Crude oil and natural gas have long been the primary feedstocks for the global chemical industry. But renewable feedstocks such as sugar (from corn or sugarcane) and glycerin (from vegetable oils) have recently challenged the dominance of fossil fuels. Natural fats and oils have long served as feedstocks for fatty acids and fatty alcohols; starches and sugars are well-established starting materials for ethanol, lactic acid and sorbitol.

More recently, plant-derived feedstocks have emerged as starting materials for commodity chemicals such as ethylene, isoprene and para-xylene, as well as for novel chemicals such as 2,5-furandicarboxylic acid, isosorbide and farnesene. These bio-based building blocks are in various stages of commercial development.

The chemicals industry remains in constant motion, however, and recent developments in the petrochemical market have significantly changed the outlook for renewable chemicals. A glut of naphtha-based cracking capacity is coming on stream in Asia, easing concerns about future shortages of C3, C4, C5 and pygas feedstocks. Those concerns drove much of the interest in alternative routes to butadiene, isoprene and other chemicals.

Even so, corporate sustainability initiatives play a role in the development of bio-based chemicals and plastics. Coca-Cola Co., for instance, pledged in 2009 to use PlantBottle bio-based packaging for all Polyethylene terephthalate (PET) bottles by 2020. Automaker Ford used PlantBottle material for interior fabric fitted into a Ford Fusion Energi, introduced in 2013. The fabric consisted of up to 30% plant-based materials and covered the car’s seat cushions, seat backs, head restraints, door panel inserts and headliners.

Ford Fusion interior using plant-based fabric. Source: Ford Motor Co.Ford Fusion interior using plant-based fabric. Source: Ford Motor Co.Similarly, Procter & Gamble intends to substitute 25% of its petroleum-based materials with sustainably sourced renewable ones by the same year. As a rule, bio-based chemicals and plastics have a smaller carbon footprint (that is, lower greenhouse gas emissions from “cradle” to factory gate) than their petrochemical counterparts. In addition, bio-based materials speak to consumers’ interest in “green” products.

Front-end Considerations

Demand for bio-based chemicals also depends on economics and supply chain issues. Relative production costs for bio-based chemicals need to be competitive with fossil fuel-based alternatives, since cost and product performance continue to trump sustainability initiatives.

The value chain for bio-based and conventional chemicals differs significantly in one key respect: the front end.

“The front end includes the feedstock suppliers," says Marifaith Hackett, senior manager in the IHS Chemicals business unit. That means agricultural processors (such as corn mill operations, palm oil producers, soybean oil producers, sugar producers and so on) in the case of bio-based chemicals and refineries and petrochemical producers in the case of conventional chemicals.

“Industrial biotechnology companies play a significant role in the bio-based chemical industry," says Hackett. At present, large corporations are collaborating with biotechnology firms to advance processes that will in turn cut down production cost and enhance market competitiveness.

The Market

Today's bio-based industry had an annual production capacity of 112.5 million metric tons (MMT) in 2013, according to the IHS report, "Chemical Building Blocks from Renewables." Ethanol, glycerin, fatty acids and sorbitol make up most of that capacity.

Relative production costs for bio-based and fossil fuel–based chemicals strongly influence market development. For some chemicals, the bio-based process offers lower production costs, and the commercial product is predominantly renewable. For example, the cost of producing fatty acids from palm oil is lower than the cost of manufacturing them from paraffins by oxidation. As a result, all linear fatty acids on the market today are made from natural oils; the fossil-fuel-based route (paraffin oxidation) to fatty acids has long since fallen into commercial disuse. Similarly, glycerin is 99% renewably sourced; synthetic glycerin—produced from epichlorohydrin—has a small market share.

In contrast, production costs for many new-to-the-market renewable chemicals (as opposed to well-established oleochemicals) are higher than those of their fossil fuel counterparts—at least today. Process technologies for bio-based chemicals are still evolving, and the scale of production is typically smaller than it is for mature petrochemicals. But the gap between bio-based and fossil fuel–based production costs is shrinking as process and catalyst improvements and increases in scale reduce the cost of manufacturing bio-based chemicals.

