Biobased products: Challenges and opportunities in the sugar industry Advances in bio-process conversion technologies presages a new dawn for the competitiveness of the sugar industry. This is largely because sugar is a superb feedstock for the production of range of products that are currently produced from non-renewable feedstocks. Before proceeding further it is worth defining biorefining and the enabling technology biotechnology. Arvind Chudasama arvind.chudasama@informa.com

Biobased products: Challenges and opportunities Introduction Definitions Market potential Policy issues Challenges Exploring, exploiting and commercialising Summary & conclusions

New dawn “In few years, sugar will be the new oil”. Steen Riisgaard, CEO, Novozymes A transition towards renewable bio-based feedstocks is vital for the production of chemicals, materials, fuels and energy to lessen dependence on fossil energy and achieve climate change goals. For companies like British Sugar these market changes will lead to further opportunities, bringing together scientific skills, process engineering and marketing.” Mark Carr, Chief Executive, British Sugar Group It is worth noting the observations of two key players in the biorenewables and sugar sectors, respectively, namely Novozymes and British Sugar. Novozymes is in the forefront of developing biocatalysts or enzymes to process feedstocks and British Sugar is arguably one of the most progressive companies in the global sugar industry. Their vote of confidence in the new opportunity expanding the competitiveness of the sugar industry is palpable.

Biorefinery processess as a foundation for a biobased economy The emerging biobased economy is underpinned by the biorefining opportunities to produce portfolio of products (food, feed, materials and chemicals) and energy (fuels, power and/or heat).It has to be stated though that the biomaterials/chemicals sector is the negelcted stepchild of industrial biotech as opposed to the biofuels sector. This presentation tilt towards the opportunities in the biobased products sector as lot is known about the biofuels sector, or rather has been more prominent. This is not surprising as the market for fuels is markedly larger than for the biomaterials/chemicals sector. In the farm bill passed in the US congress in May 2008, advanced biofuels sector was allocated $1 billion to support R&D, whereas the biobabsed products sector was cross-subsidised through a mandate to the federal agencies to purchase from companies in this sector when they could. Source: Langveld & Sanders (2010) in The Biobased Economy (Earthscan)

Market prices vs market volumes of biobased products It is equally apparent that economic values of endproducts from biomass conversion is significantly large. Relatively less knowledge intensive and high volume production of food/feed and bioenergy invariably attracts less premium than niche market products for the biomaterials and chemicals sector. To give a perspective on this, 85% of fossil fuels consumed globally is for energy applications while the petrochemical industry consumes the rest for variety of products such as plastics, fibres, detergents and adhesives. Source: Langveld & Sanders (2010) in The Biobased Economy (Earthscan)

Definitions

Definition Biorefinery is the co-production of a spectrum of bio-based products (food, feed, materials, chemicals) and energy (fuels, power, heat) from biomass [IEA Bioenergy Task 42]. The concept of biorefining is not new. The world is full of biorefineries. Doubtless those of you who are members of the drinking classes are invariably familiar with conventional biorefineries which produce beer, wine, vodka, rum, whisky et al. Of course, a sugar mill is also another one.

Comparison of the basic principles of a petroleum refinery and biorefinery Biofuels Fuels Petroleum Biomass It should be apparent that the modern biorefineries are based on the concept of petrochemical refineries. Biorefineries effectively unite technologies to convert biomass feedstocks into intermediates and final products. Therefore, biorefining is essentially embracing know-how gleaned from the petrochemical industry to produce bioenergy and biobased products. Biobased products Chemicals

Definitions Biotechnology "The application of scientific and engineering principles to the processing of materials by biological agents".  OECD Industrial (white) biotechnology Application of biotechnology for the processing and production of bioenergy and biobased products (chemicals and materials).   Red biotechnology is applied to medical processes. Green biotechnology is applied to agriculture. Blue biotechnology is applied to processes in marine and aquatic environments, (such as controlling water-borne diseases). It is worth stepping back and reconciling the definition of biotechnology. Principally the knowledge tools employed in the development of new molecules are grounded in biotechnotlogy. Europabio, the European Association of Bioindustries has expanded the definition of industrial biotechnology as the application of biotechnology for industrial purposes, including manufacturing, bioenergy and biomaterials. It includes the practices of using cells or component of cells like enzymes to generate industrially useful products.

Here’s an example of enabling biotechnologies employed by Ingenza to develop novel biocatalysts for treating feedstocks. The metabolic engineering toolbox employed by high tech companies effectively supports the production of useful chemicals.

