Bio-based Chemicals for the Automotive, Construction, and Building Markets

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1 Bio-based Chemicals for the Automotive, Construction, and Building Markets Julia Allen, Analyst Lux Research, Inc. BIO World Congress on Industrial Biotechnology May 13, 2014

About Lux Research Technology coverage Helps clients find new business opportunities from emerging technologies in physical and life sciences Offers ongoing technology and market intelligence, as

2 About Lux Research Technology coverage Helps clients find new business opportunities from emerging technologies in physical and life sciences Offers ongoing technology and market intelligence, as well as market data and consulting services Over 250 clients on six continents multinational corporations, investors, governments, and SMEs Global reach, with over 90 employees in Boston, New York, Amsterdam, Singapore, Shanghai, and Tokyo Combines deep technical expertise with business analysis to support strategic decisions Advanced Materials Agro Innovation Alternative Fuels Autonomous Systems 2.0 Bio-based Materials & Chemicals BioElectronics China Innovation Efficient Building Systems Energy Electronics Energy Storage Exploration and Production Food and Nutrition Printed, Flexible, and Organic Electronics Solar Sustainable Building Materials Water 2

3 Agenda State of the wider bio-based material and chemical industry Key trends relevant to agriculture based building block chemicals for the automotive, construction, and building markets Summary 3

4 Agenda State of the wider bio-based material and chemical industry Key trends relevant to agriculture based building block chemicals for the automotive, construction, and building markets Summary 4

5 Developing the landscape of current and future biobased material and chemical capacity Examined bio-based material and chemical production facilities, that were planned, operating, or shuttered between 2005 and 2017 all over the world 217 companies 229 sites in total For each facility, we documented the actual or planned nameplate capacity for the 2005 to 2017 period 5

6 Growth beyond first-generation products drives the industry towards a 13.2 million MT capacity in

7 Count of facilities Total capacity (thousand MT) Growth beyond first-generation products drives the industry towards a 13.2 million MT capacity in % CAGR ,000 12,000 10,000 26% CAGR ,000 6,000 4,000 2, Count of facilities Total capacity 7

8 Count of facilities Total capacity (thousand MT) Growth beyond first-generation products drives the industry towards a 13.2 million MT capacity in , ,000 10,000 8,000 14% CAGR ,000 4,000 2,000 15% CAGR Count of facilities Total capacity 8

9 Average facility size (MT/facility) As startups entered the space, average capacity dropped but it is rising again We are here Average facility size 9

10 Agenda State of the wider bio-based material and chemical industry Key trends relevant to agriculture based building block chemicals for the automotive, construction, and building markets Summary 10

11 Many companies have shifted focus from biofuels to bio-chemicals 11

12 Targeting high value, low volume markets 12

The bioproduct industry is moving past food

corn stover, woody biomass Waste feedstocks MSW,

existing supply chains today, easy to convert

low cost; sometimes collected/aggregated; doesn

sugars; high capital cost conversion; often left

compete with food or agriculture; available near

13 The bioproduct industry is moving past food feedstock and developing routes for new sources First generation feedstocks Corn, cane, vegetable oils Cellulosic materials Bagasse, corn stover, woody biomass Waste feedstocks MSW, CO 2, flue gas Pro: commercially available, existing supply chains today, easy to convert Con: competes with food; price volatility Pro: low cost; sometimes collected/aggregated; doesn t compete with food Con: difficult to release sugars; high capital cost conversion; often left in field Pro: negative cost today; doesn t compete with food or agriculture; available near fuel demand Con: heterogeneous; costs likely rising; impurities; difficult to convert 13

However, first-gen sugar/starch feedstocks are and will remain a dominant bio-based source Distribution of Bio-Based Material 10% and Chemical Capacity by Feedstock 2013

14 However, first-gen sugar/starch feedstocks are and will remain a dominant bio-based source Distribution of Bio-Based Material 10% and Chemical Capacity by Feedstock % million MT 10% 13.2 million MT 30% 10% 0.4% 10% 30% 11% 7% 31% 16% 8% 16% 14% 33% 33% 28% Sugar/starch Cellulosic Bio-oils Chemical intermediates Gas Other 14

15 Chemical giants are leaping to cheap, abundant natural gas 15

16 while delaying plans for bio-based polyolefins 16

17 Components of shale gas enable a wide assortment of derivatives 17

18 but shale gas and its derivatives can t do it all Shale gas can t make Aromatics and longer-chain molecules with more than four carbons, like isoprene Synthetic rubber High performance polymers Bio-lubricants and more complex molecules all out of reach of shale gas. 18

19 Scale and investment in bio-based chemicals very active the last year or so 19

20 Key bio-based intermediates are leading the transition to replacement materials Substitutes PLA, starch- based plastics Drop-in Replacements PE, PP, PET, solvents, polymers Improvements Spider silk, living materials Acrylic acid Butanol BDO Succinic acid Isoprene Terephthalic acid Adipic acid Furans PDO Butadiene 20

21 Cost metrics need to be hit in order to secure demand; there is no green premium A number of organizations and processes have struggled to compete with the costs of fossil-based routes These organizations are looking to next-gen technologies to compete on economics 21

22 Capacity growth by product classification 22

23 Summary Growth beyond first-generation products drives the industry towards a 13.2 million MT capacity in 2017 Companies scaling today are leveraging high value, low volume markets; first gen sugar/starch feedstocks; and competing with shale Drop-in replacement products are showing strong capacity growth through 2017; improvement products are an emerging segment of the industry 23

24 Thank you Julia Allen, Analyst Lux Research, Inc.

Trends in Technology and Applications

Trends in Technology and Applications Dr. Manfred Kircher Chairman CLIB 2021 January 13th, 2010 ECD Workshop on the utlook on Industrial Biotechnology Vienna State of the Art Emerging Trends Priorities