Nova-Institute’s preliminary market study entitled “Bio-based Building Blocks and Polymers – Global Capacities and Trends 2016–2021”, reports on seventeen novel building blocks with an estimated total production capacity of 2.4 million tons in 2016, expected to reach 3.5 million tons in 2021, and with a CAGR of 8%.
Commercialisation and development of these novel building blocks are discussed in more detail in the new nova Institute trend report, “Commercialisation Updates on Bio-Based Building Blocks”. The rise and wane of the markets for several established bio-based building blocks are also discussed fully including various technology processes, feedstock usage, supply/demand, and pricing whenever available for both incumbent petrochemicals and their bio-based chemical alternatives. Both reports are available at http://www.bio-based.eu/reports.
Although robust growth is still anticipated, major industry restructuring continued in 2016 as the development and commercialisation of bio-based building blocks responded to continued low crude oil and petrochemical prices, prevalent since late 2014. The development and commercialisation of drop-in bio-based commodity chemicals such as those targeting ethylene and propylene-based derivatives have been impacted particularly hard. The contract price for ethylene in the US dropped sharply from an average of $1,062/ton in 2014 to $673/ton in 2016. The average price for US propylene also declined dramatically from $1,530/ton in 2014 to $732/ton in 2016. This has led companies such as Braskem and Dow Chemical to shelve their biobased propylene development projects, while Mitsui abandoned its sugarcane-based ethanol joint venture with Dow Chemical in Brazil, which had aimed to build a future ethanol- based polyethylene manufacturing facility to compete against Braskem’s 200,000 tpa Green PE plant in Brazil.
After more than two years of crude oil prices remaining at around $50/bbl, several renewable chemical companies and investors have started rethinking their growth strategies, especially those who have invested R&D in drop-in biobased chemical alternatives to commodity petrochemicals.
One positive note is that interest in the potential beneficial properties of novel bio-based building blocks. Even oil companies such as Total, Neste, Tesoro, Chevron and American Refining Group as well as petrochemical companies, whose profits have been affected by low crude oil and petrochemical prices, are looking to expand their portfolios to include potential applications of these novel building blocks in specialised, higher-value, smaller-volume markets.
Below is a summary of the progress and slow-downs in the development and commercialisation of several biobased building blocks: