Market Development of Environmental Friendly Kaneka Biopolymer AONILEX

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World Congress on Industrial Biotechnology Market Development of Environmental Friendly Kaneka Biopolymer AONILEX April 18 th, 2016 Ken-ichiro NISHIZA KANEKA CORPORATION 1

Contents 1. KANEKA Company Profile 2. AONILEX General Information 3. Technologies for AONILEX Production 4. Key Properties of AONILEX 5. Examples for Processing and Applications 6. Future Approach 2

Contents 1. KANEKA Company Profile 2. AONILEX General Information 3. Technologies for AONILEX Production 4. Key Properties of AONILEX 5. Examples for Processing and Applications 6. Future Approach 3

Corporate Information Company Name KANEKA CORPORATION Date of establishment September 1, 1949 Paid-in Capital 33,046 million yen (ca. 254 million ) Net Sales 552,189 million yen (ca. 4,244 million ) Number of employees 8,529 Line of business Chemicals, Functional Plastics, Formed Plastics and Products, Food Products, Life Science Products, Electronic Products, Synthetic Fibers, etc Head Office Osaka and Tokyo Domestic Facilities Office: Nagoya Plant: Takasago (Hyogo), Osaka, Global Facilities Shiga, Kashima (Ibaraki) U.S.A. / Belgium / Singapore / Malaysia / Australia / China / India etc... (as of 31/Mar./2015) 4

Global Network 5

Business Fields & Products Lineup Chemicals Caustic Soda Kanevinyl TM PVC & PVC Paste Kaneka TM CPVC PVC-VAc Copolymers Cross linked PVC Functional Plastics Kane Ace TM Impact MOD MS Polymer TM Liquid Polymer Hyperite TM Modified PET Sunduren TM SIBSTAR TM 6

Business Fields & Products Lineup Expanded Plastics and Products Eperan-PP TM Eperan TM (PE) Kanepearl TM (PSt) Kanepearl TM Soil Block Kanelite Foam TM (PSt) Electronics Products Apical TM PI film Graphinity TM Grapphite film Elmech TM for Optics Kaneka Flux TM Solar Cell 7

Business Fields & Products Lineup Foodstuffs Products Kaneka TM Margarine Shortening Kaneka TM Yeast LACHENTE, FRANJE Belco Spices Life Science Products Plasmapheresis System Intervention catheters Pharmaceutical Intermediates Kaneka Q10 TM Kaneka QH TM Kaneka Glavonoid TM 8

Business Fields & Products Lineup Synthetic Fibers Kanekalon TM Kanecaron Protex TM Ion Adsorbent & Collagen Fiber Kanecaron TM New Business Development AONILEX Bio-polymer ILLUMIKA TM Heat resistant material for optical device OLED Lighting Devices Genetic Diagnostic Products 9

Elemental Technologies of AONILEX Oil Processing Technology Biotechnology Margarine Shortening Yeast Kaneka Q10 TM Kaneka QH TM Polymer Processing technology AONILEX Bio-polymer Eperan-PP TM Hyperite TM Modified PET Kane Ace TM Impact MOD 10

Contents 1. KANEKA Company Profile 2. AONILEX General Information 3. Technologies for AONILEX Production 4. Key Properties of AONILEX 5. Examples for Processing and Applications 6. Future Approach 11

Classification of AONILEX Biodegradability Biodegradable Non-Biodegradable Material Biobased PLA PHA (PHB, PHBV, PHBH, etc.) Starch etc. Bio-PE Bio-PA Bio-PC etc. Fossilbased PBS PBAT etc. PE PVC PC ABS etc. 12

Chemical Structure of AONILEX Copolymer of 3-hydroxybutyrate and 3-hydroxyhexanoate Average Mw : 500,000-600,000 Composition ratio of rigid grade: 3HB/3HH = 94/6, (X131A) Composition ratio of semi-rigid grade: 3HB/3HH= 89/11,(X151A) 13

Life Cycle of AONILEX AONILEX is produced by microorganisms in a specified fermentation condition using plant oils as the carbon source. 14

Biobased Carbon Content of AONILEX Biobased Carbon Content 100% biobased. Certification OK biobased (biobased > 80%) 15

Contents 1. KANEKA Company Profile 2. AONILEX General Information 3. Technologies for AONILEX Production 4. Key Properties of AONILEX 5. Examples for Processing and Applications 6. Future Approach 16

Scheme of AONILEX Production Process Raw material: Palm oil Downstream Process Polymer separation & Dry up Granulation Sub raw materials: Micro-organism Nitrogen source Minerals, etc Fermentation AONILEX 17

AONILEX Polymer Accumulation during the culture Culture Time 18

AONILEX Production in Hyogo, Japan 2011: Start production (capacity 1,000 MT/year) Pilot plant 19

Contents 1. KANEKA Company Profile 2. AONILEX General Information 3. Technologies for AONILEX Production 4. Key Properties of AONILEX 5. Examples for Processing and Applications 6. Future Approach 20

Biodegradability (Aerobic) Aerobic condition : with air (on a ground, in shallows of ground) 21

