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Bridging the Divide between Demand and Bio-Based Materials Kalib - - PowerPoint PPT Presentation

Bridging the Divide between Demand and Bio-Based Materials Kalib Kersh 4 th Annual Next Generation Bio-Based Chemicals About Lux Research Technology coverage Solar Components Helps clients find new business opportunities from Solar Systems


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Bridging the Divide between Demand and Bio-Based Materials

Kalib Kersh 4th Annual Next Generation Bio-Based Chemicals

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About Lux Research

Helps clients find new business opportunities from emerging technologies in physical and life sciences Offers ongoing technology and market intelligence, as well as market data and consulting services Over 250 clients on six continents – multinational corporations, investors, governments, and SMEs Global reach, with over 80 employees in Boston, New York, Amsterdam, Singapore, Shanghai, Seoul, and Tokyo Combines deep technical expertise with business analysis to support strategic decisions

Technology coverage

Solar Components Solar Systems Grid Storage Electric Vehicles Alternative Fuels Bio-based Materials & Chemicals Formulation and Delivery China BioPharma Water Exploration and Production Advanced Materials Printed, Flexible, and Organic Electronics Energy Electronics Sustainable Building Materials Efficient Building Systems China Innovation

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Which came first? The molecule or the market?

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History is littered with eureka moments that never amount to much value for end-users

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Bio-based chemical industry innovation cycle: Got sample quantities? It’s time for applications

Feedstock development Conversion evolution Material availability Applications development Consumer demand Capacity expansion

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Overview

Applications are useful in structuring bio-based chemicals opportunities Leaders partner profusely to access markets and applications expertise Bio-based materials value proposition is ringing more clearly than ever Lessons from history may accelerate bio-chemical commercialization

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Performed: Semi-quantitative assessment of largest polymer demands and how bio-based polymers fit

End-users are hungry for polymers – where are they? Rough order-of-magnitude market sizing Simple match and rank approach to seeing which polymers meet which application demands

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End-users are out there … breathing today and being born tomorrow

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Rise of the middle class is inevitable –and is bringing environmental and technical challenges with it

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Prevailing sources of resources likely not to continue to be economically accessible – in short order

Source: Lux Research The Race to Replace Reserves, October 2012

And this most recent Lux report pegs the end of (economically recoverable)

  • il at 2030 to 2034 … unless significant

investment is committed

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Application Markets in the Billions of $’s

Small $<1B Low Mid-range $5B-$10B High Mid-range $1-$10B Large $10-$100B Massive >$100B

  • Disposable

liners

  • Disposable

flatware

  • Medical

containers

  • Specialty

coatings

  • Industrial

coatings

  • Tubing
  • Laminates
  • Disposable

bags

  • Container

closures

  • Advanced

composites

  • Gears and

mechanical parts

  • Industrial

enclosures

  • Medical

packaging

  • Industrial

containers

  • Beverage

containers

  • Food

containers

  • Pharma

packaging

  • Architectural

coatings

  • Medical

biomaterials

  • Shipping

packaging

  • Industrial films
  • Piping
  • Insulation
  • Adhesives
  • Chemicals
  • Plastics
  • Textiles and

fabrics

  • Industrial

packaging

Source: Lux Research Bridging the Divide between Demands and Bio- Based Materials, September, 2012

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Ranking criteria were used to match applications to polymers that fit the application’s requirements

Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials, September, 2012 Applications were rated on criteria of: Materials were rated on dimensions of: Differentiated performance required by application Performance as differentiator Need for material to be durable Durability Need for material to be recyclable Recyclable Need for an environmentally preferred solution Environmentally preferred Need for economic availability and scale Economic availability Threat of substitution (Substitution potential) Threat of substitution (Substitution potential) Other factors Other factors

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Technical Parameters / Materials Properties

Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials, September, 2012

Specialty / Performance as Differentiator Durability Rheology as Performance Attribute Recyclable Environmental Preference Carbon Footprint / Energy Efficiency Available Economically Biodegrad- ability and Compost- ability Scale

