Bio-based chemicals receive boost from shale gas boom in North America

As the shale gas boom continues, North American ethylene producers are increasingly shifting from petroleum-derived naphtha to lighter, natural gas-based feedstocks. The result has been a strong reduction in the  production of chemical-grade propylene and pygas co-products: co-products, that in turn, are the starting materials for a variety of chemical intermediates and polymers. Somewhat unexpectedly, sugars, glycerin and other plant-derived products are now emerging as economically competitive starting materials for a range of commodity chemicals, writes the IHS Chemical Special Report: Chemical Building Blocks from Renewables.

Long used as starting materials for shampoos and detergents, bio-based chemicals are now attracting serious interest as drop-in replacements for petroleum-based commodity chemicals.

According to Marifaith Hackett, director of specialty chemicals at IHS Chemical and the report's lead author, production capacity for renewable chemicals is significant, even though it accounts for a small share of overall chemical production capacity. "In 2013, total annual production capacity for renewably sourced chemicals was approximately 113 million metric tons (MMT), including nearly 89 MMT of ethanol capacity," she said.

Natural fats and oils have, for many years, 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 economically viable starting materials for commodity chemicals such as butanediol, isoprene and para-xylene, as well as for novel chemicals such as 2,5-furandicarboxylic acid and isosorbide.

Since these bio-based chemicals are derived from agricultural products, the value chain for the bio-based chemicals sector differs significantly from that of the chemical industry, Hackett said. As a result,  nontraditional players - notably industrial biotechnology firms and start-up companies with focused expertise in chemical catalysis - are emerging as chemical producers and in many cases, partnering with established agricultural processors and chemical manufacturers to gain access to capital, fermentation or chemical processing expertise, proprietary technology, or feedstocks.

"As the process technologies for these chemicals evolve, the gap between bio-based and fossil-fuel based production costs is shrinking," Hackett said "The key is that, increasingly, processes based on renewable starting materials provide a critical alternative source of 'on-purpose' production for certain chemicals that are in short supply-like butadiene. Tire and rubber producers, in particular, want to ensure stable long-term supplies of the key chemical precursors for their products, and bio-based chemicals have the potential to address that need along with offering greater price stability."

In addition to supply chain considerations, consumer demand and corporate sustainability initiatives are driving the increased use of bio-based chemicals. Employing bio-based chemicals helps manufacturers respond to consumer demand for more sustainable products, and it supports the manufacturer's efforts to reduce its carbon footprint. Bio-based chemicals usually have lower cradle-to-gate greenhouse gas emissions than their fossil-fuel-based counterparts.

"Nonetheless," Hackett noted, "economics has a significant impact on demand. Cost and performance considerations continue to outweigh sustainability in most corporate purchasing decisions. Some manufacturers are willing to pay a premium for the sustainability benefits and customer appeal, but performance of these renewable chemicals has to equal that of their fossil-fuel based equivalents."

The IHS report also took a look at some of the companies currently active in this sector. Archer Daniels Midland is producing propylene glycol from glycerin, a co-product of biodiesel production. BASF, a licensee of Genomatica's technology, is supplying bio-based 1,4-butanediol, a spandex precursor. Agricultural processor Cargill Inc., a producer of sorbitol and lactic acid, is developing routes to bio-based acrylic acid with Novozymes and BASF.

DuPont Tate & Lyle Bio Products, a joint venture of chemical producer DuPont and food ingredient supplier Tate & Lyle, is now producing bio-based 1,3-propanediol, a starting material for fibers and engineering plastics as well as an ingredient in personal care products. Solvay, Jiangsu Yangnong Chemical and Vinythai Public Co. Ltd. are producing bio-based epichlorohydrin from glycerin. Gevo Inc. produces bio-based isobutanol on a commercial scale and bio-based para-xylene (a precursor of polyethylene terephthalate (PET)-bottle resin) on a pilot scale. Laihe Rockley Biochemicals produces bio-based butanol and acetone from agricultural waste (corn stover and corn cobs).

Although not yet at commercial-scale production, several tire manufacturers have formed alliances to produce bio-based synthetic rubber from bio-based isoprene or bio-based butadiene.