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close this bookEco-restructuring: Implications for sustainable development (UNU, 1998, 417 pages)
close this folderPart I: Restructuring resource use
close this folder3. Ecological process engineering: The potential of bio-processing
View the document(introductory text...)
View the documentEditor's note
View the documentIntroduction
View the documentThe current situation: The status of biotechnologies
View the documentPotential and promises
View the documentMarket penetration by biotechnology
View the documentBarriers to penetration
View the documentFinal remarks
View the documentNotes
View the documentReferences

Market penetration by biotechnology

The processing of plant matter into final industrial products or consumer products is potentially much less environmentally burdensome than the processing of fossil fuels. The latter requires additional chemicals, resulting in a serious disposal problem. In particular, the pyrolysis process applied to plant materials generates no harmful wastes.

A decade age, virtually the only plant-matter-derived products on the market were adhesives and lubricating oils and a handful of intermediate chemicals. Today, plant-derived products compete in just about every major product category. They enter the market by displacing some petroleum-derived product in a portion of its market, and then gradually increase their market share. This is outlined in more detail in table 3.6. Fourteen product categories represent over 90 million of the 108 million metric ton (m.t.) commodity petrochemical market. In all cases, the prices of competitive big-products have dropped since 1985; for example, in the case of inks this drop was over 30 per cent.

Admittedly, most plant-derived consumer products are not yet competitive with their petrochemical counterparts. But the price premium for plant-derived products has dramatically diminished. Even when their costs are higher, plant-based products are gaining market share as a result of a combination of "green" consumerism and government regulation. A number of plant-based products have established their reliability and quality, not to mention environmental value. The cost of big-products should continue to drop and their market share should continue to expand. As table 3.6 reveals, the amount of these eco-products was projected to increase by over 5 million tons by 1996. This would almost double the amount of plant matter used for industrial purposes from the 1990 level. Detergents and plastics account for one-third of the projected market expansion.

Table 3.6 Near-term potential in the United States for plant-matter-based industrial products

Industrial product

Current production (million m.t. per year)

Derived from plants (%)

Cost (US$/kg)

Reduction in cost of plant based products (%)

Projected increase in plant-based products by 1996 ('000 m.t.)



1992

1996

Oil derived

Plant derived

Since 1985

By 1996


Wall paints

7.8

3.5

9.0

0.50

1.20

14

10

429

Special paints

2.4

2.0

4.5

0.80

1.70

3

5

60

Pigments

15.0

6.0

9.0

2.00

5.80

20

15

465

Dyes

4.5

6.0

15.0

12.00

21.00

25

20

405

Inks

3.5

7.0

16.0

2.00

2.50

30

10

315

Detergents

12.6

11.0

18.0

1.10

1.70

-

10

882

Surfactants

3.5

35.0

50.0

0.50

0.50

20

5

525

Adhesives

5.0

40.0

48.0

1.60

1.40

15

2

400

Plastics

30.0

1.8

4.3

0.50

2.00

-

50

750

Plasticizers

0.8

15.0

32.0

1.50

2.50

20

20

136

Acetic acid

2.3

17.5

28.0

0.33

0.35

5

2

241

Furfural

0.3

17.0

21.0

0.75

0.78

10

2

12

Fatty acids

2.5

40.0

55.0

0.46

0.33

5

5

375

Carbon black

1.5

12.0

19.0

0.50

0.45

10

25

105

Data sources: Chemical Marketing Reporter, Chemical & Engineering News; US Industrial Outlook, US Department of Commerce.

For example, inks based on soya oil first entered the US market in 1987. By 1991, 50 per cent of the 9,100 magazines and 75 per cent of daily newspapers were printed with soy-based ink. Aside from price, the key obstacle to the introduction of inks based on vegetable oils has been their slow drying time, which poses fewer problems in newspaper printing but more in magazine printing. This fact constitutes a significant technical challenge.

The interplay of public regulation, consumer sophistication, and private entrepreneurship has brought "biologicals" produced from renewable raw material into almost every major product category. Much larger markets can be achieved through concerted marketing and commercialization. Spurred by the surplus of agricultural crops, governments and some trade associations have targeted new market developments, focusing on those new markets as alternative crops that impact directly on the consumption of fossil fuels. Currently, the best return to biomass is available by displacing petroleum from high value specialty chemical markets. These markets tend to be very small except for half a dozen chemicals. About 90 per cent of all petroleum products are presently used as fuels, the fuel market is the most interesting long-term prospect.