Sugar derived platform chemicals   1,4-succinic, fumaric and malic acids 2,5-furan dicarboxylic acid 3-hydroxy propionic acid aspartic acid glucaric acid glutamic acid itaconic acid levulinic acid 3-hydroxybutyrolactone glycerol sorbitol xylitol/arabinitol (Source T. Werpy and G. Peterson (Eds 2004, DOE) The 2004 US Dept of Energy report identified twelve viable ‘platform chemicals’ that can be produced from sugars via biological or chemical conversions. The twelve building blocks can be subsequently converted to a number of high-value bio-based chemicals intermediates. Building block chemicals, are molecules with multiple functional groups that possess the potential to be transformed into new families of useful molecules for a range of endproducts such as bioplastics, resins, adhesives, carpets, detergents and solvents. The next slide shows one such example of the variety of end products a platform chemical could be effectively used for.

Market development – emerging applications for biosuccinic acid The company DSM produces a range of endproducts from the platform chemical biosuccinic acid they produce. These include food additives, biopolymers, pharmaceuticals, solvents and bioplastics.

Biorefinery concept Just note that the process conversion technologies used in the production of biofuels are also common place in the biobased products sector. Namely biochemical (enzymatic) and thermochemical.

Integrated biorefinery approach Just to recap biorefining embraces production of food, feed, biomaterials, biochemicals and bioenergy. The relatively seamless fit in the production of portfolio of products and energy suggests that given the access to sufficient biomass feedstocks, finance, access to required manpower there is no reason why agroindustrial complexes cannot be set up, if economics is sound. Later, one such complex in France will be highlighted. Source: Langveld & Sanders (2010) in The Biobased Economy (Earthscan)

Market potential of biochemicals Unlike the biofuels sector, biobased products sector is informed by a collection of niche markets which are significantly smaller, more controlled, difficult to penetrate and there is some uncertainty about consumer acceptance. The opportunities however abound as the next four slides will show.

Applications and market potential Chemical sales per segment 2007 100% = 1383 billion Euros [U$1914 billion] In 2007, the market for chemicals used in the production of fertilizer and gases, organic chemicals, polymers and fibres, adhesives and sealants, paints and coatings, food additives, other speciality chemicals, detergents, cosmetics and pharmaceuticals was some U$2 trillion.

Applications and market potential Sales of biobased products in 2007 was 48 billion Euros, 3.5% market share The fairly low market share of the biobased chemicals suggests there is a tremendous potential to wrest more share of the chemicals market. * Sales of chemical products made by biotechnological processes and not chemical processes Source: CEFIC Facts & Figures January 2009. Market study of FESTEL CAPITAL from May 2009

Applications and market potential In 2012 the market for chemicals is set to expand to some U$2.4 trillion. Source: CEFIC Facts & Figures January 2009. Market study of FESTEL CAPITAL from May 2009

Applications and market potential Sales of biobased products in 2012 is projected to be 135 billion Euros, 7.7% market share The biochemical sector is forecasted to double its 2007 share in 2012 while in monetary terms the takings are likely to be more than double the 48 billion euros. It is apparent that there is serious money to be made in this sector. * Sales of chemical products made by biotechnological processes and not chemical processes Source: CEFIC Facts & Figures January 2009. Market study of FESTEL CAPITAL from May 2009

Share of biobased materials and chemical capacity by region Source: Lux Research

Policy matters As ever and ever, government support to promote the inception of a new industry is vital.

Policy drivers Agriculture? Rural Development? Climate change? Environmental protection? Technology and Industrial development? ............? In a report published by Rabobank couple of years ago on biofuels, globally they identified 3 key policy issues driving the promotion of the sector. These were energy security, climate change/environment protection and rural development. In the west i.e. US and EU, the two key policy issues driving the government investment were energy security and climate change, whereas in developing economies it was energy security and rural development. As regards the biobased products, the inclusion of agriculture and technological development has a logical fit. The production of feedstocks requiring partnerships with farmers is clearly self evident. As for technological development, this is a high tech sector which no government in the west want to lag behind in. However, in the biobased products, as noted earlier, this emerging sector has not received as much government support as has been the case in the biofuels sector.

Labelling of biobased products launched by USDA On 19 January ’11, the US Department of Agriculture’s BioPreferred program announced that a final rule to initiate a voluntary product certification and labeling program for qualifying biobased products. This new label will clearly identify biobased products made from renewable resources, and will promote the increased sale and use of these products in the commercial market and for consumers. Through implementation of the BioPreferred program, USDA has already designated approximately 5100 biobased products for preferred purchasing by Federal agencies. The new label will make identification of these products easier for Federal buyers, and will increase awareness of these high value products in other markets. USDA estimates that there are 20,000 biobased products currently being manufactured in the United States and that the growing industry as a whole is responsible for over 100,000 jobs.

