ChainCraft is a Dutch biotech company that develops and exploits proprietary fermentation processes to produce biochemicals from organic waste, providing sustainable chemicals to improve our daily lives.
Co-founded by Niels van Stralen, ChainCraft supports the transition away from petrochemical compounds and replaces a variety of products with bio-based chemicals made from food waste.
What they envision is an industry in which all chemistry is circular.
Here, World Bio Market Insights Head of Community, Paul MacDonald, catches up with Niels van Stralen, CEO of ChainCraft
Paul MacDonald (PM): Welcome to 5 Minutes With… What do you mean when you use the phrase circular chemistry?
An industry in which all chemistry is circular, that’s our vision. We strongly believe that in several decades from now, the majority of chemicals will be produced via biotechnological routes from non-food biomass and will consequently have a significantly lower carbon footprint than fossil or palm oil derived chemicals. We are then truly producing chemicals in a sustainable and circular way. ChainCraft is already doing this on a small commercial scale: we convert food waste into high value fatty acids via our innovative fermentation technology. In this way we enable a circular alternative for chemicals currently derived from fossil and palm oil. ChainCraft is already turning chemistry circular.
Give me an overview of your journey from start up to where you are today including the key commercial milestones?
We started in 2010 as a spin-off from Wageningen University with the acquisition of the patent which protects our technological concept. By 2012 we realized full proof of concept on lab-scale with an attractive business case. This early success allowed us to close a first investment round in 2013 with Horizon 3 and SHIFT Invest as VC investors. Since then we upscaled our process with a factor 500 to pilot scale and by 2016 we concluded this phase with the realization of an offtake agreement for a significant part of the output from our yet-to-be-build demo plant. The funding for this demo plant (a factor 500 larger than the pilot plant) was realized in 2017 with AKEF, PDENH and Port of Amsterdam as financiers. We finalized construction in 2019 and started commercial production in 2020. We have been able to produce large quantities of fatty acids with ongoing and recurring sales in the animal nutrition space. Now the time has come to further scale up to a full scale factory. To be able to reach final investment for this factory we closed another funding round in the summer of 2022 with the existing investors plus Convent Capital joining as new investor. Today we have LOI’s in place with several major chemical and animal nutrition players setting us up to close offtake agreements later this year for the majority of the output of the 20kt per annum plant. With a major agrifood company we signed an LOI for the conversion of their low grade organic residues, our feedstock, into MCFA at their premises via a co-siting construction.
Talk me through the technology process that converts food waste into green chemicals?
Building on principles of nature, ChainCraft has developed a platform technology to produce bio-based and circular fatty acids for the agri/food/feed, and chemical & materials industries.
Our unique proprietary fermentation technology process robustly converts organic residues into short chain fatty acids, via a process which is comparable to anaerobic digestion. In a second fermentation these short chain acids are elongated to medium-chain fatty acids, predominantly C6 and C4. In the future will be able to produce more odd chain and C8 acids.
We can process a wide variety of low value food waste streams from all over the food value chain into circular MCFA. These acids can subsequently be used in a wide variety of products across many industries.
You serve a number of industries with your products. Which industry did you start with and why? What is the biggest industry you supply and which one has the greatest potential?
The animal nutrition industry is where we started. With relatively low barriers to entry, good volume potential and decent prices for feed additives this was a good market to enter. From our small-scale commercial plant in Amsterdam we are supplying leading feed additive players, with a focus on Europe.
For now and the years to come our business development and sales activities are shifting towards other markets as well. We experience strong pull for our solution from the home & personal care, industrial chemicals and food, flavor & fragrance markets. For the high value lower volume applications we have a drop-in solution for the flavor & fragrance houses and are developing interesting food additives applications. In the chemicals & materials space we are tapping into existing applications and are developing applications in the lubricants, plasticizers and solvents markets, all with leading partners in their field.
With suppliers in the home & personal care market we are developing circular surfactants with million tonnes per annum volume potential for which there is a strong pull from the large brand owners and FMCG companies.
Why does the chemical industry need your products?
The main driver for the chemical industry to buy our products is the sustainable impact it realizes compared to chemicals from palm or fossil oil. With a carbon footprint reduction of up to 80% we realize major positive impact.
For many of the markets we serve our fatty acids are a drop-in replacement, where performance is equal.
Besides having a drop-in solution, we unlock very interesting new applications, especially for our more scarce C6 fatty acid (caproic or hexanoic acid). Caproic acid can be used as a precursor for various derivatives which can replace palm or fossil based chemicals.
Once having a more sustainable and equally performing product, the main resulting decisive factor is pricing. Starting with low cost organic residues as feedstock and working with mild processing conditions we are able to offer our fatty acids at a competitive price level. Our feedstock market shows significantly less volatility than palm or fossil oil. Furthermore, we can produce our fatty acids locally, without being dependent on mainly Malaysia or Indonesia for palm oil or instable oil producing regions, resulting in a more secure and less volatile supply chain.
What one thing does the bio community need in order to accelerate its scale and adoption?
The bio-economy would benefit from more market pull, which incentivises or obliges large dominant players in the value chain to adopt circular chemicals at a more rapid pace. This can be driven by consumer demand, for example more and more consumers are deliberately make a choice to not use products in which contain palm oil derivatives. Furthermore, more push can be generated by pressure from environmental organisations who influence large corporations and policy makers. And the one thing that also has proven to have a positive impact on adaptation of biobased products is change in legislation, which stimulates or obliges the use of the more sustainable and circular alternatives. We have seen this in the EU mainly for the blend-in of biofuels. The US currently showed it is leading the way with the Biden Administration unveiling bold new goals for biotechnology and biomanufacturing.
But the best way forward, and my personal favourite, is that companies intrinsically want to do the right thing and choose circular alternatives over incumbent ones. That requires clear vision and strong leadership.
For more information please visit chaincraft.com or contact Niel van Stralen at firstname.lastname@example.org or +31 (0)20 261 56 45