Active research continues to develop processes for the conversion of lignocellulose to ethanol. Although potential margins in this area appear to be greater than in starch-based ethanol conversion, they are realized only if markets can be found for carbon by-products such as lignin or furfural. Unfortunately, given the disparity between fuel requirements and chemical markets, these by-products would saturate existing chemical markets even at relatively modest levels of ethanol production.

More than 20 oilseed crops are grown in the United States, with soybean dominating. About 1 million tons of vegetable oil are used as feedstock's for industrial products such as plastics, surfactants, adhesives, and lubricants, with prices varying from 32 cents per kg for sunflower oil to almost US$10/kg for jojoba oil. Table 3.7 summarizes the situation of oil-crop raw materials for fuels and industrial products manufactured in the United States (USOTA 1992; Robbelen et al. 1991).

Table 3.7 Yields and prices of potential and conventional oil-crop raw materials used for fuel and industrial production in the United States

Material

Crop yield (m.t./ha)

Oil yield (m.t./ha)

Oil price (US$/kg)

Important product categories

Bladderpod

10.0

3.9

-

Plastics, fatty acids, surfactants

Buffalo gourd

14.0

5.1

-

Epoxy fatty acids, resins, paints, adhesives

Castor

4.4

2.3

0.80

Dyes, paints, varnishes, cosmetics, polymer resins, big-pesticides

Coconut

11.0

8.0

0.46

Polymer resins, cosmetics, soap, pharmaceuticals, plasticizers, lubricants

Corn

34.0

7.0

0.62

Ethanol, fermentations, resins

Crambe

7.5

3.0

1.55

Paints, industrial nylons, lubricants, plastic, foam suppressors, adhesives

Cuphae

10.0

4.0

-

Surfactants, lubricants, glycerine, biochemicals

Euphorbia

9.0

4.5

-

Surfactants, lubricants, paints, cosmetics

Honesty (money plant)

10.0

4.0

1.53

Plastics, foam suppressors, lubricants, cosmetics, industrial nylon

Jojoba

15.0

8.3

9.60

Cosmetics, pharmaceuticals, inks, plastics, adhesives, varnishes

Lesquerella

7.5

1.8

-

Paints, lubricants, hydraulic fluids, cosmetics

Linseed

5.2

2.1

0.50

Drying oils, paints, varnishes, inks, polymer resins, plasticizers

Meadowfoam (limnathes)

11.2

3.2

-

Cosmetics, liquid wax, lubricants, rubber, higher fatty acids (C20-C22)

Palm oil

-

12.5

0.34

Fermentation products, soap, wax, tin plating, fuel processing, polymers

Rapeseed

10.0

4.0

1.30

Plastics, foam suppressors, lubricants, cosmetics, adhesives

Safflower

7.0

2.8

0.80

Paints, varnishes, fatty acids, adhesives

Soybean

9.5

1.9

0.40

Inks, paint solvents, plasticizers, resins, pharmaceuticals, adhesives

Stokes aster

9.0

3.9

-

Plastic resins, plasticizers, paints

Sunflower

5.8

4.3

0.32

Plastic resins, plasticizers, fuel additives, surfactants, agro-chemicals

Vermonia

7.5

1.7

1.60

Plastics, alkyd paints, epoxy fatty acids

Data sources: USOTA (1992); Robbelen (1992).

Stricter environmental regulations may provide attractive alternatives for stimulating the biomass industry by targeting environmentally friendly products. The costs involved can sometimes be internalized in the producer's economics. But, more often, they entail external social costs, which allows government to make the cost benefit analysis and provide incentive programmes.

In summary, chemicals from biomass, whether from new or from existing crops, face two major obstacles. The first is that high production entails competing for large-volume, low-margin markets. These markets tend to be volatile, as are the traditional feed/food commodities markets. The second obstacle is that high-margin products tend to have low-volume markets. Commodity chemicals have large markets and are usually low in costs, selling for US$1-3/kg. Specialty chemicals tend to have smaller markets (e.g. about US$56 billion in the United States) and command prices over US$4/kg.

Despite these obstacles, biomass-based commodities could eventually displace many petroleum-based products in the fuel and chemical markets, even without major price increases for petroleum. Obviously, the rate of market penetration would be increased if (or when) petroleum prices rise. The production of biomass-based commodities could potentially reduce dependency on non-renewable resources. Diversification into such areas also opens up new opportunities for the agro-forestry sector, at least where overproduction has been a problem in the past (as in Europe).