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UK Top Bio-Based Chemicals Opportunities

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UK Top Bio-Based Chemicals Opportunities UK Top Bio-based Chemicals Opportunities E4tech (UK) Ltd for LBNet December 2017 Contents 1 Introduction ............................................................................................................................................... 9 2 UK activities and capabilities in bio-based chemicals ............................................................................. 10 3 Review of bio-based chemicals opportunities ........................................................................................ 20 4 Framework for determining UK bio-based chemicals opportunities ...................................................... 32 4.1 Approach to assessing market attractiveness and UK strengths .................................................................... 33 4.2 Market attractiveness ..................................................................................................................................... 33 4.2.1 Market size (Value) ..................................................................................................................................... 33 4.2.2 Market growth potential ............................................................................................................................ 33 4.2.3 Competitiveness and market access ........................................................................................................... 34 4.2.4 Interesting features .................................................................................................................................... 34 4.3 UK strengths .................................................................................................................................................... 35 4.3.1 Industry and academic activity ................................................................................................................... 35 4.3.2 Industry and academic capabilities ............................................................................................................. 35 4.3.3 Potential for supply chain integration ........................................................................................................ 36 5 Prospective UK bio-based chemicals and case for growth ...................................................................... 37 5.1 Case for growth ............................................................................................................................................... 40 5.2 Path forward ................................................................................................................................................... 41 Appendix A Scoring matrix for bio- based chemicals opportunities ........................................................... 43 E4tech (UK) Ltd Incorporated in England and Wales 83 Victoria Street Company no. 4142898 London SW1H 0HW Registered address: United Kingdom 133-137 Alexandra Road, Wimbledon, London SW19 7JY Tel: +44 20 3008 6140 United Kingdom Fax: +44 20 7078 6180 www.e4tech.com 2 Executive summary Bio-based chemicals could play a key part in a sustainable, low carbon chemicals sector in combination with recycling and the pursuit of other sustainability characteristics such as low toxicity. They offer the opportunity to generate low carbon energy at the end of the useful life cycle of a product or act as a carbon store. Developing bio-based chemicals in a sustainable manner presents challenges and substantial new business opportunities. The UK has a very strong science base with capabilities to take on these challenges, and an evolving ecosystem of large and small companies increasingly active in bio-based chemicals. The global opportunities offered by the transition to a more sustainable, low carbon economy are vast, and the last decade has seen a substantial increase in interest in bio-based chemicals with many drop-in or novel bio-based chemicals being developed and introduced to the market. A 2004 US Department of Energy study on “Top Value Added Chemicals from Biomass” was seminal in attracting interest to the sector and steering academic and industrial activities, and LBNet has commissioned E4tech to investigate the attractiveness of bio-based chemicals and the opportunity they could present for the UK. The UK’s chemical industry employs around 105,000 people and generates a gross added value of about £9bn per year. Building on this basis, the opportunity to generate additional jobs and value through bio-based chemicals could be very large. A review of UK activities has identified around 25 industry players (ranging from start-up companies to large corporates) and around 10 universities, which are actively developing bio-based chemical routes. These activities are complemented by a strong national science base, and a number of collaborations between industry and academia are already in place. However, additional research and infrastructure investments would accelerate development of the sector and establish the UK as a leading centre for bio-based chemical innovations. Taking a lead at this early stage of development of the sector will open global opportunities for UK industry and generate significant economic value in the UK. An international literature review and interviews with many UK-based players led to the identification of around thirty interesting bio-based chemicals in terms of market and development potential (Table 1-1). 3 Table 1-1 List of Bio-based chemical opportunities in alphabetical order 1,3-Butanediol Fatty alcohols Malic acid (1,3-BDO) 1,3-Propanediol Fumaric acid Methanol (1,3-PDO) 2,5-Furandicarboxylic acid Furfural Methyl methacrylate (MMA) (FDCA) 3-Hydroxypropionic acid Glucaric acid Muconic acid (3-HP) 5-Hydroxymethylfurfural Glycerol n-Butanol (HMF) Acrylic acid Isoprene Polyhydroxyalkanoates (PHA) Adipic acid Itaconic acid Propylene glycol Butadiene Lactic acid Paraxylene (p-Xylene) D-Mannitol Levoglucosenone Succinic acid Epichlorohydrin Levulinic acid Terpenoids Ethanol L-Lysine Xylitol An in-depth assessment of market attractiveness and UK strengths was carried out for each of the bio-based chemicals to identify the most promising development opportunities for the UK. Market attractiveness was determined based on distinctive functionality and sustainability features, potential market value, and existing competition. UK strength was determined based on UK activities and capabilities in relation to the bio-based chemical in question. The results of the assessment are presented in a matrix which shows the relative positioning of the bio-based chemicals in relation to the criteria considered (Figure 1-1). 4 Figure 1-1 Assessment of bio-based chemicals market attractiveness and UK strengths. Legend: 3-HP (3-Hydroxypropionic acid), HMF (5-Hydroxymethylfurfural), PHA (Polyhydroxyalkanoates), p-Xylene (Paraxylene), FDCA (2,5 Furandicarboxylic acid) The analysis shows that there is a range of bio-based chemicals with high market attractiveness for which the current strength of UK positioning varies widely (top and bottom quadrants on the right). This grouping is the one considered of greatest interest and one in which existing areas of strength should be strengthened further and new strengths developed. There is also a grouping of bio-based chemicals where the UK shows good strengths but where market attractiveness may be medium to low. Investment into further strengthening the UK position should pay careful consideration to the potential market attractiveness. The top bio-based chemicals opportunities that could be the focus of near term development in the UK and generate benefits to the UK economy are listed in Table 1-2. 5 Table 1-2 Top 20 bio-based chemical opportunities for the UK Top 10 11 to 20 1 Lactic acid 11 Xylitol 2 2,5-Furandicarboxylic acid (FDCA) 12 3-Hydroxypropionic acid (3-HP) 3 Levoglucosenone 13 D-Mannitol 4 5-Hydroxymethylfurfural (HMF) 14 Polyhydroxyalkanoates (PHA) 5 Muconic acid 15 Fatty alcohols 6 Itaconic acid 16 Fumaric acid 7 1,3-Butanediol (1,3-BDO) 17 Succinic acid 8 Glucaric acid 18 p-Xylene 9 Levulinic acid 19 Methanol 10 n-Butanol 20 Adipic acid Lactic acid is used in the production of degradable polyesters, such as PLA, with large market potential as a result of growing environmental concerns and government regulations related to the use of petroleum derived, non-renewable plastics. The UK has a competitive position in lactic acid development, with UK based companies, such as Plaxica and Cellulac, having successfully generated value from lactic acid technology development, licensing and manufacturing. 2,5-Furandicarboxylic acid (FDCA) has a large market potential associated with the displacement of petroleum derived chemicals in various polymer applications, such as polyethylene terephthalate (PET), as a result of demand for sustainable plastics with enhanced functionality. FDCA derivatives have a number of interesting features which include degradable plastics and polymers, as well as improved functionality compared to their petroleum derived alternatives. The UK has good strengths in FDCA development, with several academic and commercial activities on FDCA, including the University of Liverpool, the University of York, the University of Manchester, and Biome Bioplastics. Besides developing pathways to produce FDCA from biomass, the activities also focus on production of novel polyester polymers with advanced functionalities. Levoglucosenone is attractive as a high value ingredient in the pharmaceutical, flavour, fragrance
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