the pha platform ...... extension and diversification - 6 april 2016

Fff The PHA platform ……

Extension and diversification

Jan Ravenstijn

6 April 2016

E-mail: [email protected]

Picture: Gehr Kunststoffwerk

Introduction Jan Ravenstijn 2

Experience: o 22 years Dow Chemical o 11 years DSM o 27 years R&D o 3 years Manufacturing o 15 years global R&D director executive positions in engineering plastics, epoxies, and elastomers businesses o 3 years USA and 4 years Germany o 3 years New Business Development Biopolymers platform at DSM

Current & recent activities: o Visiting professor Biopolymers at Eindhoven, Tsinghua and Dublin universities o Consultant to international (EU, US, Japan) biopolymer companies, biorefineries, OEMs o Consultant to investment and consulting companies o Completed an extensive global bioplastics review paper (January 2010) o Co-author of a bioplastics book for SMEs (Q1 2011) o Co-author of the global market studies of the nova Institute (Q2 2013 and Q2 2015)

Bio-based Materials Conference – 5-6 April 2016

T o p i c s

1. Introduction

2. The PHA product platform

3. Technology Push Market Pull

4. S.W.O.T.

5. Important lessons

6. Summarizing remarks

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1. A revolutionary change for the chemical industry

“At the beginning of the 21st century the chemical industry changes

from hydrocarbon-based to carbohydrate-based”

Small, but growing fast.

New platform chemicals are coming, but still have to prove themselves

succinic acid, levulinic acid, CO2 ……

Both, white biotechnology and chemo-catalytic conversion can be

exploited to the fullest.

4


1. Will plastics be de-coupled from fossil resources?

“The New Plastics Economy Rethinking the future of plastics”

This report was presented at the World Economic Forum in Davos in

January 2016 and focused on packaging.

Alarming starting point:

78 million ton plastic per annum for packaging in 2013.

Only 14% is recycled.

25 million ton/annum leaks into the oceans 1-2 garbage truck per

minute. This will be 3-4 times as much by 2050 if no behaviour

change.

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1. Plastics forecast growth in a “business-as-usual” scenario

6

6


Source: World Economic Forum report

1. Global flows of plastic packaging materials in 2013 7


1. Proposed approach

Circular economy: Increased prosperity The costs of debris and GHG emissions is estimated at 40

bn$, exceeding the plastics packaging profit pool.

Beyond incremental improvements.

New collaboration mechanisms Plastic packaging producers, NGOs, Legislators, After-use value chain.

Tasks: Eliminate the disadvantages: costs to society & environment.

Harness the benefits of plastics packaging.

Connect the developments of plastics packaging with the developments of after-use systems.

Thinking directions: Plastics never become waste.

After-use they re-enter the economy as technical or biological nutrient.

Plastic is de-coupled from fossil feedstock.

8


1. Ambitions of the new plastics economy 9


Source: World Economic Forum report

1. Some comments mentioned the W.E.F. report

Today’s biodegradable plastics don’t measure up against the

challenges before us.

Need complementary innovation efforts for bio-benign plastic

packaging.

Need strong collaboration in new and existing value chains and

including parties involved in the after-use chain.

It is expected that this major change takes time, and……

The PHA product platform is specifically mentioned as new

technology unlocking new opportunities.

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1. So, what about PHA?

The simplest member, PHB, appears in nature more than 3 billion years already.

PHB was first discovered in bacteria in 1888.

PHB and 3HB are part of the metabolism of many organisms energy storage & nutritional value.

In 1925 PHB was isolated and characterized for the first time.

In 1988 it gained academic interest at large scale I.S.B.P. focus on PHA co-polymers for property design.

Scale-up efforts in the 90s were not successful.

Currently >30 companies active in development, manufacturing and scale-up.

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2. The PHA product platform is very diverse…

scl-PHAs P3HB, P4HB, PHBV, P3HB4HB, PHB3HV4HV.

P3HB P3HB4HB PHBV

mcl-PHAs PHBH, PHBO, PHBD.

PHBH:

lcl-PHAs Many varieties possible.

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scl: short chain length mcl: medium chain length lcl: long chain length

In addition PHAs have been designed with aromatic or C=C groups in the side chain.

2. …that means quite different sets of properties

PHA products range from amorphous to highly crystalline.

They go from high-strength, hard and brittle to low-strength, soft

and elastic Large property design space for the PHAs.

The 3HA building blocks in PHA create sensitivity for molecular

chain scission (onset at 160 oC).

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3HA Content (mol%)

Me

lt T

em

pe

ratu

re (

oC

)

PHB

PHBV

PHBHx

PHBOPHBD

PHBHx

PHBO

3HA Content (mol%)

Cry

sta

llin

ity (

%) PHBVPHB

PHBO

PHBOd

PHBHx

2. PHA unique selling points 14

Although the PHA product family consists of a broad range of products, a combination of the following USPs is generally applicable:

Boosts brand image o GHG-emission

o No competition with food chain (Wave II or GHG feedstock)

o No GMO in feedstock

Very versatile biodegradability characteristics o Aerobic Industrial & Home composting

o Marine & Soil degradability

o Anaerobic digestion

Compatibility o No coupling agents or other expensive additives required in blends or composites

o Excellent physico-chemical properties (printing, sealing, dyeing, barrier)

Bioresorbable


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2. PHA product platform

PHA products need an improved cost/performance balance & more visibility further down the value chain for market penetration.

Current use: Mostly with other polymers Film, I.M., 3D-pr, adhesives, additive.

Sales: About 1 kt in 2013 Volume began to develop in 2015 Value chain alliances accelerate biz.

Capacity 2009 - 2015: 76 kt/annum in 2009 Planning for 920 kt/annum by 2015 ! 2015 capacity was 68 kt/annum

Promotion: Multiple applications also durable Replacing olefinics , styrenics, PET

Current product lines: At least 9 different product families Cannot (easily) replace each other


2. PHA applications …… an innovation promise

The PHA polymer family cannot fully substitute any of the fossil-based polymer families (like PE, PP, Styrenics, PVC or PET/PBT), but can partly substitute many of them:

The accessible market for PHA is very large

Depending on the PHA type and grade it can be used for injection moulding, extrusion (also film), thermoforming, foam, non-wovens, fibers, 3D-printing, paper coating, glues, adhesives, as additive for reinforcement or plasticization or as building block in UPRs for paints or in PUR for foam:

Application developments are embryonic or early-growth

PHAs can be used in most thermoplastic and thermoset market segments. Initial reports from the market indicate that it is beginning to develop:

Alliances further down the value chain create “Market Pull”

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2. PHA applications … some examples (1)

PHA compounds have been developed for injection moulding

applications. Industry claims processing cycle times to be

comparable to PP compounds in some cases. However, the

compound prices are quite different today.

PHA compounds for blown film have shown good properties and

are on the market today. Food contact approval, required for food

packaging applications, could boost the market penetration. The

potential is hundreds of kilotons per annum if the

cost/performance requirements can be met.

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2. PHA applications … some examples (2)

PHA is very suitable for binders and adhesives see the next

presentation.

One type of PHA has been approved by FDA to be used as an

implant material for medical applications fibers for e.g.

sutures.

The new Pharmafilter waste management process for hospitals is

based on using many plastic items that can be shredded to go

through the hospital’s waste water system, where anaerobic

digestion takes care of all organic materials, including the PHA.

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3. PHA players move to balance “Technology Push” with “ Market Pull”.

For many years several PHA technology developers promoted their

new technology based on:

environmental benefits

low carbon footprint and/or

biodegradability

without sufficiently understanding the need of the plastics market for

cost/performance-competitiveness. Beyond that environmental

benefits are important indeed.

Since the experiences of the last 10 years, capacities and capacity

expansions are done more cautiously:

Build demand before you build capacity

The last few years many alliances have been and are being formed

throughout the value chain.

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3. Alliances in the Value Chain. 20

Markets

Biorefinery

Technology platforms

Vegetable

oils

Natural

fibers

Polymer

additives

Bio Based

Building

Blocks

BiopolymersCompounds

Formulations

Plastic

parts

Ne

w v

alu

e c

ha

in

1. Feedstock 2. Bio-Based

Building Blocks

3. Biopolymer

production

4. Compounds

& Formulations5. Plastic parts 6. Markets

At all positions one looks for improved price/performance balance compared to today’s products, however … this is different for each position:

Raw material suppliers aim for increasing the value of their (waste) streams; Compounders and part manufacturers aim for good processing performance; OEMs (Markets) aim for new product functionality and/or good brand image; Consumers aim for biodegradability performance and environmental advantages;

Alignment of players in the value chain is an accelerator for success.