Biodegradability (Anaerobic) Anaerobic condition : without air (underwater, in the depths of ground) AONILEX has good biodegradability under both aerobic and anaerobic conditions. 22

Biodegradation Behavior in Soil thickness=100 μm Weeks Start 19 44 92 109 X131A Totally degraded X151A Totally degraded 23

Certifications for Biodegradation AONILEX has OK compost and OK compost HOME certifications. OK compost Less residual heavy metal Compostable under 58 o C No disturbance of plant growth OK compost HOME Less residual heavy metal Compostable under 28 o C No disturbance of plant growth http://www.okcompost.be/en/home/ 24

Sea Water Disintegration of AONILEX (OWS) (in accordance with ASTM D7081, tested by OWS) One month later Initial film size (2cm x 2cm, thickness 50 µm) Two months later 2mm Nothing left on the sieve 25

Sea Water Disintegration of AONILEX (KANEKA) Sample : 15 µm thickness Condition : 23 C, aerobic Sea water : from Takasago bay, Japan Test sample (AONILEX film) After 5 days AONILEX film disintegrates in sea water. 26

Biodegradation in Sea Water (Biological oxygen demand) Sample : 100 µm thickness Condition: 27 C, aerobic Sea water: from Osaka bay, Japan C 4 H 6 O 2 + 4.5 O 2 4 CO 2 + 3 H 2 O CO 2 absorber Ca(OH) 2 Sea water Film & stirrer AONILEX and PCL biodegrade in sea water. PBSA biodegrades according to circumstances. 27

Sea Water Disintegration of Biopolymers Thickness : 4mm Surface 6months later ( 100) PHBH (AONILEX ) PHBH/filler PLA AONILEX plate disintegrates. Condition:23 Addition of filler accelerates disintegration. PBS 28

Hydrolysis Stability AONILEX is one of the highest hydrolysis stability in the biodegradable polymers. 29

General Characteristics of AONILEX T-die Sheet (100 µm) Item Test Unit X131A X151A PBAT PLA LDPE Density Tensile strength Tensile elongation Tensile modulus Tear strength Haze Moisture Vapor Transmission Rate * Oxygen permeability ASTM D792 ASTM D882 ASTM D882 ASTM D882 ASTM D1004 ASTM D1003 JIS Z0208 JIS K7126-1.20 1.19 1.23 1.26 0.92 MPa 28 25 38 52 26 % 26 331 453 5 700 MPa 1240 665 55 1700 234 N/mm 77 75 102 100 113-40 27 34 1 12 g/m 2 24hrs 80-120 - 300 9 cm 3 mm/m 2 day atm 5-10 - 20 200 * Thickness : 60 μm 30

AONILEX Sheet Appearance AONILEX sheet is put on a paper which is written Kaneka. AONILEX sheet is CONTACT CLEAR. Good for Food Packaging 31

General Characteristics of AONILEX Injection mould Item Test Unit X131A X151A PBAT PLA LDPE Tensile strength Tensile elongation Flexural strength Flexural modulus Izod strength (s-v notch) DTUL (0.46MPa) Vicat (10N) ASTM D638 ASTM D638 ASTM D790 ASTM D790 ASTM D256 ASTM D648 ASTM D1525 MPa 24 19 15 73 16 % 18 31 242 4 116 MPa 39 26 5 69 7 MPa 1530 900 83 3460 150 J/m 33 39 390 25 414 100 87 52 55 106 117 104 <25 60 98 Melting point DSC 142 136 115 166 110 Glass transition temperature DSC 2 0-30 60 <-70 32

Heat Resistance of AONILEX AONILEX is applicable high heat resistance required application. 33

Contents 1. KANEKA Company Profile 2. AONILEX General Information 3. Technologies for AONILEX Production 4. Key Properties of AONILEX 5. Examples for Processing and Applications 6. Future Approach 34

Mulch Film Fukui, JAPAN 35

Characteristics of AONILEX Mulch Film Formulation : AONILEX, other biodegradable resins, additives AONILEX Film formulation A AONILEX Film formulation B Commercial product (Reference) Thickness 20μ 20μ 20μ Tensile Elongation (%) Tear Strength (mn) Biodegradability 439 284 254 209 724 276 Almost same as commercial product Tensile elongation: JIS K7113, TS=100mm/min Angle tear strength: JIS K7128, 200m/min 36

Field Test of AONILEX Mulch Film (Laying) Osaka, JAPAN AONILEX mulch film can be applied to farm field by conventional mulcher. 37

Field Test of AONILEX Mulch Film (Cultivation) Farm products 1~2 months 3 months 5 months Sweet potato Egg plant Taro Farm products grow well. 38

Field Test of AONILEX Mulch Film (Tilling) Hyogo, JAPAN AONILEX mulch films can be tilled by conventional tiller. Films break to pieces and go underground. 39

Anaerobic Digestible Waste Bag Anaerobic Digestible waste bag tested Demonstration experiment of AONILEX waste bags in Nantan-city, Kyoto. Campo Recycle Plaza Co., LTD. Organic Wastes with bags Anaerobic Digester Methane (Energy Recovery) 40

