Biobased Chemicals Europe-Building the Value Chain: Infocast in Milan Summary and Trends.

The event held by Infocast in Milan on the 8th-10th of February was a great success. A number of important speakers were present and a good cross section of the industry was present. Industrial Biotechnology is beginning to mature as an industry. It is finding its practical strengths and intelligent solutions are being found to address some of its weaknesses. Customer demand is rising and the market share of Industrial Biotech is increasing.

All parts of the value chain were present; feedstock companies, chemical companies, technology companies, biorefineries and a number of other groups such as R&D companies, downstream users and NGOs were also present. Industry segments such as bioplastics, biobased chemicals and biofuels were represented. Market research companies such as Lux Research were involved as were consultants such as Corinne Young.

From looking at this cross section of the industry, there are a few clear trends that showed in their presentations and in interviews. Many manufacturers are aiming to provide sustainable alternatives to current products sourced from petrochemicals. Biobased chemicals are generally seen as the most viable segment of industrial biotechnology. Genomatica focuses on sustainable chemicals production and is closing in on to the goal of producing basic and intermediate chemicals from bio feedstocks in a way that is competitive with products manufactured from petrochemicals. The strength of biobased chemicals is in the logistics as lower volumes of product and feedstock are involved and also in the environmental benefits, which are more pronounced and easier to maintain at this smaller scale. Biofuel is seen as less viable at present; pressures from the volume at which biofuels need to be produced and competition with existing petrochemicals is still a challenge to the industry that has ended many start up projects. However, an interesting point was made by Corinne Young regarding existing vs developing biofuel technologies. Food crops such as wheat have been bred for thousands of years for easy cultivation and high yields, while many of the second generation biofuel crops currently under development haven’t had such a period of domestication and optimization. She also highlighted market forces which mean that food and fuel prices don’t necessarily compete with each other.
 
All segments show signs that they will grow and that their market share will increase relative to petrochemicals. Part of this is likely to be due to consumer pressures, for example, in bioplastics there is consumer and regulator pressure to replace petrochemical derived plastic bags with biodegradable bioplastics. Genomatica found 57% of companies believe that in general we should be moving away from petrochemical based products. The prices of various bioderived feedstocks are much less volatile than the price of oil, which is an attraction to manufacturers who are worried about how the rising price of oil will affect their business. In many cases biofeedstocks are cheaper than oil, however the processing step adds to the cost. An interesting point that was made was over using natural gas as a feedstock; its price is much less volatile than the price of oil. In some cases biofeedstocks will have to compete with natural gas which could prove a greater challenge than petrochemicals. Growth is seen to be most likely for bioproducts which are feeding into existing markets rather than those which are novel, which is particularly true for bioplastics. Drop in, chemically identical products sourced from biofeedstock rather than petrochemicals are the products that are performing the best. Prices of biotech products are mostly driven by supply, rather than demand as is the way with petrochemical products, so as manufacturing volumes increase biotech products will become more attractive to consumers.

A number of practices are becoming more common among manufacturers. Life cycle analysis and supply chain approaches to technology development are being used extensively by a number of manufacturers, for example Chemtex. They approach technology development from three angles; feedstock production, feedstock conversion to fermentation feed and finally biofuel production by fermentation. Natureworks analysed the production of their Ingeo polymer with a “cradle to factory gate” approach, comparing it to a range of other polymers in a similar way and reaching the conclusion that their manufacturing process produced the least carbon emissions of the polymers they looked at. Analysis of this kind is proving useful to ongoing R&D, as it highlights areas for improvement; Natureworks are aiming to keep driving down the CO2 emissions of Ingeo production. Flexibility is also an important development for some companies; the prices of various biofeedstocks fluctuate depending on a number of factors, so at some times it makes more economic sense to use different feedstocks. Having technology flexible enough to do this gives an advantage to the manufacturer.

Automotive applications of biotechnology are becoming more common. Aside from the obvious use of biofuel in cars, a number of manufacturers are looking at the use of biopolymers. Often these applications are for bioderived fibers, as interior upholstery or for plastics to use in panels. Some high performance bioplastics are used in engine components such as seals.

Algenol acquires Cyano biofuels to boost their algae technology

Algenol, an algal biotechnology company recently named as a market leader by Lux research, has acquired Germany-based Cyano Biofuels, a spin out company from the Institute of Biology at Humboldt University.

Algenol co-founder and CEO, Paul Woods;

"Combining our companies will accelerate our ability to fully develop Algenol's DIRECT TO ETHANOL® technology and move us more rapidly toward commercialization. The Berlin area is well known for its world-class research on microalgae and is a perfect place to hire talented scientists and technicians. We plan to continue Cyano Biofuels' collaborations with German universities and believe these collaborations will add significant new technology and new capabilities to our Company."

Algenol specialize in producing ethanol fuel and biobased chemicals from hybrid algae, which can theoretically produce high yields of product more easily than from other feedstocks. Algae can also be grown using only carbon dioxide, water and sunlight. They have recently built new labs in Florida and have plans to begin construction of a pilot scale biorefinery in 2011. The blue-green algae (cyanobacteria) used in their DIRECT TO ETHANOL process are grown in aquaculture as opposed to on agricultural or marginal land as many other biofuel feedstocks are. 

Algenol has access to a wide variety of algae strains. Cyano is an R&D company which specializes in algal biology. The two companies have been working together for several years. After partnering with Algenol in 2010 and holding a minority stake in the company, it was announced that Cyano had been acquired by the company in March 2011. This move will significantly boost Algenol’s R&D capabilities and algae portfolio and also give the company access to more European expertise in the algal biology field as Cyano is closely linked to a number of German universities. This acquisition forms part of Algenol’s efforts to move the company from the development to a fully commercial company.

This acquisition reflects the stage of development at which the algal biotechnology industry is at; many start ups are still at the development stage, however these companies are trying to move forward to commercialization. The difficulty for algal biofuel is the amount of new technology development that needs to be done; as well as developing the pre-processing and conversion steps of the process, algae production methods have to be developed as well. Solazyme is one of the projects that have moved past the development stage, filling large orders from the US military for algal biofuel. A number of other companies are active in algal biotechnology, researching the possibilities for producing chemicals and pharmaceuticals from algae rather than using conventional chemistry or from other microorganisms. Some of these companies are edging closer to commercialization as well.

UCLA researchers examine the potential of algae proteins as Biofuel

At present, most of feedstock used for biofuel production is either carbohydrate for producing various alcohol fuels or lipid for producing biodiesel. However, the possibilities for using proteins to produce biofuel had not been much explored. The UCLA research project found that there is potential for proteins to be used as biofuel and doing so would result in environmental benefits. The paper was published online in the journal Nature Biotechnology. The team is currently looking at ways to develop large scale systems and extract protein economically.

UCLA Engineering research scientist, Kwang Myung Cho;

"Proteins had been completely ignored as a potential biomaterial because they've been thought of mainly as food. But in fact, there are a lot of different proteins that cannot be used as food. These proteins were overlooked as a resource for fuel or for chemicals because people did not know how to utilize them or how to grow them. We've solved these problems."

"This research is the first attempt to utilize protein as a carbon source for energy production and biorefining. To utilize protein as a carbon source, complex cellular regulation in nitrogen metabolism had to be rewired. This study clearly showed how to engineer microbial cells to control their cellular nitrogen metabolism."

Proteins are very common in nature; alongside lipids and carbohydrates they are some of the most abundant biomolecules in the world. When fast growing micro-organisms are growing in a nutrient rich conditions (such as in a bioreactor), proteins make up the largest portion of the cell mass and accumulate quickly, lending itself well to production in continuous systems. Protein can also be easily digested by microbes, making the preprocessing steps for fermentation simpler. Typically, the proteins would by broken down into its constituent units and then converted into chemicals. However, this step happens to present the greatest challenge. Most bacteria don’t convert their proteins into other chemicals under normal conditions; they retain them as protein or recycle them and re-use the subunits.

This challenge was met by reprogramming the way the cell handles protein; they used an existing cellular mechanism to export ammonia and carbon sources that can be used to produce fuel from the cell. Regulation of how the cell uses proteins for growth was altered, so that the cell would degrade protein without using it for growth. The ammonia is recycled and used as fertilizer for the algae bioreactor, to be incorporated into proteins to be recycled again. This strategy can be tweaked to fix more CO2 from the environment and to achieve higher yields of algae.   

