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The changing face of the planet

The role of Bio-based Plasticson global land use change

Dr Adrian HigsonJune 2012

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Company VisionWe view bio-based technologies as key components of the low carbon economy delivering economic, social and environmental benefits.

We believe the bioeconomy will create sustainable business opportunities for feedstock suppliers, technology and project developers, manufacturers and investors.

A specialist bio-based economy consultancy based in York, UK.

Company MissionTo provide clients with a holistic view of feedstock, technology, policy and market development across the bioeconomy, enabling them to make informed business decisions and develop sustainable business strategies.

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economy

bio-economy

bio-based economy

The aggregate set of economic operations in a society that use the latent value incumbent in biological products and processes to capture new growth and welfare benefits for citizens and nations. (OECD)

Activity associated with the use of biological products (plants, animals, micro-organisms) to produce energy and materials

Activity associated with the use of biomass to produce energy

and materials

Terminology

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Global carbon-dioxide (CO2) emissions from fossil-fuel combustion reached a record high of 31.6 gigatonnes (Gt) in 2011 – IEA preliminary estimates

Europe is on track to spend over USD500 billion on oil imports this year, which is well in excess of the Greek government’s USD370 billion debt - IEA

Why the interest?

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Bio Chemicals and Bio-Based Polymers (all areas of economy)

Market size~ 50 million tones

1%

7%1%

20%

54%

5%7%

4%1%

Chemical Derivatives Naval Stores Natural Products

Oleochemicals Biopolymers Amino Acids

Alcohols Aliphatic acids Other

Fermentation Products

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ADM

Amyris/Michelin

Anellotech

BioAmber

Biocaldol

BioMCN

Braskem

Butamax

Cathay Industrial Biotech

Colbolt TechnologiesDSM

DOWDraths

DuPont

Eastman Chemicals

Global Biochem

Global Bioenergies

Glycos Biotechnologies

Green Biologics

Greencol Taiwan Corporation

GenomaticaGevo

Goodyear/Genencor

India Glycols

Metabolic Explorer

Myriant

Natureworks

NovephaPurac

Rennovia

Reverdia (DSM/Roquette)

SolvayTMO

OPX Bio

Verdezyne

VinythaiVirent

Zeachem

Methanol

Formic Acid

Ethanol

Ethylene

Ethylene Oxide

Ethylene Glycol (MEG)

Acetic Acid

Ethyl acetate

Epichlorohydrin

Acetone

isoPropanol

Propylene

Propylene Glycol

1,3-Propanediol

Lactic acid

Acrylic Acid

n-Butanol

iso-Butanol

iso-Butylene

Butadiene

Succinic acid

2,3-Butanediol

1,4-Butanediol

Tetrahydrofuran

Isoprene

Adipic acid

HMDA

Benzene

Toluene

Paraxylene

Terephthalic acid

Styrene

Market expansion and development activity

Currently over 30 companies actively commercialising over 50 bulk chemicals

Companies working on bio-based chemicals

Bio-

base

d ch

emic

als

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Market building - European Lead Market Initiative

• Standards, labels and certification

• Legislation promoting market

development

• Product specific legislation

• Legislation related to biomass

• Encourage Green Public Procurement

• Financing and funding of research

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Ethylene Polyethylenes

Styrene Monomer

Ethylene Oxide/Glycol

EDC

Other

Polymers/Rubbers

Polyester

PVC

Alpha Olefins

PVA

Ethanol60%

7%

14%

12%

7%

Bio-based chemical platforms

Ethanol production ~ 70 million tonnes

Ethylene production ~ 110 million tonnes

PET Collaborative

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Succinic Acid 1,4-ButanediolPolybutylene

Terephthalate

Copolyester Ethers

Thermoplastic Polyurethanes

Spandex Fibres

Tetrahydrofuran

Solvent

Polytetramethylene Ether Glycol

g-Butyrolactone

Fine & Speciality Chemicals

N-Methyl -2-Pyrrolidone

Fine & Speciality Chemicals

2-Pyrrolidone

Fine & Speciality Chemicals

N-Vinyl-2-Pyrrolidone

Polyvinyl Pyrrolidone

Deicers/Coolent

Plasticisers

Fuel Additives

Bio-based chemical platforms

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Politically Driven

Consumer Pull

Raw Material

Technology Push

Right place, wrong time

Wrong place, right time

Right place, right time!

Why now?

Climate ChangeMandates/Support

Commodity differentiationPrice volatility

Industrial BiotechGreen chemistry

Brand owner focusEnvironmentFunctionality

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Comparative Feedstock Pricing

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Bio-based chemicals – Novel or drop in?

Strengths• Drop in – known targets and downstream products• Novel – exploits attributes of biomass or biological

processing

Weaknesses• Drop in – number of unit operations required• Novel – requirement for product development

Opportunities• Drop in - rapid route to market through existing

infrastructure and know how• Novel – provides new or improved functionality

Threats

• Drop in – production never achieves cost competitiveness

• Novel – immature supply chain and market awareness

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Bio-based chemical outlook

Strengths• Consumer preference• Reduced carbon footprints & fossil energy use• Novel / Improved function

Weaknesses• Low volume / High costs• Immature supply chain• Market confusion

Opportunities• Oil price volatility• Capture C3 and C4 markets• Co-development with fuel industry

Threats• Feedstock supply• Alternative feedstock (coal, gas)• Environmental pressure

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The value of biomass

Increasing value

Decreasing volume

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Biomass – A love hate relationship!

Strengths• Available on demand• Carbon source

Weaknesses• Cost• Physical nature

Opportunities• Energy generation (heat and power)• Liquid transport fuels• Chemicals and materials

Threats• Competition for land• Environmental pressure

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Source IEA Task 42, NNFCC

Opportunity, complexity, and confusion

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Client questions

• What’s the value proposition in bioplastics?– Function vs renewable content

• What does the environmental footprint look like?– greenhouse gas emissions, water impacts

• How big is the potential market opportunity/impact?– niche or mainstream– true rate of development

• What do the resource requirements look like?– Availability, price, impact on other markets

• How will technology develop?– Synthetic biology, biomass crops etc

Time horizons202020302050

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Do we have enough land to feed the planet and produce the low carbon energy, fuels and materials needed by a population expected to reach 9 billion

by 2050?

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Land availability and use

Global arable land could be doubled

However, what is the limit of sustainable expansion?

What are the environmental and societal implications of expansion and land use change?

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Chemical drivenPolitical support for biofuel wanes

Limited commercial biotech breakthroughsIndustry based on arable crops

BioeconomyPolitical support for bioeconomyBiotech breakthroughs expand to

chemicalsIndustry based on biomass & arable crops

Biofuels stalledCurrent political support for biofuel

remainsLimited commercial biotech breakthroughs

Industry based on arable crops

Biofuel drivenPolitical support for biofuel grows

Biotech breakthroughs limited to biofuelIndustry based on biomass crops

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How to view the future

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Biopolymer volume fixed as a % of overall market

Plastic market growth rates?

Which biopolymers will achieve a significant place in the market?

Production technology?

Production geography?

Feedstock preference?

Bio-based content of polymers?

Questions, variables and assumptions

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Future development Hurdles• Lignocellulose deconstruction• Fermentation scope and yields• Downstream processing

Game changers• Synthetic biology• Synthesis gas fermentation

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Biopolymer Scenarios - land requirements (2030)

All plas

tics

All pac

kagin

g

Realisti

c

05

101520253035404550

Chemical drivenBiofuel stalledBiofuel drivenBioeconomy

% o

f ava

ilabl

e la

nd

Polymer demand – 428 million tonnesLand availability – 250-800 million ha (Source FAO)

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Land requirements – the bigger picture

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Regional DevelopmentSustainable agriculture

Established agri supply chainsStrong technology baseLimited political support

Agricultural sustainability?Land availability?

Strong political supportAccess to growing markets

Sustainable agricultureEstablished agri supply chains

High residue availabilityStrong technology baseStrong political support

Established cultivation and processing

Available arable landHigh crop yields (sugar cane)

Good residue availability (bagasse)

Good access to growing markets

Large arable land potential

Limited access to skillsLimited access to markets

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12 Principles for sustainable biofuel production– Legality– Planning, Monitoring and Continuous Improvement– Greenhouse Gas Emissions– Human and Labour Rights– Rural and Social Development– Local Food Security– Conservation– Soil– Water– Air– Use of Technology, Inputs and Management of Wastes – Land Rights

Sustainability through project controlRound Table on Sustainable Biofuels

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Use our existing resources better by driving innovation

Migrate to non-food feedstock like wastes, agricultural residues, algae

and lignocellulosic crops

Push policies towards sectors with limited alternatives

Mitigation Strategies

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recycle

raw material

supply chain

products

end of life

cultivation

raw l

supply chain

fuel

combustion

raw material

Energy CycleMaterial Cycle

Maximising resource use

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The NNFCC provides high quality, industry leading consultancy

for more information contact us

Email - enquiries@nnfcc.co.uk

+44 (0) 1904 435182

Follow us on Twitter @NNFCC

• Future Market Analysis

• Feedstock Logistics Planning

• Sustainability Strategy

Development

• Technology evaluation & associated

due diligence

• Project feasibility assessment

• Policy and regulatory support