Organic feedstocks are essential in decarbonising the chemicals sector. We identify key trends and opportunities for a biobased transition in this key industry.
Accenture and NexantECA, an energy and chemicals advisory company, estimate that the chemicals industry needs to cut annual GHG emissions by 186 million tons in total over the next thirty years to reach net zero by 2050. While most chemical companies have focused on their clean energy strategy, decarbonising the sector will have to do more than simply switching plants to renewable power. To meet reduction targets, the sector must also increase their use of renewable bio-based feedstocks. This is because while the chemical sector is the largest industrial consumer of fossil energy, producing around 7 percent of total global carbon emissions annually, only half the sector’s emissions are released at chemical manufacturing sites. The rest is embedded in their supply chain, where 99 percent of the raw materials that fuel chemical production are still made from oil and natural gas. What will it take to make the bio-feedstock transition?
Stepping up supply
The centre of the biobased chemicals transition is Europe, where we see the most successful public-private initiatives for R&D and scaling. The European Commission’s European Green Deal and the Bio-Based Industries Joint Undertaking (BBIJU) private-public partnership represents the biggest stride towards a fully developed biobased chemicals supply chain. One flagship project is BIOSKOH, a 55 kilotonne capacity biorefinery in Slovakia that produces cellulosic bioethanol for biofuel from agricultural residues. Its total budget between 2014 to 2024 was €3.7 billion. In May 2021, it made a final call for biobased projects and will release the remainder of its budget this year. The $2 billion new Circular Biobased Europe Join Undertaking will then replace the organisation.
In the US, the biochemicals industry remains small but its total added value to the economy already amounted to $23 billion in 2017. A 2015 study estimated that current levels of bio-based products are displacing around 300 million gallons of petroleum per year. Although public-private initiatives are thinner on the ground than in Europe, the BioPreferred programme is an exception. This project, established in 2002 by the US Department of Agriculture, is pushing for consumer visibility of bio-based products through a certification and labelling scheme. It also campaigns for Federal procurement of biobased products. Another boost for the US biochemicals industry is now on the horizon in the form of the Renewable Chemicals Act bill, currently under review in Congress. If passed, it would give tax credits and other benefits to biobased chemicals producers.
Many rising biobased chemicals companies are based in the US. Genomatica has managed to produce a bio-based 1,4-butanediol (BDO), used to make polyurethanes, engineering resin PBT, spandex intermediate PTMEG, NMP solvent, and polyvinyl pyrrolidone (PVP) for personal care and pharmaceutical products. The company has now licensed their bio-based manufacturing technique to global giant Cargill, who are currently constructing a new biobased-BDO plant in Iowa with a 100, 000 ton per year production capacity. Novvi LLC, a joint venture between Amyris, Cosan, American Refining Group, H&R and Chevron, began producing fully renewable oils for the lubricants, polymer, adhesives, and personal care industries at its Texas Plant in 2020. In July 2021, it entered a European distribution partnership, making its products available on the continent through Brenntag Lubricants EMEA.
The chemicals companies making the switch
For low-volume, emerging technologies such as bio-based chemicals, suppliers must fine-tune their products to meet the demands of existing corporate sustainability targets. Already, large consumer brands are crying out for biobased chemical solutions: Nestlé has committed up to $2 billion to develop food-grade recycled plastics and sustainable plastic technologies, including 100% bioPET, while Carmaker Peugeot Citroën SA has pledged to make 20% of its plastics renewables-based. Toyota has committed to buying 25% of the bioPE output from Braskem’s Brazilian plant despite a 30–50% price markup compared with fossil-based versions.
At the supply end, some major oil-based chemical producers have announced bold bio-based ambitions. Croda International Plc is one of them. The global company supplies customers in the adhesives, crop additives, seed enhancement, animal health chemicals, lubricants, coatings, polymers, vehicle cleaners, additives, and plastics sectors. It has already committed to a Science Based Targets Initiative-approved strategy for a a 1.5 degree warming target and has integrated biobased products into their goals.
Croda Plc’s total bio-based raw material content was 67 percent in 2020, up 4 percent on 2019. Much of the rise was thanks to their new North American biosurfactant plant, which began operating in 2020 . The plat manufactured surfactant ingredients for Croda’s cosmetics, hair products and supplies customers in home care and personal care.
In December 2021, Croda sold the plant for £778 million to Cargill, which has lately shown strong interest in the renewables space. The company states that while Cargill’s acquisition will reduce Croda’s total bio-based organic raw materials from 69 to around 52 percent, they remain committed to a bio-based target of 75 percent by 2030.