Long-term cost competitiveness is critical, especially for bio-based chemicals that are drop-in replacements for existing petrochemicals. Cost competitiveness is somewhat less imperative for novel chemicals. These chemicals are starting materials for equally novel derivatives, including new-to-the world ingredients and plastics. But even in these situations, production costs matter; customers inevitably compare the price and performance of the new products with those of petrochemical substitutes.

Fermentation Process Development

“If a process technology offers a low-cost route to a chemical, it is more likely to be commercialized," says Hackett. Currently, many companies use synthetic biology and high-throughput screening to improve processes for commercialization. Those companies include Amyris Inc., Genomatica and REG Life Sciences LLC (formerly LS9), among others.

According to the IHS report, Amyris has partnered with Michelin to develop a technology that utilizes synthetic biology tools to create a metabolic pathway in yeast that converts glucose into isoprene. Genomatica, meanwhile, focused on bio-based 1,4-butane-diol (BDO), where the process uses a genetically modified strain of Escherichia coli to convert sugar to BDO. The process includes glucose from corn, sucrose from sugarcane and sugar beets. Currently, the company is collaborating with several feedstock partners to create a method of creating BDO that uses cellulosic sugars from biomass and syngas from waste as starting materials.

Returning to the basics, fermentation was historically used to produce foods and beverages. Today, however, its definition so far as biochemistry is concerned refers to the action of microorganisms on organic substrates, where component products of fermentation may be separated from feedstocks and seen as pure substances.

Over the years, fermentation has been widely utilized to produce bio-chemicals and biofuels, including citric acid, lactic acid, ethanol, propanol, propionic acid, butanol and others. To keep up with the evolving market and to develop a reliable bioprocess platform, research and development in the field of metabolic process engineering (MPE) is required. MPE is an advanced technology that triggers changes in the metabolic pathway to generate metabolites of interest by wisely managing process parameters.

Another area of research focuses on synthetic biology and efficient screening. Despite developments in manipulation of metabolic pathways, challenges related to strain development and efficient scaling exist. In that regard, biotechnology companies are focusing on ways to engineer microorganisms and use high-throughput screening systems to accelerate process effectiveness and scale-up.

Simulating a fermentation process isn't easy; this smaller-scale process should mimic the operating conditions of the larger one, while taking into account variables like genetic modifications, strain selection, raw materials and others.

Key Challenges

Unlike the well-established oleochemicals, production costs associated with many of the new arrivals (for example, ethylene, ethylene glycol, butanediol, isobutanol, isoprene, adipic acid and para-xylene) are higher than those of their fossil fuel counterparts. Hackett says that most new arrivals are drop-in replacements for petrochemicals and have no real performance advantages. (1,3-Propanediol is the exception: no petrochemical counterpart is in commercial production.)

Price competition has become stiffer due to the shale gas boom and the recent decline in crude oil prices. Source: NREL, credit, Warren GretzPrice competition has become stiffer due to the shale gas boom and the recent decline in crude oil prices. Source: NREL, credit, Warren Gretz“New arrivals compete primarily on the basis of price," says Hackett. “Competing on price has become a lot more difficult lately," primarily due to the shale gas boom (which led to lower ethane prices) and the recent decline in crude oil prices.

Emerging industries commonly face challenges in terms of market competitiveness, process advancements and applications for new end uses. For example, the development of cellulosic feedstock technology is progressing slowly, Hackett says.

“In general, these processes are not economically competitive in their current state of development." Exceptions exist: Anellotech claims that it can produce benzene, toluene and xylenes (BTX) economically from agricultural waste; and Micromidas claims that it can produce para-Xylene (PX) economically from waste cardboard. However, Hackett says current production is on a small scale (pilot plant or demonstration unit) and not at commercial scale.

Then there is glycerin; supply is driven by the demand for coproducts like fatty alcohols, fatty acids and biodiesel and not on demand for it as a product.

“Renewable diesel has emerged as a strong competitor to biodiesel (fatty acid methyl esters or FAME), with large plants now operating in Singapore, Europe and the United States," Hackett says. “Substitution of renewable diesel (which does not generate glycerin as a co-product) for biodiesel could lead to a decrease in glycerin production and higher glycerin prices."