Marine Pollution by Plastics On the shore Ghost fishing Hawaii Caribbean S. G. Gall et al., Marine Pollution Bulletin, 2015 41

Weight of Plastics in the World s Oceans (U:g/km 2 ) Plastic pieces over 250,000 tons float in the sea. Eriksen at el., PLOS ONE, December 10 2014 42

UNEP Report BIODEGRADABLE PLASTICS & MARINE LITTER, UNEP (2015) Plastics are DURABLE. Fragmentation is occurred mainly by UV radiation Problem is poor waste management, littering, etc Biodegradable plastics do not biodegrade in marine. 43

Pollution caused by Plastic Microbeads Non-biodegradable Microbeads Microbeads Facial Scrub Cosmetics Municipal wastewater plant For example: more than 450,000 beads per sq. km in Lake Erie. Microbeads accumulate in a sea, lake and river, and break ecosystems. PHA could be a solution of microbeads inside applications. 44

Recovery of Seaweeds field with AONILEX Fixed on a rock Project was performed together with Shizuoka Prefecture, Fishery Development Division and Suzuyo Shoji Co., Ltd. Nursery seaweeds were bound on AONILEX plate. 19/Feb/2014 26/Aug/2014 27/Oct/2014 Seaweeds on AONILEX plates grew up well and roots spread on rocks. AONILEX plates were BIO-degrade and disappear. 45

Contents 1. KANEKA Company Profile 2. AONILEX General Information 3. Technologies for AONILEX Production 4. Key Properties of AONILEX 5. Examples for Processing and Applications 6. Future Approach 46

Future Approach Market Development: Marine biodegradable, environmental friendly, Raw materials: sustainable Processing R&D: Not competing food chain Price Competitive 2 nd Generation Production technology: More sophisticated Less energy consumption More than 10,000 MT/y Compound design Higher performance User friendly 47

Future Approach of our Market Development Contribute to Sustainable Life & Environmental Preservation. Create more Environmentally Friendly Applications. Soil BIO-degradable agriculture applications Marine BIO-degradable applications Waste management system (garbage bag) Home Compostable applications 48

Thank you for your attention! 49

New Business Fields & Products Bio-based & biodegradable polymer KANEKA biopolymer AONILEX Application examples 50

Meaning of Brand Name AONILEX AONI: Japanese traditional green & grayish blue color Image: Gentle to the earth( 蒼 ) and to the nature( 碧 ) LEX: Image: High functional products 51

Residual Heavy Metal Analysis of AONILEX (Measured by OWS) Metal AONILEX Limit values X131A X151A Europe USA* Canada EN 13432 (2000) ASTM D 6400-04 BNQ P 9011-911-5 Zn 5 5 < 150 < 1400 < 463 Cu 1 < 1 < 50 < 750 < 189 Ni < 1 5 < 25 < 210 < 45 Cd 0.2 < 0.1 < 0.5 < 19.5 < 5 Pb < 1 < 1 < 50 < 150 < 125 Hg < 0.1 < 0.1 < 0.5 < 8.5 < 1 Cr 2 6 < 50 - < 265 Mo 0.3 0.3 < 1 - < 5 Se 0.6 0.6 < 0.75 < 50 < 4 As < 1 < 1 < 5 < 20.5 < 19 F 10 < 10 < 100 - - Co < 1 < 1 - - < 38 Heavy metal content of AONILEX is much lower than limit values in Europe and north America. 52

Biodegradation Behavior in Soil (1) thickness=1 mm Weeks Start 26 64 172 X131A Still under test X151A Still under test 53

Biodegradation Behavior in Soil (2) Blown bottle thickness=600 μm Weeks Start 21 70 153 172 X151A If you do NOT put the blown-bottle or films in soil or in compost facility, they will keep in their original shape and color. 54

Optical Data of AONILEX Haze Transmittance 80 100 HAZE (%) 60 40 20 0 PHBH AONILEX (3HH: X151A 11mol%) PHBH AONILEX (3HH: X131A 7mol%) 0 50 100 150 200 250 300 350 Transmittance (%) 80 60 40 20 0 PHBH AONILEX (3HH: 11mol%) X151A PHBH AONILEX (3HH: 7mol%) X131A 0 50 100 150 200 250 300 350 Sheet Thickness (μm) Sheet Thickness (μm) AONILEX sheet has hazy but high transmittance, looks like frosted glass. 55

Production of AONILEX, Blown Film Extrusion Pinch roll 2F Film 1F Cooling Equipment Die GF Extruder 56

Movements against Plastic Microbeads Environmental Organization 5 Gyres Took a survey on Great Lake and found accumulation of microbeads (2012) North Sea Foundation, Plastic Soup Foundation BEAT THE MICROBEAD campaign (2012) Legal Controls for prohibition of plastic microbeads Illinois California, United States House of Representatives Non-biodegradable plastic microbeads are prohibited (2014) Plastic microbeads, include biodegradable plastics, are prohibited (2015) 57

Example of AONILEX applications Eraser Trimmer line Packages 58