Sweeter feedstock

One of the many nuggets from the book Bluff your way in consultancy is that nobody should ever offer a prediction with a specific date. In other words, feel free to forecast the future, but stay vague about the actual timing and sooner or later you’re bound to be proven right.

And so it is with a new generation of sugar chemicals. Over the last decade, a stream of market studies have been issued, from institutions such as the US Department of Energy, the International Energy Agency; industry experts such as IHS and Nexant; even the UK’s own FROPTOP, part of the National Non-Food Crops Centre. At first blush, they can give the impression that a new dawn of sweeter feedstocks – derived from fructose, glucose and even cellulose – lies just around the corner.

However, the studies’ authors must have read the book. Although they point to plenty of potential, they also mention technical and economic challenges and refrain from making bold ‘X tonnes by date Y’ claims. That was clever, because in-place capacity of second-generation sugar-based chemicals  is about 300,000t/year at most. In estimated descending order of tonnage, the leading products are propylene glycol, propanediol, isobutanol, farnesene and succinic acid.

This will probably grow in coming years, and some new faces might join the crowd (see table, left), but don’t expect to see a major second-generation sector emerge any time soon.

Generation game

First-generation sugar chemicals, by contrast, are an established industry segment. The largest product is fermentation ethanol, which, thanks to biofuel subsidies, has tripled its size over the past 15 years to some 90m t consumed annually. This has squeezed out synthetic ethanol, which used to be a significant source of supply, to a current market share of 1-2%.

After ethanol come three other traditional fermentation products: lactic acid, furfural and sorbitol, which together account for an estimated 1m t/year consumption. The former and latter are mostly used as additives to food, drugs and personal care products. Furfural, in the middle, goes mainly into furfural alcohol, which is used to make specialised resins and solvents. While all these are traditional industries, their recent growth rates have ranged from 5 to 15%/year. For instance, furfural, which by the 1990s was seen as a moribund business, is projected to double to about 800,000t in the coming decade, says process licensor Dalin Yebo.

What turned around demand for the traditionals is simple: a boom in bio. For fuels, this has been spurred by governments. For products, this has been driven by customers and their end consumers.

Fairly typical of the fast-moving consumer goods (FMCG) sector is Unilever, which has put bio high on its banner. The consumer giant has launched a ‘Sustainable Living Plan’ that, according to research director Paul Jenkins, ‘has the potential to revolutionise the way we manufacture household products and further reduce the environmental impact of our products. [It] could eventually result in a range of new alternatives for core ingredients like surfactants and polymers, which go into many of our home and personal care products.’

The key word here is ‘potential’. Suppliers of bio-chemicals point out that, unlike governments, consumer-product-companies expect any revolution to be a profitable one. Moreover, they note that upon closer inspection, bio-products sometimes can bog down in other issues. First, using food for fuel is particularly unloved by the likes of Greenpeace. Using food for, say, a perceived luxury such as cosmetics might also meet disapproval. Second, bio-chemicals might not be as low-carbon as first assumed. Only a decade ago, biodiesel and bioethanol were hailed by European governments as the answer to global warming – since then several studies have shown they are not as green as was once thought. 

But going bio is by no means inevitable. One example is ‘renewable’ polymer polylactic acid (PLA), which drove a lot of the growth of its lactic acid monomer, but not enough to discourage Dow Chemical in 2005 from stepping out of a joint-venture to make it with Cargill. In 2012-13, Dow and competitor Braskem backed off of plans to build more bio-polyethyene capacity – from sugar, fermented to bioethanol and dehydrated to ethylene – in Brazil. In the spring of 2014, JBF Industries cancelled plans to supply 500,000t/year of Brazilian bio ethylene glycol that would have been turned into PET bottles for Coca-Cola.

Still, traditional sugar chemicals are growing, so producers are cautiously looking to find the next big things of the next generation.

Eric Johnson is managing director of Atlantic Consulting based in Zurich, Switzerland.