Trends in Biobased Chemicals

Transcription

1 Trends in Biobased Chemicals Patrick B. Smith Michigan Molecular Institute

2 Significant Value in Chemicals Segment value-added: $135 billion value -added: $385 billion value-added: $375 billion rail transport other transport equipment air transport truck transport plastic rubber products non-transportation energy and products motor vehicles chemical products 70.6% 26% 3.4% US Petroleum Consumption (300 billion gal/yr) Adapted From: J. Frost, Industrial Biotechnology, Spring 2005, 1, 23-25; New Scientist,

3 Petrochemical Business Trends Abundant US natural gas fracking US crude oil from tight oil formations 1 Horizontal drilling technology (fracking) US projected to be net oil exporter within decade US petrochemical manufacturing growth 2 Implications for biobased chemicals in US Abundant fossil fuels Awareness of oil price projections Cost/performance drivers Wise choices 1) Cohen, M., J. Int. Energy Agency, 2012, 3, ) C&EN, April 28, 2013,

4 Environmental Responsibility is a Major Trend With Leading Brands Increasing Social Pressures Environmental Concerns Demand for Corporate Change Rising Cost of Fuel Changing Regulations 4

5 Biobased Polymer Volume Still Small Bioplastics represent <1% of the plastics market. Growth rate projected to be 13%/yr. 2 nd generation materials - small segment of biobased materials Shen, L., Haufe, J., Patel, M., P., Product Overview and Market Projection of Emerging Biobased Plastics, PRO-BIP, 2009, Utrecht University, The Netherlands. 5

6 Market Acceptance Exact Replacements Equivalent in Application New Products Bio-polyethylene Cost and quality Biosource - tie-breaker DuPont Sorona TM Existing application Customer validation NatureWorks TM PLA Significant improvement in cost/performance required Customer driven Increasing Risk 6

7 The Case for Renewable Incumbents The market is already developed (much more difficult than science and technology) Downstream conversion technology is understood Fits integrated manufacturing structure Business infrastructure already established Competes based on quality and cost to manufacture alone 7

8 Case Studies New Materials PLA Cargill and Dow invested over $1 billion Dow divested in 2005 due to negative cash flow NatureWorks has only recently had positive cash flow - when will it recoup the >$1 billion investment? PHAs Interesting properties and economics at scale High risks financial and market acceptance Several commercial disappointments Succinic acid/pbs Showa developed market with petro-pbs Reasonable economics, interesting properties Niche applications only today but growing 8

9 Business Risks C&EN, January 30, 2012,

10 Other Incumbent Chemicals glycerol ethylene terephthalic acid ethylene glycol propylene glycol acrylic acid, esters glycerol carbonate butadiene isoprene butanediol epichlorohydrin bio-syngas (BTX) 10

11 Challenges Large financial risk (>$1 billion) Competing against depreciated petro-assets Timing is critical (feedstock costs, competition, government policies) Capacity Growth Little capacity growth in US/Western Europe Growth in emerging economies (China, India, Brazil,...) Regional strategies Middle East Competition Very inexpensive feedstocks Production near feedstock source and ship Changing landscape due to domestic natural gas and oil 11

12 Emerging Trends Commercializing new commodity materials is tenuous Large financial risk, market complexities, questionable long term payoffs Better prospects for renewable incumbent products Competes on quality and cost to manufacture alone Cost/Performance is the only significant metric Low cost feedstocks (ag and other wastes, sugar, starch, biofuels) Low cost processes (most often chemical processes) High value applications Incumbent commodity plastics can be produced renewably Competitive economics for some materials/geographies Biobased plastics <1% of total plastics market high growth rate (13%/yr) Will create opportunities for domestic jobs and manufacturing 12

13 MMI MICHIGAN MOLECULAR INSTITUTE Questions? MATERIALS SCIENCE THAT MAKES SENSE 13