Executive Summary
The expense of capital and operations for manufacturing biobased materials and chemicals (BBMC) still largely limits these production facilities to sites where conventional feedstocks, like corn and sugar cane, are abundant and inexpensive. If not just individual factories, but the entire green chemicals industry are to scale up, they need to cultivate greater volumes of cheap, local biomass, convert a wider range of feedstocks like waste and cellulosic material to Intermediates, and process intermediates into higher-value chemicals.
The road to economic viability requires improvements in dozens of steps in cultivation, conversion, and processing to higher-value output, and increasing levels of techno/econometric analysis show areas where costs usually creep in. We built an overall map and three quantitative process models of the BBMC value chain based on our taxonomy, linking process steps to their input and output materials, in increasing levels of detail along the spectrum:
• Gasification followed by fermentation of syngas has great new product potential. The many products of syngas fermentation already proven at lab scale or larger include ethanol, butanol, acetic acid, butyric acid, 2,3-butanediol, and methane. Leading startups in this field include ZeaChem, which is collaborating with Procter and Gamble (P&G) on C3 chemicals like propylene from syngas; and LanzaTech and Global Bioenergies, which are working to produce four-carbon diols and olefins from syngas.
• Enzymatic hydrolysis of cellulosic biomass provides opportunities, just not in ethanol. Enzymatic hydrolysis is still an emerging science, so while it has been at a cost disadvantage that kept it largely confined to labs, today it is being commercialized in new facilities like GraalBio's 82-million-liter plant in Brazil, using Chemtex's Proesa technology as well as the latest enzymes from Novozymes and DSM. The problem is not only in the cellulosic processing, but in the ethanol glut that keeps demand down. With more microbes increasingly able to produce nearly any compound we get from petroleum, fixing process costs and diversifying output will improve the picture. For example, harvesting and/or collecting biomass costs add $15 per ton, or $0.21 per gallon. But the Kansas Alliance for BioRefining and BioEnergy (KABB) believes technology and process improvements, such as new baling machines, might cut stover feedstock costs by $25 per ton ($0.36 per gallon of cellulosic ethanol).
• Algae cultivation remains a cost-intensive loser—48% negative margin in our model. The problem with algae lies not in the organisms themselves—and genetic tinkering has produced strains even more prolific than nature envisioned—but in the cost and complexity of the facilities needed to grow algae at industrial scale. In the base case of this model, we assume a one-hectare (10,000 m2) site growing algae in open ponds—an area somewhat smaller than two football fields. At a cost of $202,000 per hectare, financing it is daunting. Costs exceed $412 per day, adding up to $150,732 annually, but revenues only total $279 per day, or $101,834 annually—a 48% negative margin.
While configurations and costs of biorefineries using gasification and enzymatic hydrolysis are difficult to calculate on a global average basis, a well-crafted model that enables exploration can identify opportunities for improvement in cost and performance. Many opportunities for improvement come from swapping out existing technologies for newer ones. And looking to adjacent industries—wastewater in particular—provides insight and reduces technology risk. For large companies in chemicals and materials, the build-out of low-cost shale gas refining, vast sheets of plastic liners for algae ponds, and cellulosic chemicals provides a large opportunity.
Editor's Note:
The text presented here is a reprint of the Executive Summary of a report prepared by Lux Research, Inc. ( June 2012; www.luxresearchinc.com). Lux Research does and seeks to do business with companies covered in its research reports. As such, the firm may have a conflict of interest that could affect the objectivity of this report. Lux Research prepared this report solely for informational purposes. The information and views expressed here are those of Lux Research, Inc., and not Industrial Biotechnology or Mary Ann Liebert, Inc., publishers, or their affiliates.
