Bridging the Divide between Demand and Bio-Based Materials Kalib Kersh 4 th Annual Next Generation Bio-Based Chemicals
About Lux Research Technology coverage Solar Components Helps clients find new business opportunities from Solar Systems emerging technologies in physical and life sciences Grid Storage Offers ongoing technology and market intelligence , Electric Vehicles as well as market data and consulting services Alternative Fuels Bio-based Materials & Chemicals Over 250 clients on six continents – multinational Formulation and Delivery corporations, investors, governments, and SMEs China BioPharma Global reach, with over 80 employees in Boston, New Water Exploration and York, Amsterdam, Singapore, Shanghai, Seoul, and Production Tokyo Advanced Materials Printed, Flexible, and Organic Electronics Combines deep technical expertise with business Energy Electronics analysis to support strategic decisions Sustainable Building Materials Efficient Building Systems China Innovation 2
Which came first? The molecule or the market? 3
History is littered with eureka moments that never amount to much value for end-users 4
Bio-based chemical industry innovation cycle: Got sample quantities? It’s time for applications Feedstock development Capacity Conversion expansion evolution Consumer Material demand availability Applications development 5
Overview Applications are useful in structuring bio-based chemicals opportunities Leaders partner profusely to access markets and applications expertise Bio-based materials value proposition is ringing more clearly than ever Lessons from history may accelerate bio-chemical commercialization 6
Performed: Semi-quantitative assessment of largest polymer demands and how bio-based polymers fit End-users are hungry for polymers – where are they? Rough order-of-magnitude market sizing Simple match and rank approach to seeing which polymers meet which application demands 7
End-users are out there … breathing today and being born tomorrow 8
Rise of the middle class is inevitable –and is bringing environmental and technical challenges with it 9
Prevailing sources of resources likely not to continue to be economically accessible – in short order And this most recent Lux report pegs the end of (economically recoverable) oil at 2030 to 2034 … unless significant investment is committed Source: Lux Research The Race to Replace Reserves, October 2012
Application Markets in the Billions of $’s Small Low Mid-range High Mid-range Large Massive $<1B $5B-$10B $1-$10B $10-$100B >$100B • • • • • Disposable Medical Tubing Beverage Chemicals liners containers containers • • Laminates Plastics • • • Disposable Specialty Food • • Disposable Textiles and flatware coatings containers bags fabrics • • Industrial Pharma • • Container Industrial coatings packaging closures packaging • Architectural • Advanced coatings composites • Medical • Gears and biomaterials mechanical • parts Shipping packaging • Industrial • enclosures Industrial films Source: Lux Research • • Medical Piping Bridging the Divide packaging • Insulation between Demands and Bio- • Industrial Based Materials , • Adhesives September, 2012 11 containers
Ranking criteria were used to match applications to polymers that fit the application’s requirements Applications were rated on criteria of: Materials were rated on dimensions of: Differentiated performance required by Performance as differentiator application Need for material to be durable Durability Need for material to be recyclable Recyclable Need for an environmentally preferred Environmentally preferred solution Need for economic availability and scale Economic availability Threat of substitution Threat of substitution (Substitution potential) (Substitution potential) Other factors Other factors Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials , September, 2012 12
Technical Parameters / Materials Properties Carbon Biodegrad- Specialty / Rheology as Footprint / ability and Performance as Performance Environmental Energy Available Compost- Differentiator Durability Attribute Recyclable Preference Efficiency Economically ability Scale Polyvinyl chloride (PVC) Polypropylene (PP) Polystyrene (PS and HIPS) Polycarbonate Biopolymer-containing blends and alloys Polyethylene (LDPE) Polyethylene (HDPE) Polyethylene terephthalate (PET) Polyester (PET, PC, PBAT) Nylon 6, nylon 11 Eco-polyester Ethylene vinyl acetate (EVA) Polytrimethyl terephtalate (PTT) Polylactic acid (PLA) Polyhydroxybutyrate (PHB) Acrylonitrile butadiene styrene (ABS) Polyhydroxyalkanoates (PHA) Polybutylene succinate (PBS) Poly-3-hydroxybutyrate-co-valerate (PHBV) Polyurethane (PUR or PU) Polyetheretherketone (PEEK) Key: 1 2 3 4 5 Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials , September, 2012 13
Top Material-Application Matches, on Basis of Technical and Market Parameters Coatings Containers, packaging, films Industrial components Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials , September, 2012 14
Bio-based materials participate in these applications with performance meeting or exceeding incumbents Application Materials Opportunity Coatings Bio-based feedstocks including Increased bio-based content; soybean oil, tung oil, polyols low VOCs (satisfies CARB and including glycerin and bio-based other regulations) Industrial PTT for foams Adding value through components advanced manufacturing PE, EVA, and ABS for tubing Using large-volume materials ABS for advanced composites, in unprecedented, PC for laminates, underutilized, or difficult ways PP insulation Containers, HDPE, LDPE, PET, and PVC; PLA’s low carbon intensity, packaging, films potential for recycling and PLA for disposables can’t be beat biodegradability make it best- in-class for disposable items Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials , September, 2012 15
A host of developers continue work to make an increasing slate of bio-based “drop-ins” available Chemical End products Key companies Butanol Solvents, paints, butyl rubber, Gevo, Butamax (isobut); Cathay, MetEx, PET, fuels Cobalt (n-but) Adipic acid Nylons, resins, polyurethanes Verdezyne, Rennovia, BioAmber, Inventure, Genomatica Succinic acid C4 molecules, PBS, PBT, solvents, BioAmber, Myriant, DSM/Roquette, de-icers BASF/Purac Butanediol (BDO) C4 molecules, PBS, PBT Genomatica, LanzaTech (2,3-BD), BioAmber Butadiene Rubber, ABS Genomatica, Amyris, Global Bioenergies Isoprene Rubber GlycosBio, AE Biofuels/Zymetis, Amyris, Genencor, Global Bioenergies Propanediol (PDO) Fibers, polyurethanes, PTT, DuPont, GlycosBio, Inventure, MetEx cosmetics Acrylic Acid Coatings, adhesives, plastics OPX Biotechnologies, Itaconix, Novomer Furans Polyesters, polyurethane, fuels Avantium, Pennakem Terephthalic acid PET, plasticizers Draths, Avantium, Gevo 16
Partnering on applications and accessing markets increases at a frenzied velocity Products on market today Partner on applications & access to markets Substitutes Drop-in Replacements Improvements • PLA, starch- based plastics • PE, PP, PET, solvents, polymers • Spider silk, living materials BDO Butanol Succinic acid Acrylic acid PDO Adipic acid Isoprene Butadiene Terephthalic acid Furans 17
Brand owners are reaching down to stimulate development of bioPET and alternatives 18
Gevo’s downstream partners create products in a range of fuels and chemicals applications 19
Bio-based rubber gaining steam through a range of key alliances and joint development work 20
Partnerships to commercialize relatively novel bio- based specialty chemicals are even more important PBS 21
Some of the bio-based hype has subsided – but there’s still plenty of buzz – and opps for growth Some still may be asking, “Is bio better?” Or worse: they assume/believe bio has nothing to offer them Others are making investments and thinking about strategic opportunities to be met by bio- enabled materials and processes • Large companies which desire to maintain an edge should be mindful of extensive commitments in bio by the plalyers like …
The Bio-Based Materials value proposition Biotech does takes time to develop, but has profound ways of meeting market challenges • Hedge against supply chain risk cost savings • Add unprecedented value – bio-based lubricants, new renewable/biodegradable/high performance 23
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