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The Market for Bio-Based Chemicals Norman Deschamps May 23, 2013 “Meet the Expert” Series Holiday Inn Express
The Market for Bio-Based Chemicals
Norman Deschamps May 23, 2013 “Meet the Expert” Series Holiday Inn Express
Introduction
• Independent market research analyst focusing on renewable energy and the bio-based market (chemicals & fuels)
• Have been conducting market research on behalf of SBI Energy since 2008
• Author of the first and second editions of The World Market for Bio-Based Chemicals and World Biofuels Market published by SBI Energy
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Outline
• What are bio-based chemicals?
• A potential $12 billion market
• Market challenges & opportunities
• Key potential bio-based chemicals for Alberta
• Take home message
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Definition of Bio-Based Chemicals
• Platform and intermediate chemicals derived from biomass feedstocks
• Used to produce other chemicals • Base chemicals for industrial
manufacturing processes
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Hundreds of (Potential) Bio-Based Chemicals….
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The (Marketable) Biorenewable Chemical Universe
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The Bio-Pyramid
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A Potential 11.5 million MT Market
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A Potential $12 billion Market
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Where are Bio-Based Chemicals Being Produced?
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Market Drivers
• There are three key drivers affecting the Global bio-based chemicals market: – Moving away from petroleum dependency
– Increased consumer environmental responsibility
– Movement towards sustainability by manufacturers
• These drivers result in policies and regulations supporting adoption of bio-based chemicals 5/23/2013 11
Chemical Initiatives & Regulations Supporting Bio-Based Chemicals
Initiative/Regulation Country Year Purpose
USDA BioPreferred Program U.S. 2002 Bio-based products for federal procurement
California Assembly Bill 1879 California Senate Bill 509 U.S. 2008 Toxic chemical list &
alternatives
Toxic Substances and Control Act (TSCA) U.S. 1976 Chemicals registered for
commerce in the U.S. The Canadian Environmental Protection Act (CEPA) CA 1999 Controls toxic substances
Registration, Evaluation and Authorization of Chemicals (REACH)
EU 2007 Safety information on all chemicals sold in the EU
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Bio-Based Chemical Advantages – Increasing Sustainability
• Over 70% of consumers equate “green” with products made from natural or organic ingredients (Grail Research 2009)
• A May 2012 Accenture survey of senior executives found that 44% of respondents believed sustainability was “critical” to success
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Bio-Based Chemical Advantages – More Jobs
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Bio-Based Chemical Advantages – Similar to Traditional Refineries
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Oil Refinery Biorefinery
Bio-Based Chemical Advantages – Multiple Inputs/Multiple Outputs
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Oil Refinery Biorefinery
Source: U.S. Dept. of Energy
Bio-Based Chemical Advantages – Markets
• Existing strong markets will continue – Glycerin – Lactic acid
• USDA Bio-preferred program for emerging products – Biopolymers (PLA, PHA) – End products produced from bio-based
chemicals
• Drop-In replacements for existing chemicals
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Key Market Segments
• Solvents • Surfactants • Adhesives & sealants • Plastics for packaging, food-services,
consumer goods & agriculture
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Alberta’s Potential Bio-Based Chemical Production
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Glycerin
• 3.4 million MT market in 2012 • Two-thirds of global glycerin volume
produced as a co-product of biodiesel production
• Biodiesel mandate of 2% across Canada, 4% in BC
• 265 million litre/yr of new biodiesel production in Lloydminster (ADM) being constructed, 33 million kg/yr glycerin co-production
• Beef fat is considered a second generation feedstock
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$0 $1 $2 $3 $4 '07
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Billion USD
Bio-Epichlorohydrin (Bio-ECH)
• Traditionally produced from propylene, but can also be produced from refined glycerin
• Used for water treatment chemicals and the production of epoxy resins
• Global market of 1.5 million MT • Will be the fastest growing
biorenewable chemical over the next decade
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$0.0 $0.5 $1.0 $1.5 '07
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Bio-Polyethylene (Bio-PE)
• 77 million MT global PE market • Bio-PE 1% of that market • Only Braskem in Brazil is currently
producing at scale – market is wide open
• Bio-ethylene can be used in same PE facilities as oil-based ethylene
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$0.0 $0.5 $1.0 $1.5 '07
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Bio-Monoethylene Glycol (Bio-MEG)
• Used in polyester & PET resins • Over 1.5 million MT of MEG
produced in Alberta each year • Strong and growing NA market • Current global availability is limited
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$0.0 $0.5 $1.0 $1.5 '07
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Billion USD
The Take-Home Message
• The market for some bio-based chemicals such as glycerin is already large
• The market for other chemicals such as bio-MEG, bio-PE, and bio-ECH are going to experience exceptional growth over the next decade
• There is strong potential and market opportunity for Alberta to produce these bio-based chemicals 5/23/2013 24
