Accelerated Growth

An adviser to the chemical and polymer industry offers potential growth scenarios for biopolymers.

December 29, 2009

Polymers are a key material of choice, albeit not all plastic businesses are as attractive as they once were. But we are again living in difficult economic times, and the paradigm is once again shifting. This shift is driven by a social consciousness (e.g., the notion of “green,” recycling, etc.) and the increasing costs of fossil fuel (e.g., energy and polymer derivatives). We are on the edge of another new era of technology—the “era of biosustainability”—as biopolymers re-emerge.

Today, chemicals and polymers represent a large, diverse and complex inter-dependent sector, with global revenue exceeding $3 trillion. Polymers are a significant contributor to the value of the global chemical industry. This is because polymers are a value-added chemical derivative that “enables” the value creation and the subsequent growth of chemical feedstocks and monomers.

Worldwide consumption of polymers peaked in 2007 at about 250 million metric tons, valued at close to $600 billion. North America and Europe represent about 25 percent of consumption each, while Asia has increased to about 35 percent, and the rest of the world comprises the remaining 15 percent. However, from 2008 to 2009 many sectors declined by as much as 30 to 40 percent in light of the recession. Yet, Asia likely gained global share of consumption.

Biopolymers are a small sub-sector of the global polymers industry. Estimated consumption was 600,000 metric tons in 2007 and 2008, representing about 0.2 percent of the overall global polymers industry, consisting of starch blends, polylactic acid, cellulosics and biourethanes.

Many types of biopolymers are currently offered. This is in part because of the broad classifications defining biopolymers. For this discussion, biopolymers are those polymers that are derived from biomass sources, which include chemical/monomer building blocks and finished polymer forms.

This definition relies primarily on the concept of biorenewability, meaning the raw material is renewable—it can be created (grown) again and again through agricultural or other biologic means. Therefore, biopolymers are sometimes referred to as biorenewable polymers, which support business and environmental goals of sustainability. This should not be confused with polymers that are recyclable and compostable—many polymers are, but not all of them are biorenewable.

It is interesting to note that thermoplastics are perceived as more “green” than thermosets in light of their inherent melt-processable recyclability. Thermoplastics represent more than 65 percent of all global polymer demand. Biopolymer thermoplastics will therefore provide a unique blend of biorenewability and recyclability, especially for consumer packaging needs. The benefit of recyclability is further improved if the material can be collected and separated for processing.

Because Mother Nature does not provide a consistent crop from year to year, the availability of a consistent raw material biomass stream is almost impossible to predict. Therefore, rather than creating a biopolymer directly from a crop, there is increasing interest in developing biobased monomers (chemical building blocks) that are chemically the same as their fossil-fuel cousins. This will guarantee that the resulting biopolymers meet a consistent specification and also could be produced using the same polymerization technologies that already are used for fossil-fuel based polymers. Therefore bioethylene monomer could be used to produce the same grade of polyethylene as is produced from petrochemical sources.

The use of biobased monomers is already in the advanced stages for thermosets, such as alkyd resins (from vegetable oils), urethanes (from biopolyols) and epoxies (from epoxidized vegetable oils and/or glycerin to epichlorohydrin). These biothermosets provide economic engineered solutions for industrial markets, such as structural composites in aerospace or electrical generation wind-vanes as well as foams for automotive seat cushions and home furnishings. Here, the need for performance outweighs the need for recycling, while still providing a biorenewable solution.

The drivers for biopolymer consumption are variable and regional in part because of the way a specific market defines and perceives the need for biopolymers.

One clear conclusion is that biopolymer-driven consumer solutions must be “economically inviting” and/or deliver something more than just a “green” perception. This is why the automobile sector is developing many uses for biopolymers, despite the difficult economic climate of the auto sector. Biopolymers and compounds with natural fibers such as flax provide automobile designers with attractive design options that satisfy the need for biorenewability, lighter-weight vehicles, potentially safer vehicles and high-speed part molding processes.

Four key factors appear to have the greatest impact on the future demand for biopolymers:

• Cost of fossil fuels—The increasing costs for oil, gas and coal are not new, but what is new is the staggering acceleration of fossil fuel cost as seen in 2008, where oil prices spiked to more than $130 per barrel. Although they have come down since, a steady rate of $70 per barrel is still not seen as an attractive price by many consumers, and the fear is now well-implanted that costs will escalate again in the future. Because biopolymer cost is less affected by fossil-fuel cost escalation, biopolymers are perceived to be a better economic solution long term. This may be true, but $70 oil does not support sufficient capitalization for all biopolymer projects.

• The “carbon footprint” and regulations—Greenhouse gases, such as carbon dioxide, are seen by many as a cause of global warming, albeit controversial. This perception will have an impact on biopolymers, which are perceived as being natural and cleaner, with a better carbon footprint compared to fossil-fuel derivatives.

• Global economies—Because fossil fuels and derivatives are globally traded, driven by the favorable economics of Middle East producers and the un-ending appetite of China’s need for hydrocarbon raw materials, polymer derivatives are far more prone to global economic and currency fluctuation. Global dislocation between suppliers and markets is also an exacerbating effect. Biopolymer manufacturing costs, however, tend to be more of a “local-regional” phenomenon; they are less affected by the global fluctuations that affect fossil-fuel derivatives.

• Technology in biorenewables—New technologies to create building-block chemicals and monomers, polymers, compounds, additives such as natural fiber and processing equipment will increasingly provide better performance and economic incentives to push biopolymers into the marketplace. Advances in cellulose conversion technology for non-food crops will help to solve the issue of “food for fuels”. Biomass waste conversion to biomonomers is becoming a reality.

Among these four factors, the cost of fossil-fuels is likely to have the biggest effect on the future competitive acceptance of biopolymers. Although biopolymers do not rely on fossil-fuel raw materials, their competitive price-point is influenced by the cost-performance of the incumbent fossil-fuel derived polymers.

Biopolymers become increasingly more viable as the price of oil increases. When oil exceeds $100 per barrel, most all biopolymers become economically attractive relative to crude-oil derivatives. Large breakthroughs are expected in new technologies that can provide improved biopolymer economics.

However, in the short term, a potentially significant limitation to biopolymer growth is the need for the petrochemical industry to protect its manufacturing asset position based in fossil fuel derivatives. There is a strong disincentive for exiting commodity polymers because the asset base in raw material processes (ethylene and propylene, for example) is too large and the potential impact on overall integrated economics would be huge, creating a “feedstock-driven exit barrier.”

Although the recession and lower energy costs relative to 2008 highs have taken some of the steam out of biopolymer market growth, they are short-term phenomena. Biopolymer demand is expected to grow at a multiple of fossil-fuel-derived polymers. Expect commodity polymers to exhibit an average growth rate of 2 to 3 percent and biopolymers to be three to five times that, potentially resulting in 1.5 million metric tons by 2020; this could be two to three times higher under the right circumstances. Developing countries could see higher growth.