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North America's Shale Gas Now Sweetening Bio Feedstock Pot

The bio-based chemical market has joined the army of sectors to benefit from the North American natural gas boom, an analysis by IHS Inc. has found.

Plant-derived feedstocks, including sugars and glycerine, have emerged as "economically competitive starting materials" for commodity chemicals because of a tight conventional feedstock supply, said the "IHS Chemical Special Report: Chemical Building Blocks from Renewables." Chemicals used in bio feedstocks include propylene, isobutylene, butadiene and isoprene.

The shortfall in the chemical building blocks has pushed some of North America's ethylene producers to switch from petroleum-derived naphtha to natural gas, which in turn has reduced the output of C3, C4, C5 and pyrolysis gas (pygas) co-products. Those co-products are the initial materials for chemical intermediates and polymers for, among other things, synthetic rubber used for tire production, and nylon 6.6, used for fiber production and automotive parts.

"Production capacity for renewable chemicals is significant, even though it accounts for a small share of overall chemical production capacity,” said IHS Chemical's Marifaith Hackett, lead author of the report. "In 2013, total annual production capacity for renewably sourced chemicals was approximately 113 million metric tons (mmt), including nearly 89 mmt of ethanol capacity."

Of the plant-based chemicals now used in commercial production, excluding ethanol, last year fatty acids accounted for close to half (46%) of total global bio-based chemical production capacity, followed by sorbital, 16%; glycerin, 14%; and fatty alcohols, 11%. Small-volume chemicals included lactic acid and furfural.

Capacity share varies by chemical, Hackett acknowledged. In some instances, bio-based chemicals accounted for only a fraction of total output. In other cases, the most used production routes relied on renewable feedstocks. For example, bio-based ethylene accounted for a "minuscule share of total production capacity. In contrast, the bulk of glycerin and fatty acid production depends on renewable feedstocks. In the case of glycerin and fatty acids, economics favor the bio-based route over the fossil fuel-based route," she said.

"As the process technologies for these chemicals evolve, the gap between bio-based and fossil-fuel based production costs is shrinking. The key is that, increasingly, processes based on renewable, starting materials provide a critical alternative source of 'on-purpose' production for certain chemicals that are in short supply -- like butadiene. Tire and rubber producers, in particular, want to ensure stable long-term supplies of the key chemical precursors for their products, and bio-based chemicals have the potential to address that need along with offering greater price stability."

Consumer demand and corporate sustainability initiatives also are driving the move toward bio-based chemicals, which usually have lower cradle-to-gate greenhouse gas emissions than their fossil fuel-based counterparts.

"Nonetheless, economics has a significant impact on demand," said Hackett. "Cost and performance considerations continue to outweigh sustainability in most corporate purchasing decisions. Some manufacturers are willing to pay a premium for the sustainability benefits and customer appeal, but performance of these renewable chemicals has to equal that of their fossil-fuel based equivalents."

Some of the biggest manufacturers in the world are getting into the bio-chemical arena. Archer Daniels Midland is producing propylene glycol from glycerine, a co-production of biodiesel production. BASF is using Genomatica's trademark technology to supply bio-based 1,4-butanediol, a spandex precursor. Cargill Inc., which produces sorbital and lactic acid, is developing routes to bio-based acrylic acid with Novozymes and BASF.

In addition, joint venture DuPont Tate & Lyle Bio Products is now manufacturing bio-based 1,3-propanediol, a starting material for fibers and engineering plastics, as well as an ingredient in personal care products. And while not yet at commercial scale, several tire manufacturers have formed alliances to produce bio-based synthetic rubber from bio-based isoprene or bio-based butadiene, according to IHS.

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