Other chemicals companies with near term (5-10 year) action plans for limiting global warming to 1.5 degrees are: Wacker Chemie AG (Ger), Plastigaur (Spain), Novozymes (Denmark), Nippon Shokubai Europe (Belg), Matsen Chemie AG, Makrochem S.A. Poland, Kiso A/S Denmark, Hempel A/s (Denmark), Gebr. Dürrbeck Kunststoffe GmbH (Germany), Beck & Jørgensen A/S (Denmark), AkzoNobel (Netherlands Europe), EcoLab (US), Kiso (Denmark), Perstorp Holding AB (Sweden), and Polygenta Technologies Ltd.
These companies differ in the degree to which they emphasise biobased materials in their decarbonisation strategies, as well as the progress they have already made in switching to renewable feedstocks. One company forging ahead with both has been Wacker Chemie AG, which operates in the biopharma, life science chemicals, and bioingredients segments. As part of its 2045 net zero commitments, it has been building up a line of biobased commercial products. In 2019, it released its VINNECO polymeric binder, a binder for construction applications made from biobased acetic acid. In 2020 it followed up with its ELASTOSIL Eco scillicone sealant range, which uses biobased methanol made from REDcert-certified sustainable sources. Wacker Chemie also uses bioethanol in their BELSIL® eco range, which offer silicone for cosmetics and personal care products.
Nippon Shokubai Europe is another major chemicals company that have built bio-feedstocks into their business planning. The company has explicitly stated that biobased raw materials are part of its long-term carbon neutrality programme. Its major achievement so far has been to develop biobased SAP, a material used in disposable diapers. Their product uses acrylic acid that is made from biomass-derived propylene. In August 2021, Nippon Shokubai announced an R&D programme in their new Green Innovation Department to improve the environmental impacts of their bio-SAP by making it recyclable and biodegradable.
Cross-industry collaborations between established companies will also be critical to scaling plant-based chemical alternatives. Nippon Shokubai Japan has announced a joint feasibility study with ENEOS Corporation and Mitsubishi on manufacturing ethylene made from biomass, due to commence in 2024. ENEOS manufactures oil-based ethylene and supplies the chemical to Nippon Shokubai, which uses it for cosmetics products and plastics. These types of cross-industry collaborations are useful because they leverage expertise from different parts of the sector
Larger players must also collaborate with specialised startups. One example of such a partnership was the one announced February 2022 between the Corda brand Incotec and Xampla. Xampla is a University of Cambridge spinoff that makes single-use plastics packaging alternatives from plant proteins. Together, the companies will produce a biodegradable material for seed coating, a device used by farmers to protect plants during germination. Seed coatings today are mostly made from petroleum-derived polymers that are not fully degradable, contributing to microplastic soil pollution. They intend to develop products that would comply with an anticipated European microplastics ban, due 2027.
Environmental risk assessments for biochemicals
The critical pieces are in place for biobased feedstocks to capture a larger portion of the chemicals industry but there is still a long road ahead to decarbonisation. The USDA estimates that only four percent of US-produced chemicals are made from bio resources. In the EU, the figure is three percent.
Further investments in scaled bio-based production is key. However, it is only component of the renewable feedstock transition. The chemical industry must over overhaul their plant infrastructure and networks, for example, by relocating plant sites closer to renewable biomass sources. These alterations could cost the industry at least $1 trillion. Even though the EU has the most generous public-private biochemicals initiatives in the world, the industry still faces an estimated green funding gap of $12 billion per year over the next three decades.
Aside from this, bio-feedstocks themselves come with environmental risks. Total global chemical production today is between 1400 and 1750 mega tonnes, around 300 megatonnes of which could in theory become bio-based. European demand for biochemicals alone could reach 65 megatonnes. Given the massive volume of biomass that would be involved in rehauling the chemicals industry, there has been hated debate over how much could be used without competing with food production and biodiversity. The net environmental impacts of the biofuel industry in particular are of most concern.
Mitigating the environmental risks of bio-feedstock will depend on companies pursuing renewable energy solutions alongside a switch to renewable feedstocks. Another route is finding chemically valuable but non-nutritive by-products from agriculture and forestry. These would offer cheap, widely available, and sustainable feedstock options. Lignocellulose, a carb found in non-edible parts of many plants, is one possibility.
There is also an urgent need for accounting frameworks to assess the carbon and environmental impacts of bio-based chemicals. In 2013, the OECD published national frameworks for assessing biobased sustainability. Already, companies like Croda are measuring the land use change associated with their feedstock. By 2030, it aims to be ‘land positive’, meaning their products will save more land than is used to grow their feedstocks. Similar initiatives must be adopted industry-wide if biochemicals are to gain the credibility they deserve.