An interesting point was made by the research group on nitrogen pollution; nitrogen fertilizers are a well known cause of ecological damage but in a system such as the one this group is considering nitrogen run off would not be an issue. Also, in the natural environment exposure to various conditions nitrogen containing residues (which are produced by other fermentation processes) can be converted into nitrous oxide, a greenhouse gas which is 300 times more potent than CO2. The ability to utilize the protein content of feedstock in addition to the carbohydrate/lipid content for generating biofuel would allow biofuel to be produced more efficiently, therefore decreasing the area of land that is needed to grow energy crops to meet demand for fuel.
 

Next Gen Polymeric/Nano-Membranes Could Boost Bio-Manufacturing and Water Treatment

New research from the University of Buffalo could result both in cheaper water purification and improved constant flow bioreactors.

This research, led by UB Chemist Javid Rzayev, involves a kind of molecular net made out of block copolymers and nanomaterials. By varying the pore size microbes can be filtered. Using block copolymers the research team produced pores approximately 55 nanometers in diameter, allowing water molecules but not bacteria to pass through. The configuration used by the team results in a self-assembling structure with evenly spaced pores. Clearly, this has value to the water treatment industry-- clean drinking water being one of the biggest global challenges in the coming century.

A secondary application of this device would be in the construction of constant flow bioreactors. Fermentations are done either in batches or constant flow. Batch fermentations are the most common; the culture is grown until nutrient depletion or toxin build up become limiting, then stopped and the product extracted. This involves down time as the reaction vessel must be cleaned and reset after each fermentation. In constant fermentations however, the culture is provided with nutrients and the product removed over time; because often the product limits the growth rate of the culture, this can result in higher yields. One of the problems with this method is extracting the microbes from the reaction mixture.

This is where these co-polymer nano-membranes could come in, given a pore size allowing only small molecules to pass. Using a dialysis-like setup, the products and toxins could be prevented from accumulating while leaving the microbes in the vessel. This would increase yields and minimize downtime. The technology could significantly increase the overall efficiency of biomanufacturing of chemicals and other products.

Infocast in Milan: Natureworks Ingeo biopolymer fibers

The Natureworks Ingeo Biopolymer has significant environmental benefits over many other polymers and is suitable for a wide range of applications, which Stephane Cavallo gave a presentation about at the recent Infocast event in Milan.

The carbon credentials of Ingeo are impressive, having been published in the Industrial Biotechnology Journal in 2010. The findings were from “cradle to factory gate”; the kg of CO2 emitted per kg of polymer for the current Ingeo production process is 1.3 kg. This is 60% of what was emitted by the version of the process used in 2005, showing that Natureworks is successfully working to reduce the environmental impact of its production methods, which they are still developing. The study also compared emissions to other plastics. The emissions of the current Ingeo production methods were the lowest of the plastics tested in the paper. The next lowest carbon emissions were from PVC (suspension) and Polypropylene; 1.9kg C02/kg polymer. By comparison, PET (amorphous) emissions are 3.2 kg C02/kg polymer and polystyrene emissions are 3.4 kg C02/kg polymer. Polycarbonate emissions are 7.6kg C02/kg polymer and nylon 6 emissions are 9.1kg C02/kg polymer.

Ingeo is a polylactide produced from dextrose, which Natureworks sources from biological feedstocks, which in turn goes on to be used in a variety of applications. Ingeo is applicable in the packaging sector, disposable items, bottles, fibers and also in durable items. As part of their research and development, Natureworks initially developed Ingeo for single use applications and then expanded it to more durable products, now being able to apply the technology for example in the casings of products such as computers (such as some Fujitsu laptops) and consumer electronics (such as the housings for some Samsung cell phones). Ingeo is also used in a number of semi-durable products such as credit cards. It has even been applied in the automotive industry; Toyota uses Ingeo in a range of applications, including spare wheel covers and floor mats. Ingeo has also been applied in textiles, being used for carpets and bedding.

What makes this flexibility of application possible is the different grades that Ingeo platform is produced in, some being more stable and suited to durable products, others for single use and intermediate grades which was done by tailoring the way the polymer forms to increase its stability and physical performance. Tailoring the polymer to more durable applications often conflicts with biodegradability of the product, but Natureworks has been finding ways to overcome this.