Polyvinyl chloride (PVC) Polypropylene (PP) Polystyrene (PS and HIPS) Polycarbonate Biopolymer-containing blends and alloys Polyethylene (LDPE) Polyethylene (HDPE) Polyethylene terephthalate (PET) Polyester (PET, PC, PBAT) Nylon 6, nylon 11 Eco-polyester Ethylene vinyl acetate (EVA) Polytrimethyl terephtalate (PTT) Polylactic acid (PLA) Polyhydroxybutyrate (PHB) Acrylonitrile butadiene styrene (ABS) Polyhydroxyalkanoates (PHA) Polybutylene succinate (PBS) Poly-3-hydroxybutyrate-co-valerate (PHBV) Polyurethane (PUR or PU) Polyetheretherketone (PEEK) Key: 1 2 3 4 5

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Top Material-Application Matches, on Basis of Technical and Market Parameters

Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials, September, 2012

Containers, packaging, films Industrial components Coatings

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Bio-based materials participate in these applications with performance meeting or exceeding incumbents

Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials, September, 2012

Application Materials Opportunity Coatings Bio-based feedstocks including soybean oil, tung oil, polyols including glycerin and bio-based Increased bio-based content; low VOCs (satisfies CARB and

  • ther regulations)

Industrial components PTT for foams PE, EVA, and ABS for tubing ABS for advanced composites, PC for laminates, PP insulation Adding value through advanced manufacturing Using large-volume materials in unprecedented, underutilized, or difficult ways Containers, packaging, films HDPE, LDPE, PET, and PVC; PLA for disposables can’t be beat PLA’s low carbon intensity, potential for recycling and biodegradability make it best- in-class for disposable items

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A host of developers continue work to make an increasing slate of bio-based “drop-ins” available

Chemical End products Key companies Butanol Solvents, paints, butyl rubber, PET, fuels Gevo, Butamax (isobut); Cathay, MetEx, Cobalt (n-but) Adipic acid Nylons, resins, polyurethanes Verdezyne, Rennovia, BioAmber, Inventure, Genomatica Succinic acid C4 molecules, PBS, PBT, solvents, de-icers BioAmber, Myriant, DSM/Roquette, BASF/Purac Butanediol (BDO) C4 molecules, PBS, PBT Genomatica, LanzaTech (2,3-BD), BioAmber Butadiene Rubber, ABS Genomatica, Amyris, Global Bioenergies Isoprene Rubber GlycosBio, AE Biofuels/Zymetis, Amyris, Genencor, Global Bioenergies Propanediol (PDO) Fibers, polyurethanes, PTT, cosmetics DuPont, GlycosBio, Inventure, MetEx Acrylic Acid Coatings, adhesives, plastics OPX Biotechnologies, Itaconix, Novomer Furans Polyesters, polyurethane, fuels Avantium, Pennakem Terephthalic acid PET, plasticizers Draths, Avantium, Gevo

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Partnering on applications and accessing markets increases at a frenzied velocity

Substitutes

  • PLA, starch- based plastics

Drop-in Replacements

  • PE, PP, PET, solvents, polymers

Improvements

  • Spider silk, living materials

Products on market today Partner on applications & access to markets Butanol Adipic acid Isoprene Succinic acid Terephthalic acid Butadiene BDO PDO Acrylic acid Furans

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Brand owners are reaching down to stimulate development of bioPET and alternatives

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Gevo’s downstream partners create products in a range of fuels and chemicals applications

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Bio-based rubber gaining steam through a range of key alliances and joint development work

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Partnerships to commercialize relatively novel bio- based specialty chemicals are even more important

PBS

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Some still may be asking, “Is bio better?” Or worse: they assume/believe bio has nothing to offer them Others are making investments and thinking about strategic

  • pportunities to be met by bio-

enabled materials and processes

  • Large companies which desire

to maintain an edge should be mindful of extensive commitments in bio by the plalyers like …

Some of the bio-based hype has subsided – but there’s still plenty of buzz – and opps for growth

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The Bio-Based Materials value proposition

Biotech does takes time to develop, but has profound ways of meeting market challenges

  • Hedge against supply chain risk  cost savings
  • Add unprecedented value – bio-based lubricants, new

renewable/biodegradable/high performance

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Main Obstacles in Pursuit of Bio-based Drop-in Replacements

