Report documents growth in renewable chemical industry
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, Sept. 15, 2016 - The renewable chemical industry may be small as a percentage of the overall chemical industry, but it's steadily growing and producing jobs from Massachusetts to California and lots of places in between.
Those are some of the findings in a new report released by the Biotechnology Innovation Organization (BIO), “Advancing the Biobased Economy: Renewable Chemical Biorefinery Commercialization, Progress, and Market Opportunities, 2016 and Beyond.” The report describes market conditions and provides an overview of both small and large companies producing renewable chemicals around the country.
Take Coca-Cola, for example. The report notes that “Coca-Cola introduced PlantBottle™ Technology in 2009 as the first recyclable PET plastic bottle made partially from plants. Since then, more than 40 billion PlantBottle™ packages have reached the market in over 40 countries, saving more than 845,000 barrels of oil. The company's goal is to adopt the PlantBottle™ packaging (which consists of 30 percent plant-based material) for all of its new PET plastic bottles in the future, compared to just 30 percent of its bottles now.
To achieve this objective, Coca-Cola partnered with other companies to expand technology and build manufacturing facilities around the world. In June 2012, Coca-Cola, Ford, Heinz, Nike and Procter & Gamble formed the Plant PET Technology Collaborative. Coca-Cola now has developed partnerships with the Ford Motor Company to use the PlantBottle™ technology for polyester car interiors, and SeaWorld® Parks & Entertainment to introduce a refillable souvenir cup made with PlantBottle Technology.
On a much smaller scale, there is Biobased Technologies, based in Rogers, Ark. The company, which employs 15 people, makes Agrol®, a line of USDA Certified Biobased polyols made from plant-based ingredients, including soy, cashew nuts and other products. Their brands can be used in a variety of products including lubricants, building products, diesel additives, furniture, automotive, adhesives, agricultural products, carpet backings, industrial coatings and printing inks.
“The biobased economy is alive and well; it is not just about biofuels development,” says Brent Erickson, executive vice president of BIO's Industrial & Environmental Section. The new report “illustrates the range of technologies currently undergoing commercialization in the industrial biotechnology space,” he says.
BIO says analysts are predicting rapid expansion of renewable chemical sales based on existing and planned production capacity.
McKinsey & Co., for example, estimates that there were $252 billion in sales of biobased products in 2012, with biofuels and plant extracts comprising more than half. Sales of renewable chemicals represented 9 percent of the $2.82 trillion in worldwide chemical sales in 2012.
By 2020, McKinsey expects biobased products to make up 11 percent of the $3.4 trillion global chemical market, BIO reports. Sales of biobased products would reach $375 billion to $441 billion by 2020, BIO says, with a compound annual growth rate of 8 percent over the preceding decade.
Worldwide sales of chemicals are expected to grow at 4 percent annually overall, BIO reports. While biofuels and plant extracts will continue to comprise half of the projected sales of biobased products in 2020, McKinsey expects the highest growth rates in sales of new biopolymers and renewable chemicals, biocatalysts for industrial processes and biologic medicines, as well as biofuels.
Yet, some uphill battles remain for the industry. The main challenge cited by producers is their ability to secure reliable, competitive supplies for large-scale product applications, according to BIO. Providing sufficiently large-scale supplies of drop-in renewable chemicals for some applications may require multiple manufacturers who adhere to common standards for chemical purity and quality.
The report also outlines federal and state policies that support the industry. For example, BIO cites the Renewable Fuel Standard, which not only helped stimulate innovation in biofuels, but also opened discussions and policy development in renewable chemicals and biobased products.
Erickson says that important policy drivers for the future include legislation that would create tax incentives for qualifying renewable chemical production and investments in biorefineries.
“Continued federal and state policy support can help growth of the 21st century biobased economy,” says Erickson. As an example, he cited how the 2014 farm bill extended loan guarantee eligibility to biobased product makers and renewable chemical producers through the Section 9003 Program with the help of a number of members of Congress.
That program “ensures renewable chemical producers can access necessary capital to build large-scale biorefinery projects in rural areas, creating new high value jobs and driving economic growth.” Lawmakers he cited as “champions of the farm bill's energy title” included senators Debbie Stabenow (D-Mich.), Roy Blunt (R-Mo.), Al Franken (D-Minn.), Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) as well as Reps. Collin Peterson (D-Minn.), Tim Walz (D-Minn.) and Dave Loebsack (D-Iowa).
To view the full report, click here.
For more news, go to: www.Agri-Pulse.com