Alongside flexibility, Natureworks claims that biobased feedstock is much less volatile in price than oil which is an attractive prospect. The polymer itself is UV transparent, able to resist a range of chemicals and compatible with a wide range of additives/polymers, which adds to the flexibility of Ingeo. Natureworks is still looking at the next generation from Ingeo however. They are researching the next generation of monomers to use in its next platform of biopolymers.

Infocast in Milan: Peter Nieuwenhuizen on Challenges and Opportunities for Biobased Chemicals

Peter Nieuwenhuizen, until recently an Arthur D Little Strategy Consultant, now Director of Future-Proofing supply chains at Akzo Nobel, presented on the opportunities and challenges for biobased chemicals, particularly for automotive applications.

In recent times new partnerships and investments are announced frequently in the biobased chemicals sector, for example recent high profile partnerships between Dupont and Danisco, Shell and Cosan, BASF and CSM. Numerous parties have made projections for the value of various parts of the bio based economy, for example Cereplast putting the value of the US bioplastics sector at $10bn by 2020. New demonstration facilities have been announced; for example, BioMCN’s new 2nd gen biofuel plant with a 250 million liter annual output and Abgenoas demonstration plant with an output of 2,500 tons a day. 

Biobased chemical industry at the moment is small in relation to the conventional chemical industry, but its market share is growing and this is expected to continue due to preferences for renewable feedstocks. Based on growth patterns from 2003, they predict that biobased chemicals will have grown 40% on 2003 levels by 2013. Annually, they predict growth of between 5% and 10% for the biobased chemicals industry through to 2025; growth that is ahead of the petrochemicals industry.

ADL looked at the impact that Industrial Biotechnology will have on the petrochemical industry and found that a useful way to view the issue is in three platforms; dedicated production, Biofuel derived and in planta. Dedicated production refers to chemicals which are the focus of supply chains, such as fine and specialty chemicals. Examples would be penicillins, amino acids and stereospecific chemical isomers (which are easier to produce with Biotechnology). The most common production methods here revolve around fermentation and biocatalysis. Biofuel derived refers to chemicals produced either as a side product of biofuel production, or non-fuel uses of biofuels as platform chemicals in the chemical industry. For example, using bioethanol in the chemical industry, or producing 1,3 propandiol from glycerol. Finally, the in planta platform refers to producing chemicals in crops and extracting them after harvesting. In the pharmaceutical industry, producing drugs in crop plants by GM is known as pharming, but the concept is applicable in the chemical industry. This is largely theoretical at the present, though a natural example that doesn’t involve GM is production of natural rubber (isoprene).

They predicted the growth of each of these platforms in a number of scenarios; Stuck, Green Bloom, and Electrified. Across these scenarios, the dedicated platform consistently performs well. Stuck refers to a scenario where there are no significant technology breakthroughs and in planta/biofuel derived chemicals don’t take off. This scenario still sees the value of dedicated production increase by approximately 100-150% from 2007 to 2025 with a 7% market share. The Green Bloom scenario is a “best case“ scenario in which biofuel production grows strongly and in planta production becomes commercialized. The value of all three platforms grows by a combined total of approximately 300-700%, with dedicated production and in planta production making up the largest portions. The overall market share of biobased chemicals in this scenario is roughly 17%. The electrified scenario is one in which green technologies other than biobased alternatives proliferate and the price of oil drops. In this scenario, biofuel does not grow, oil remains the preferred feedstock of the industry (so the dedicated platform doesn’t grow a great deal either), however in planta production grows strongly. Due to growth in in planta production, from 2007 to 2025 they predict the industry will grow by 150-400% with a 10% market share.

What they did not consider was the likelihood of each of these scenarios occurring. Given recent trends, growth and regulatory reform in the biofuel industry, and also limited market penetration of other green energy technologies, we might be more likely to see a reality between the Stuck and Green Bloom scenarios rather than the Electrified scenario. From this, we can conclude that operations in the dedicated platform are safer investments for growth, in planta production is more of a variable prospect, but the more investment it receives the more likely it is to yield high returns. The biofuel derived platform depends on the growth of the biofuel industry, which is generally predicted to grow in coming years but by how much relies on a number of factors such as regulation and the price of oil.