  • f Conventional, High-volume Polymers

Source: Lux Research Bridging the Divide between Demands and Bio-Based Materials, September, 2012

Top Drop-ins to Commercialize Main Obstacle Driver PS/HIPS Strain development for bio-based styrene Lower toxicity process (no benzene) PET Development, economic production Brand-owner competition PVC Economic production Lower carbon footprint PP Economic production route Bio-based content for personal care Eco-polyester Clearer communication of value proposition; supply chain certification More affordable alternative to virgin polyester EVA (Ethylene vinyl acetate) Viable routes from bio- based feedstocks Increased bio-based content; efficiency PE Cost parity with incumbent PE Increased bio-based content; efficiency

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Successful commercialization requires supply and demand coordination – and, it use to be, luck

Reliably forecasted demand item When nylon leggings were released, demand planning failed – leading to supplies falling short for years Experience with consumer products provided extensive

  • pportunity to

refine performance

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Allow processors and end-users to become familiar with a material – start with low-risk applications

Increasing risk More demanding specifications Larger addressable markets

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1954 – HDPE released into the market

  • Initial sales grossly disappointing; stocks piled up
  • Turn-around came from surprising source: hula hoops
  • By 1957, commercialization of PE extensive

 Aim for low-risk, but high-visibility application to build growth

Expanding horizons – learning from historical commercialization efforts: polyethylene

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Bio-based chemical industry innovation cycle

Feedstock development Conversion evolution Material availability Applications development Consumer demand Capacity expansion

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Overview

Applications are useful in structuring the bio-based chemicals opportunity Leaders partner profusely to access markets and applications expertise Bio-based materials value proposition is ringing more clearly than ever Lessons from history may accelerate bio-chemical commercialization

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Lux Bio-based Materials and Chemicals Intelligence: Planned State of the Market Reports

Report title Date Description

State of the Bio- Based Materials and Chemicals Space Q1 2012

Though many companies are targeting the same bio-based platform chemicals: succinic acid, adipic acid, butanol, terephthalic acid, isobutene, isoprene, BDO etc., these innovators are unique with respect to technology, business development, and maturity. To better understand the dynamics among start ups in this space, and rank each one against its peers, we’ll build Lux Innovation Grids, provide updates on partnerships and investments, and comment on trends and white spaces.

BBMC Capacity Update (& launch of BBMC Tracker) Q2 2013

Complete update on the scale and status of bio-based materials intermediates and chemicals. The comprehensive overview will include North America and South America, Europe, Asia, and developments

  • elsewhere. Landscape will include capital invested in plants, capacity in 2011, and projections to 2015,

2010, 2025, and 2035 under three scenarios (reduction in growth, sustained low growth, bio-based boom). Analysis will cover trends by region, feedstock, conversion technology, and relative to existing markets.

Pretreatment of Cellulose to Sugars (x-tag with AF) Q3 2013

Systematic evaluation of tech, costs and estimates, and business execution of companies, compared and

  • contrasted. We will pick the winners and losers, as well as highlight challenges and make clear the
  • pportunities.

Leading Bio-Based Materials and Chemicals Applications Q4 2013

Focus on applications that are winning the minds and hearts of end-users for having performance attributes above and beyond incumbents, particularly in bio-lubricants, bio-based plasticizers, personal care relevant products, and other bio-based materials and chemicals. Analysis will include an assessment

  • f commercialization success on these applications with lessons to be learned for rolling out applications

with other bio-based products.

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Features the leaders that bring science-driven innovation to market, coupled with proprietary analysis from Lux Research's world-renowned analyst team Keynotes from Nihar Patel (Toyota), John Hillenbrand (Owens Corning), Akira Nakaminato (Mitsui and Co.), and Christopher Roche (Eaton Corp) Over 40 Speakers (CEO’s, Presidents, & Vice Presidents) Tracks in: Energy & Environment Near & Far Electronics & Connectivity Near & Far Health & Nutrition Near & Far Invitation Only: visit www.luxexecutivesummit.com for more details

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Questions?

Kalib Kersh kalib.kersh@luxresearchinc.com 323.788.1037 (mobile)