BIO releases report on renewable chemical progress, opportunities

By Erin Voegele | September 19, 2016

The Biotechnology Innovation Organization recently released a report documenting substantial, ongoing growth in the renewable chemical industry and outlining federal and state policies that support the industry.

The report, titled “Advancing the Biobased Economy: Renewable Chemical Biorefinery Commercialization, Progress and Market Opportunities, 2016 and Beyond,” notes that currently operating biorefineries feature a range of technology solutions to produce a variety of products beyond advanced biofuels, including commodity and specialty chemicals. According to BIO, industrial biotechnology companies are pursuing the production of these biobased chemicals and materials because they can be commercialized at a smaller scale and promise environmental benefits, stable costs and novel properties when compared to fossil fuel-derived chemicals.

The report cites data indicating there were $252 billion in sales of biobased products in 2012, with biofuels and plant extracts accounting for more than half. In addition, sales of renewable chemicals accounted for approximately 9 percent of the $2.82 trillion in worldwide chemical sales in the same year. By 2020, sales of biobased products are expected to account for 11 percent of the $3.401 trillion global chemicals market, with sales of biobased products reaching $375-$441 billion. Although biofuels and plant extracts are expected to continue to account for half of the projected sales of biobased products in 2020, the highest growth rates are expected to be in the sales of new biopolymers and renewable chemicals, biocatalysts and biofuels.

BIO’s report spans more than 80 pages and includes data and information on existing and proposed state and federal incentives and policies to support biobased chemical and product production. It also provides profiles of dozens of companies active in the biorefining space.

“The biobased economy is alive and well; it is not just about biofuels development. BIO’s new report released today on renewable chemical biorefineries illustrates the range of technologies currently undergoing commercialization in the industrial biotechnology space,” said Brent Erickson, executive vice president of BIO’s Industrial and Environmental Section. “Analysts predict rapid expansion of renewable chemical sales based on existing and planned production capacity, which for the first time has been catalogued in this report. Growing competition in the sector will assure manufacturers of a steadily available, high-quality and more sustainable supply of renewable chemical building blocks to replace petroleum in consumer products.”

“Continued federal and state policy support can help growth of the 21st century biobased economy. For example, with the support of Congressional leaders such as Senator Debbie Stabenow, D-Mich., and the Farm Bill energy title’s many champions—including Senators Roy Blunt, R-Mo.; Al Franken, D-Minn.; Charles Grassley, R-Iowa; and Amy Klobuchar, D-Minn.; and Reps. Collin Peterson, D-Minn.; Tim Walz, D-Min; and Dave Loebsack, D-Iowa,—the 2014 Farm Bill extended loan guarantee eligibility to biobased product makers and renewable chemical producers through the Section 9003 Program,” Erickson continued. “That program ensures renewable chemical producers can access necessary capital to build large-scale biorefinery projects in rural areas, creating new high value jobs and driving economic growth. The USDA under the leadership of Secretary Tom Vilsack also has been a leading champion for the renewable chemical and biorefinery industry.”

“Important policy drivers for the future include legislation that would create tax incentives for qualifying renewable chemical production and investments in biorefineries,” Erickson said. “Spurred by this draft federal legislation, a number of states, such as Iowa and Minnesota, recently enacted production tax credits for renewable chemicals that will help attract renewable chemical companies, build capital investment availability and speed commercialization.”

A full copy of the report can be downloaded from the BIO website.