ADL also considered the applications of biobased chemicals in the automotive industry, which are potentially broad. Excluding fuel applications of biotech, a large number of components in cars can be made using various biopolymers. From biopolyesters and biopolyols used in the interior furnishings an upholstery to using bio-derived isoprene in the tyres (as Goodyear and Danisco recently partnered to do). There are applications for biopolyamides and PLA in the engine of the car, due to their higher thermal stability and performance. A number of automotive manufacturers such as Toyota, Ford, Honda and Mazda are exploring and applying these biobased alternatives in their new cars, largely in the interiors due to the energy saving use of these materials gives when a life cycle analysis is carried out.  

Infocast in Milan: Nova-Institut Analyses Feedstocks and Feedstock Competition

Michael Carus of the Nova Institut gave a presentation at the recent Infocast event in Milan regarding recent developments at the Institut around feedstocks, policy and markets for Green Chemistry and Biopolymers.

The Institut has a number of areas of activity; Resource management, Industrial use of these resources and building the political/regulatory foundations for a sustainable bio-based economy. Resource management covers feedstocks; their production, cost and competitiveness with fossil fuel feedstocks. Industrial use of resources refers to a range of applications for industrial biotechnology; bioenergy/biofuels, bioplastics and bio-based chemicals. Their efforts are around the whole process, taking the feedstocks, converting them to products and taking them to market.

Prices of feedstocks are something that the Nova institute monitors and prices are rising across the board. The price of oil is at its highest point in February 2011 in 25 months, since the price spike in 2008. The price of wheat has also increased, largely due to droughts in 2010. Corn prices have risen sharply in 2011 due to poor harvests and some say demand for corn ethanol is also a factor. Increasing demand for corn in general is also a factor; more of it is being used for food markets and in non-industrial applications, such as bio-based chemicals. Sugar prices are also high due to a drought in Brazil; before the drought prices were amongst the most stable of all the feedstocks they looked at. Markets for renewable feedstocks from agriculture have been growing steadily for the past few years. While consistently larger and generally growing, markets for non renewable feedstocks fluctuate much more. The point was made that the prices of renewable feedstocks are driven by supply, but prices of oil are driven by demand, a product of the pressures on renewable feedstock production. Rising GDP of developing countries is also expected to affect the prices of these feedstocks, most likely resulting in a rise in 2011/2012.

Since renewable feedstocks prices are more dependent on supply, increasing this supply is one of the most fundamental ways of making these feedstocks more competitive with oil. Increasing yields is one way of doing this. It is not only a technological challenge, but also a challenge to regulatory frameworks in developing countries; often the methods for increasing yields common in developed countries are unavailable. Investment and reform is the answer here. This is a clear area for improvement that the Nova Institut has identified. Another method for increasing renewable feedstock supply is to increase the available land for growing crops; they estimate between 0.6 and 1.6 billion hectares could be used for agriculture with minimal impact on protected and urban areas. They also see GM technology as a potential technological contributor, but one that is less significant than these two other options according to Nova.

They looked at the food vs fuel issue in some detail and concluded that the issue has been oversimplified: they say the real issue is how to get the best yields out of agricultural land. Interestingly, centuries of selective breeding actually mean that food crops result in better yields than some of the crops currently used as non-food alternatives. Again, as prices of these feedstocks rely more upon supply rather than demand, increased demand for them from biobased fuels and chemicals won’t have as much of an effect (though scarcity might become an issue). Nova claims what is needed is not a shift from food crops to non-food crops, it is better use of agricultural land. But, the land available to produce renewable feedstocks will become limiting unless productivity is greatly increased and more land efficient options are used (such as solar or wind power). They also recommend food and feed crops are given higher priority over crops to be used for other applications.

Nova also made some interesting projections for the biobased chemicals market in 2025. They predict market penetration of biobased fine and specialty chemicals will roughly double (to make up approximately 50% of the market) from present levels. Biopolymers will also double (to around 15% of the market). Biobased commodity chemicals will increase its market share from 1-2% to 6-10% in that time, according to Nova. It can be said with reasonable confidence that fine and specialty chemical production will be one of the most solid growth areas for industrial biotech, as a number of other studies have reached the same conclusion. For example, the IBLF in the UK concluded that these sectors were relatively sure for growth in a number of scenario predictions for the 2025 time frame. Nova also found that use of biobased feedstock to produce biobased chemicals rather than fuels was a more efficient way to use land.