriate support (Horizon 2020, tailored RD&I funding, incl. pilot and demo, get rid of wrong incentives) and stimuli (market development, public procurement) and above all, consistent & aligned policies are required to accelerate towards the Biobased Economy Page 30

32 Thank you. Marcel Chief Technology Officer Presentation: bit.ly/biobaseddsm Find DSM on: Twitter.com/DSM Facebook.com/DSMcompany Linkedin.com/company/DSM Page European Forum for Industrial Biotechnology,

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