An Economic Impact Analysis of the U.S. Biobased Products Industry
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Acknowledgments The U.S. Department of Agriculture (USDA) BioPreferred® Program commissioned this report. The conclusions and recommendations are those of the authors and have not been endorsed by the USDA. We wish to thank Ms. Marie Wheat, Industry Economist and Ms. Kate Lewis, BioPreferred Program Analyst, for their guidance and insights. We also appreciate the assistance, editing, and oversight of Amec Foster Wheeler Environment & Infrastructure, Inc. – prime contractor and specifically the support of Mr. Charles Hester, Ms. Elizabeth Lewis, Ms. Jennifer Chu, Ms. Beatrice Smith, and Ms. Caroline Tapscott from the Durham, NC office. Dr. Art Werner was a great asset as well, and we are grateful for his help. We also wish to thank the dedicated students at the Duke Center for Sustainability & Commerce: Ms. Schuyler DeBree Ms. Amanda Gibson Ms. Shuvya Arakali Ms. Devon Bonney Ms. Katherine Hurrell Ms. Lili Pita Ms. Maurita Denley In addition, the authors are grateful to the following organizations for providing guidance and insights, without which this report would not have been possible: American Chemical Deere & Company Novozymes Society Dow Chemical Company North Carolina American Cleaning DuPont Biotechnology Center Institute Eastman Chemical Patagonia, Inc. Agricultural Utilization Company Penford Products Co. Research Institute Enviva POET, LLC (AURI) Ford Motor Company Procter & Gamble BASF Corporation Green Biologics Ltd. Seventh Generation, Inc. Bayer AG General Motors Society of the Plastics BioAmber, Inc. Company Industry BioFiber Solutions IO Sustainability Tecnon OrbiChem International Johnson and Johnson Tetsis Biotechnology Lanzatech Tyton BioEnergy Innovation Organization Lenovo Systems The Bureau of Labor Lux Research, Inc. United Soybean Board Statistics of the U.S. Michigan Biotechnology U.S. Forest Service Department of Labor Institute Verdezyne, Inc. The Coca-Cola Company Myriant Corporation Walmart Stores, Inc. ConVergInce Advisers NatureWorks LLC Yulex Corporation Cotton Incorporated Nike We appreciate Ms. Beatrice Smith creating the maps using ArcGIS® software by Esri. ArcGIS® and ArcMap™ are the intellectual property of Esri and are used herein under license. Copyright © Esri. All rights reserved. For more information about Esri® software, please visit www.esri.com. i About the Authors Jay S. Golden an AT&T Industrial Ecology Fellow. Dr. Contact: [email protected] Golden founded and co-directed the Dr. Jay Golden is Sustainability Consortium and consults for Director of the companies around the world. Duke Center for Sustainability & Robert Handfield Commerce and a Contact: [email protected] faculty member in Dr. Robert Handfield is the Division of the Bank of America Earth & Ocean Sciences at the Nicholas University Distinguished School of the Environment; Dr. Golden has Professor of Supply Chain a secondary appointment in Civil & Management at North Environmental Engineering at the Pratt Carolina State University School of Engineering at Duke University. and Director of the Supply Chain Resource His research covers sustainable systems and Cooperative. He also serves as Faculty Lead production consumption systems of Earth for the Manufacturing Analytics Group resources using systems and lifecycle within the International Institute of modeling. Current areas of focus include Analytics, and he is on the Faculty for the risks and resiliency resulting from increased Operations Research Curriculum at N.C. industrialization of terrestrial-based State University. resources, rapid urbanization, and the interactions with environmental, economic, Dr. Handfield is the Consulting Editor of the and social drivers. Dr. Golden received his Journal of Operations Management, one of Ph.D. in Engineering from the University of the leading journals in the field of supply Cambridge, and his Master's degree in chain management, and he has written Environmental Engineering and Sustainable several books on supply chain management. Development from a joint program of the In 2013, he led a global study on Global Massachusetts Institute of Technology and Logistics Trends and Strategies for BVL the University of Cambridge. He also holds International and wrote a report entitled a Professional Mastery of Project ‘Future Buy: The Future of Procurement,’ Management Certificate from Stanford which was published by KPMG. University, an MLE in Higher Education from Harvard, and has a B.A. degree in He has published extensively on sustainable Management. supply chain management in the Journal of Supply Management, Business Strategy and In 2009, Dr. Golden was presented the the Environment, and the European Journal Faculty Pioneer Award by the Aspen of