3. Will PHA companies bring compounds to the market? 21

“Most compounders do not properly process my PHA polymers, despite instructions on how to do it, so I decided to develop and to make compounds myself and bring those to the market” Source: CEO of an American PHA company

PHA companies who developed polymers and compounds: Bio-On (Italy) - scl-PHAs

Meredian (USA) - mcl-PHAs

Metabolix (USA) - amorphous scl-PHAs

Newlight Technologies (USA) - scl- & mcl-PHAs

TerraVerdae (USA, Canada) - scl- & mcl-PHAs


3. Bio-On is very active to form alliances 22

Markets

Biorefinery


Vegetable

oils

Natural

fibers

Polymer

additives

Bio Based

Building

Blocks


Formulations

Plastic

parts

Ne

w v

alu

e c

ha

in


Building Blocks

3. Biopolymer

production

4. Compounds



3. TerraVerdae broadened its PHA offering through a strategic partnership 23

Markets

Biorefinery


Vegetable

oils

Natural

fibers

Polymer

additives

Bio Based

Building

Blocks


Formulations

Plastic

parts

Ne

w v

alu

e c

ha

in


Building Blocks

3. Biopolymer

production

4. Compounds



Universities , Companies, Research Institutes

3. Newlight Technologies has multiple licenses and partnerships 24

Markets

Biorefinery


Vegetable

oils

Natural

fibers

Polymer

additives

Bio Based

Building

Blocks


Formulations

Plastic

parts

Ne

w v

alu

e c

ha

in


Building Blocks

3. Biopolymer

production

4. Compounds



BIOMER

4. PHA - Strengths

Versatile biodegradability, unlike most other bio-based polymers.

Can be fully based on renewable feedstock:

the choice of co-nutrients during production is important.

Can be bio-resorbable:

applications inside the body, energy storage for living organisms.

The platform has a very large design space for property tuning:

Thermosets and thermoplastics, can be crystalline or amorphous.

Good in-use heat resistance (like ABS) and hydrolysis resistance.

If biodegradability is a must, it’s very suitable for applications in a marine or sweet-water environment or if it ends up as debris in such environments.

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4. PHA - Weaknesses

Crystalline PHAs show very slow crystallization (like PP):

Long cycle times and post-crystallization, warpage. Additives

required to overcome.

Molecular chain scission above 160 oC:

Low melt temperature and low friction is a must during processing.

Longer side chains and lower crystallinity give products a larger

operating window.

Cost/performance balance not always competitive:

PHA prices still much higher than polyolefins, PET or

styrenics, but some PHA players claim cost/performance-

competitiveness, now or when at scale.

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27

Source: Paul Pereira – December 2014 Bio-based Materials Conference – 5-6 April 2016

4. PHA - Opportunities

Long-term the PHA manufacturing costs have to be about 1 €/kg at scale for large market access. The question is: “How?”

Extracellular fermentation of PHA polymers could be an important step among others for lowering the costs. Initial academic work needs further refinement and development.

A broad PHA product offering for meeting a variety of needs could give strategic advantages.

Excellent material for use in marine or sweet-water environments, but needs much application development work. Also, PHA containing debris in water would be much less of a problem:

There is no technology solution to compensate for a lack of

human discipline, though.

Strong alliances in the value chain, but also close co-operations in the after-use value chain will accelerate market penetration.

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4. PHA - Threats

Inability to bring the manufacturing costs down.

High polymer purity required for most, and food contact approval

for many applications.

Build demand before you build capacity, to avoid undesired

financial burdens.

Lack of competitive intensity for PHA product family members.

Underestimation of time it requires for certifications, registrations

and regulatory approval processes.

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5. Important lessons

Several PHA companies have had significant financial trouble due to

tremendous capacity under-utilization:

PHA market penetration has been very slow till now:

Cost/performance-balance to match market expectations:

Bring the after-use value chain on board as soon as possible:

Customers don’t want to be single-sourced:

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Build demand before you build capacity

Balance “Technology Push” with “Market Pull”

Environmental aspects are important beyond that

Consumers, NGOs, and politicians can accelerate when aware

Encourage some competitive intensity & supply security

6. Summarizing remarks 31

The PHA product platform becomes quite diverse: Crystalline & amorphous grades 9 product families For construction, adhesive, additive and thermoset applications

The market volume has begun to develop more significantly after years of struggling.

To bring a new polymer family in today’s plastic market requires strong alliances in the value chain.

Main challenges for the platform are to improve the product visibility to the end of the value chain and to demonstrate cost/performance-competitiveness to the market.

To fully benefit from the USPs of PHAs, the after-use value chain should be much more involved circular economy.


More detailed biopolymer and -monomer information ……

Please see the global database and the most recent global bio-based polymers and

monomers report of the nova Institute for product, production, market and company

details.

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the pha platform ...... extension and diversification - 6 april 2016

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