Feedstock development doesn’t have many suitors largely because it is more easier to patent technologies and secure income from licensing. Therefore, govt backed research institutions invariably provide key support in development of appropriate feedstocks. It is worth reminding ourselves that in the biorenewables sector the three distinct mutually exclusive segments are feedstock production, process conversion technologies and process engineering.

Not insurmountable challenges As an emerging economy, the biobased products sector certainly has its share of challenges.

Challenges As this slide from Novozymes suggests that as an emerging economy with no subsidies and competing with a well established petro-chemical industry the catch up period is going to be long.

To pursue this further, other challenges for being the new kid block include the issue of being competitive, technology developed being both reliable and scalable as well having desired properties. Just to expand couple of points here: one of the great difficulties of moving from lab phase to demonstration and industrial scale is that, while in a lab you can control contamination from wild microbes fairly well, this is simply not possible under industrial scale situations. At a conf I attended in April 09 at Lougborough Univ, it emerged that bioplastics are 4-times more costly to produce than conventional plastics and require additional processing to make it as functional as conventional plastics. For example conventional plastic film lets in less than 6 ppm of water molecules over a period of time as oppose to 300 ppm for bioplastic. Without additional layering shelf life , say of biscuits is likely to be very short.

Facilities and funding for projects Innovation and knowledge transfer Barriers to success Facilities and funding for projects Innovation and knowledge transfer Skills Public and commercial perception and awareness Connectivity and collaboration In a recently published report to UK government by the Industrial Biotechnology Innovation and Growth Team, they identified barriers in 5 key areas that need to be addressed for the successful uptake of the biorefining sector. It is worth going over these. Shortage of demonstration facilities, for example for fermentation following pre-treatment of biomass, for small companies is an issue as they find it difficult to acquire necessary capital assets. For example, the company Excelsyn developed platform chemicals for use in the pharmaceutical industry, but could not find appropriately equipped partners in the UK to scale-up and commercialise production and had to look for partners outside UK.

As an initiative to address this issue of shortage of demonstration facilities, EU supported Bio Base Europe was launched. It has received a funding of 21 million euros. This consists of a pilot plant and training center, both dedicated to the future of biobased industry. Indeed the central purpose of the pilot plant is to provide access to small, fledgling companies and research establishments who may not have access to financial resources to pursue next stage of development at the plant.

Bio Base Europe Pilot Plant Fermentation and biocatalysis equipment up to 10 m3 scale Green chemistry equipment up to 10 m3 scale Upstream and downstream processing equipment Plant fractionation Biomass pretreatment: steam explosion, acid/base hydrolysis Physical separation: filtration, centrifugation Evaporation Crystallization Ion exchange and electrodialysis Membrane separation: microfiltration, ultrafiltration The pilot plant facility hosts equipment for both upstream and downstream processing. Upstream Processing refers to the first step in which biomolecules are grown, usually by bacterial or mammalian cell lines, in bioreactors Downstream processing refers to the recovery and purification of biosynthetic products, particularly pharmaceuticals, from natural sources

The plant is located near Ghent, Belgium.

Quality R&D institutions needed Existence of quality R&D institutions that produce research outputs of potential commercial value that could be translated profitably is integral to the success of the emerging sector. Need to have access to institutions locally which are able to develop and supply the necessary workforce for the high tech sector.

Collaborative structures important Public acceptance of biobased products is one of the key drivers of the emerging economy. Underpinning this acceptance invariably requires winning over any doubts on the technological solutions to the economic and environmental challenges ahead. Collaborative structures need to be quickly developed between all the stakeholders, that is all those involved along the value and supply chains.

Exploring, exploiting and commercialising In the next few slides I would like to highlight some of the players involved the development of a range of biochemicals and couple of sugar companies who are realizing the opportunities made available to expand their competitiveness.

Major chemical corporations and researchers are busy developing biobased products.

As are small high-tech companies and research institutions.

The dynamic acitivity in this sector is evidenced by the announcements companies have made in the press. It should be quite apparent that sugar is the widely used raw material.

Sugarcane to bioplastic : Braskem In Brazil a leading company Braskem has embarked on producing bioplastics from sugarcane via the platform chemical ethanol.

Biorefining, reality at the agroindustrial complex at Pomacle, France At the agroindustrial complex in France which includes the sugar factory Cristal Union, the concept of integrated biorefinery alluded earlier is demonstrated here with verve.

Summary & conclusions

Biorefining