vor 2 Jahren

Issue 01/2016

  • Text
  • Bioplastics
  • Biobased
  • Products
  • Materials
  • Plastics
  • Automotive
  • Germany
  • Renewable
  • Applications
  • Biodegradable
Automotive Foam Basics: Public Procurement

Opinion Bioplastics

Opinion Bioplastics industry struggling to meet expected demand Avantium and Mitsui announced in December their plan to bring 100 % bio-based PEF (Polyethylene Furanoate) packaging to the Tokyo Olympics in 2020. This press release captures the importance of both partnerships and professional marketing in today’s bioplastic business. Today, bioplastics are generally sold at a premium compared to conventional plastics, and the current low prices of crude oil are not making the competition any easier. It is therefore of the utmost importance to build maximum exposure for the new products. The higher price of bioplastics for instance in packaging is compensated by added brand or product value. Major sports events are the candy shops for marketing professionals. The London Olympic Games in 2012 were broadcast to 220 different countries with over 3.6 billion viewers. The bioplastic industry has been able to get its fair share of the publicity. McDonald’s decided to use Novamont’s Mater-Bi bioplastic for the disposable foodservice packaging in their Olympic park restaurant during London Olympic Games. Rio 2016 has published sustainability guidelines encouraging the use of biodegradable compostable packaging for fast food outlets, and recyclable bioplastics for other types of packaging. The choice of event for Avantium’s and Mitsui’s launch was an expected yet very smart move. Along with the increasing media exposure, more and more brand owners are considering bioplastics as part of their sustainability programme. Shiseido plans to switch over 70 % of the polyethylene used in their domestic cosmetics containers from petroleum-based to bio-based by 2020. Procter & Gamble has announced replacing 25 % of their petroleum-based raw materials with renewable materials in all products and packaging by 2020. Also the Swedish furniture giant IKEA is planning to have all plastics used in the company’s home furnishings made from 100 % renewable and/or recyclable materials with the same schedule as Shiseido and P&G. These global brands are considered to be innovators in the adoption curve of bioplastics. We at Pöyry believe this trend of brand owner targets will expand from innovators to early adopters in the next ten years. Will there be enough supply to meet these targets? The market data of European Bioplastics forecasts that the production capacities of bioplastics will reach almost 8 million tonnes in 2019 with non-biodegradable bioplastics representing the major part of the growth. As a combined management consulting and engineering company we keep a tight eye on the development and realisation of investment projects. Today, we see some major challenges with the build-up of new bioplastic production. Much of the volume growth is counting on new bio-based PE, PET, PEF and PLA production. Braskem is still the only producer of sugar-based PE on the market with no announcements of new entrants. In addition, Mitsui decided to bury their bio-ethylene joint venture with Dow Chemical last October by selling all its shares of the company. On the positive side, SABIC launched a portfolio of renewable PE and PP in 2014 but the actual production volumes remain unknown. There is also an on-going debate whether these ISCC Plus certified renewable polyolefins can be marketed as bio-based products. The development of bio-based PET and PEF is going forward, but the production output is lagging behind The Chasm Innovators Early adopters Early majority Late majority Laggards 26 bioplastics MAGAZINE [01/16] Vol. 11

Opinion By: Henna Poikolainen and Juulia Kuhlman Pöyry Management Consulting Vantaa, Finland market projections. For instance, the largest biobased monoethylene glycol project to date – 500,000 t/a in Brazil by JBF Industries – has been put on hold and some sources expect it to be cancelled. There is a lot of activity in developing catalytic processes for bio-MEG but there will be little production available for P&G, IKEA and alike by 2020. The future supply looks more promising for PLA. Corbion succeeded in signing letters of intent for one-third of the 75,000 t/a capacity planned for their new facility in Thailand and decided to go forward with the investment. NatureWorks awarded the engineering contract of a new production plant in Southeast Asia to Jacobs back in 2013 but we are still waiting for news on the location. Press releases of new bioplastic projects paint a distorted picture of the supply volumes. Only few projects reach full capacity with the initially announced timing. New technologies, developing markets and exclusive partnerships make the bioplastics industry demanding, risky and timeconsuming to enter. Sustainable biomass sourcing with transparent traceability is a prerequisite for any collaboration with the major brand owners. Similarly to Corbion, many producers seek to secure major offtake of planned capacity prior to a final investment decision which prolongs time-tomarket. Project financing is rarely straightforward. Many bioplastics projects are risky investments even at high crude oil prices. It is challenging to convince investors of the profitability of capital intensive projects when the return on investment is dependent on a biopremium. The supply of bioplastics is expected to show double-digit growth for the next ten years, but the curve is unlikely to depict as exponential a growth as project announcements would indicate. Securing an adequate supply of bioplastics will be a major issue for the brands aiming to reach their targets by 2020. Most brands are unwilling to commit to a single supplier. There should be at least two or three certified suppliers to secure supply, but this is rarely the case in today’s bioplastic market. There is great variation in polymer grades and switching costs are still too high. Hence, bioplastic producers should not see new entrants as unwelcome competitors, but rather as a necessity for market formation. We foresee more and more partnerships with bioplastic producers and brand owners. Tight collaboration with brand owners can speed-up market entry and take the bioplastics industry to the next level. About the authors: Henna Poikolainen and Juulia Kuhlman are both consultants at Pöyry Management Consulting. Pöyry is one of the leading advisors to the world’s energy, forest and bio-based industries. In the past 5 years, the authors have been supporting clients e.g. in market entry, product portfolio and partnering strategies; in supply, demand and cost analyses; and in technology evaluation and pre-feasibility assessments. In 2015, Pöyry published a multiclient report “BioSight up to 2025” analysing the supply, demand and dynamics of the bio-based chemical business: www. bioplastics MAGAZINE [01/16] Vol. 11 27

bioplastics MAGAZINE ePaper