Chemical Building Blocks from Renewables

Crude oil and natural gas are, and have long been, the primary feedstocks for the global chemical industry. But renewable feedstocks such as sugar (from corn or sugarcane) and glycerin (from vegetable oils) are beginning to challenge the dominance of fossil fuels as starting materials for chemical intermediates. Bio-based methanol, ethylene, propylene glycol, 1,3-propanediol, epichlorohydrin and other chemicals are now in commercial production; many other renewably sourced building blocks are in the developmental stage.

Demand for these bio-based chemicals—unlike demand for biofuels—is not regulation driven. At present, no government mandates or incentives explicitly encourage the substitution of renewably sourced chemicals for their fossil fuel–based counterparts. Customer interest in renewably sourced materials, particularly in the packaging area, is the primary demand driver. Many if not most publicly traded corporations now measure their impact on the environment and hold themselves accountable for achieving sustainability goals, such as reducing fossil fuel consumption or phasing out the use of problematic materials. In addition, several high-profile companies have made a public commitment to use renewably sourced materials as ingredients and packaging materials.

High-profile packaging innovations such as beverage bottles made from bio-based polyethylene or partially bio-based polyethylene terephthalate (PET) are creating markets for renewably sourced chemical building blocks.

Customers' thinking about renewably sourced materials is evolving as the range of bio-based chemicals expands and buyer familiarity with life cycle analysis (a standard method of evaluating environmental impact) grows. Life cycle analysis is a standardized method of evaluating the environmental footprint of a supply chain. Key metrics include greenhouse gas emissions (or global warming potential) and nonrenewable energy use. The cradle-to-gate analysis (or eco-profile) measures the product's environmental footprint from raw materials to the factory gate; the cradle-to-grave analysis measures its environmental impact in use (as a component of a formulated product or as a molded plastic part, for example) and at end of life.

The situation is evolving as the range of renewably sourced chemicals expands and buyer familiarity with life cycle analysis grows. In cradle–to–factory gate analyses, most renewably sourced chemicals compare favorably with their fossil fuel–based counterparts with regard to greenhouse gas emissions and nonrenewable energy use.

Access to cost-competitive plant-based starting materials is a key source of competitive advantage for producers of renewably sourced chemicals. As a result, bio-based chemical manufacturers are concentrated in nations with rich agricultural resources, including southern Brazil and the U.S. Midwest. Regions like the Middle East, which are rich in oil and natural gas but poor in agricultural resources, have little role in the bio-based chemicals sector (in contrast to their importance in the conventional chemical industry).

The following factors will influence the evolution of the bio-based chemical sector.

• Government support for biofuels in general and biodiesel in particular.
• Advances in renewable diesel technology.
• Restrictions on the use of food crops for fuel and other nonfood uses.
• Advances in cellulosic feedstock technology.
• Public attitudes toward genetically modified organisms.
• The development of improved process technologies that reduce production costs for bio-based chemicals.
• Applications and market development for new end uses.
• Qualification of drop-in replacements for conventional chemicals.

Although many bio-based chemicals remain in the developmental stage, several are fully commercial. In most cases, bio-based chemicals account for a small to minuscule share of global production; in a few instances, however, the mostly widely used production routes rely on renewable feedstocks. For example, "natural" lactic acid (made from sugar by fermentation) is the dominant commercial product; "synthetic" lactic acid (made from fossil fuel–based lactonitrile) accounts for a small share of consumption.

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