Operations Research. In 2013, he also Institute for his leadership in the field of conducted studies on global supply chain sustainability education & research, and he sustainability with the German non-profit was named by Ethisphere as one of the 100 logistics organization, BVL International, Most Influential People in Business Ethics. and he received funding in 1998 from the He was appointed to the UN Lifecycle National Science Foundation to study Management Task Force, and he was named Environmentally-Friendly Manufacturing. ii Jesse Daystar examined the sustainability implications of Contact: [email protected] the industrialization of the Earth’s resources. Dr. Jesse Daystar is He utilized lifecycle-modeling techniques in the Assistant Director order to analyze the environmental impacts at the Duke Center for of utilizing biological feedstocks for energy Sustainability & production. Commerce at Duke University. Dr. Dr. Morrison graduated from Franklin & Daystar has a Ph.D. and M.S. in Forest Marshall College with his B.S. in Biomaterials as well as a B.S. in Chemical Environmental Science and earned his and Biomolecular Engineering and a B.S. in Master of Environmental Management Pulp & Paper Engineering from North degree from Duke University. Carolina State University. Dr. Daystar leads research and consulting in aspects of product Eric McConnell Contact: [email protected] sustainability, biomaterials, biochemicals, and bioenergy focused on identifying Dr. Eric McConnell is an environmental tradeoffs, environmental and Assistant Professor in the technical risks, and environmental impacts. Department of Forest This research and consulting has produced Biomaterials, College of publications, sustainability and chemical Natural Resources, at engineering tools, and certifications for North Carolina State clients including Eastman Chemical, Cotton University. Dr. Incorporated, the USDA, and the DOE. McConnell is also a Wood Drawing on skills in Life Cycle Assessment, Products Specialist with sustainability strategy, chemical the North Carolina Cooperative Extension engineering, paper and pulp engineering, Service. He received his B.S. in Forest and supply chain logistics & strategy, Management from Louisiana Tech Daystar develops sustainability solutions University and his Masters and Ph.D. through pragmatic research and applied degrees from Mississippi State University in industrial solutions. His experience includes Forest Products and Forest Resources sustainable chemical process development respectively. and efficiency management program development with the National Council for Dr. McConnell’s research has focused on Air and Stream Improvement, Mead input-output modeling of the forest products WestVaco, Pesco-Beam Environmental industry, timber, and lumber price trends, Solutions, and Kemira Chemical. and the typologies of production forestry clientele. His Extension program provides Brandon Morrison information to clientele and stakeholders Contact: [email protected] regarding wood technology, wood products sustainability criteria, economic impacts, Dr. Brandon Morrison earned his Ph.D. in Earth and industrial trends. Dr. McConnell’s and Ocean Sciences from professional service includes contributing to the Nicholas School of the Forest Products Society, the Society of the Environment at Duke American Foresters, and the Society of University. His Wood Science and Technology. dissertation research iii Table of Contents Acknowledgements .......................................................................................................................... i About the Authors ........................................................................................................................... ii Executive Summary ....................................................................................................................... vi Glossary of Terms ........................................................................................................................ xiv I. INTRODUCTION ............................................................................................... 1 A. The USDA BioPreferred® Program ............................................................................... 1 B. About this Report ......................................................................................................... 2 II. INDUSTRY OVERVIEW ................................................................................... 4 A. Overview of the Changes from 2013 to 2014 ................................................................ 4 B. Factors Shaping the Biobased Products Industry ........................................................ 6 C. Biobased Products Industry Growth Forecast ...........................................................