Vast Applications Presents Opportunity to Commercialize Industrial Biotechnology
In recent years, consumers have grown more and more conscious of the environment. The increasing demand for environmentally sound products is not limited to recyclable packaging and organic foods, but also specialty chemicals like cosmetics and fragrances. Thankfully there’s no shortage of key players in specialty chemicals either. These include BASF, Croda, Stepan as well as KLK Oleo (a subsidiary of Kuala Lumpur Kepong Berhad).
An emerging key player is P2 Science, a venture-backed company focusing on renewable specialty chemicals. They have developed a set of unique, highly intensified, process technologies for converting renewable feedstocks into high-value, specialty chemicals. These include fragrance and cosmetics ingredients.
P2’s approach relies on ‘Process Intensification’. By intensifying the process chemistry in producing specialty chemicals, it would ultimately allow manufacturers to maximize safety, capital efficiency, process control, and cost savings.
The 4 major market areas of P2’s products are:
- Cosmetics & Personal Care – Liquid polymers and specialty alcohols as fixatives, silicone replacements, and emollients in skin and hair care. These include liquid polymers that are fully derived from forest-derived terpenes using a clean, mild, and high yielding conversion process as well as a new class of petrolatum-like creamy gels and a new line of all-natural medium-high viscosity silicone alternates.
- Fragrances – Renewable carbonyls from fatty acids and terpenes for mint, floral, fruity and gourmand accords.
- Specialty Materials – Diacids and esters for renewable polymers. Liquid polymers for coatings, resins, and lubricants.
- Bioactives – Specialty acids for skincare. Terpene and fatty acid oxides for antifungals and preservatives.
What are Renewable Chemicals?
Renewable chemicals are essentially chemicals derived from renewable sources such as agricultural feedstock, agricultural waste, organic waste products, biomass, and microorganisms. Also referred to as ‘bio-based chemicals’, they have a lower carbon footprint and are used widely as a direct substitution of conventional petrol-based chemicals.
The applications of renewable chemicals are vast, ranging from industrial, transportation, food and beverages packaging, consumer goods packaging, bio-medicals, fertilizers, agriculture, textiles, environment, housing, recreation, and health and hygiene. They account for about 1% of the global chemicals market.
The most used renewable chemicals are either polymeric (such as lignin, hemicellulose, cellulose, starch, and protein) or monomeric (like carbohydrates, oils, plant extracts and amino acids).
Based on the chemical properties of renewable chemicals, they can be segmented into five different variants:
- Alcohols (such as methanol and ethanol)
- Polymers (such as polylactic acid or PLA, bio-based poly-ethylene and polyhydroxyalkanoates or PHA)
- Organic acids (such as formic acid, acetic acid, and glycolic acid)
- Ketones (a type of carbonyl, such as acetone and methyl ethyl ketone)
- Others (such as 1, 4-butanediol, 1, 3-propanediol, and Bio-BDO)
Zooming Into Specialty Chemicals
Specialty chemicals are chemical products that provide a wide variety of effects (depending on the respective industry sector). Some of the categories of specialty chemicals include cosmetic additives, flavours, food additives, fragrances, agrochemicals, surfactants, textile auxiliaries, adhesives, and much more.
Specialty chemicals are mainly used based on their performance or function. Industrial sectors such as food, cosmetics, automotive, aerospace, agriculture, manufacturing, and textiles are highly dependent on specialty chemicals.
Markets are Shifting Towards Renewable Chemicals
A lot of consumer products we buy and use daily are made from petroleum, natural gas or petrochemicals. Unfortunately, oil and natural gas prices are volatile in recent years. Coupled with the political instability of major oil-producing countries, the constant fluctuation of prices presents an ongoing challenge to manufacturers seeking to keep consumer goods at competitive prices.
At the same time, consumers are increasingly seeking products with natural or renewable ingredients, enhanced performance qualities, or environmental benefits. The use of biotechnology presents an opportunity to meet these consumer demands.
Biotechnology enables the use of renewable resources in the production of chemicals that are identical, drop-in replacements for petrochemicals. In many cases, the only difference between the petrochemical and renewable chemical is the stability of the price. In other cases, renewable chemicals provide enhanced formulation qualities.
Having that said, renewable chemicals represent an opportunity to commercialize innovative biotechnology applications because they are competitive on cost and performance in low-volume, high-value markets. In recent years, industry players are beginning to realize that capital investment costs for building small-scale renewable chemical production plants are often lower than setting up a bulk chemical facility.
Key Market Figures & Outlook
According to Research and Markets, the global market size for renewable chemicals was estimated at USD 60.3 billion in the year 2020 and is projected to reach a size of USD 87.8 billion by 2027, growing at a compound annual growth rate (CAGR) of 5.5% over the analysis period.
While renewable alcohols (like bioethanol and biobutanol) had the largest market share in 2013, the polymer segment has had the highest growth rate in recent years, mainly driven by growing demand for green packaging from the food and beverages and consumer goods sectors.
The specialty chemicals market is significantly bigger in terms of value. In a report by Fortune Business Insights, the estimated value was USD 627.7 billion in 2020. It is projected to reach USD 882.6 billion by 2028, exhibiting a CAGR of 4.7% during the forecast period.
Summary
Renewable chemicals are derived from renewable sources such as agricultural feedstock, agricultural and organic waste, biomass, etc. Renewable specialty chemicals provide a wide variety of effects (depending on the respective industry sector). Consumers are increasingly seeking products with renewable ingredients, and the use of biotechnology presents an opportunity to meet these consumer demands. P2 Science’s process intensification allows manufacturers to produce specialty chemicals while maximizing safety and cost-efficiency.
Sources:
- https://www.persistencemarketresearch.com/market-research/renewable-chemicals-market.asp
- https://en.wikipedia.org/wiki/Speciality_chemicals
- https://www.bio.org/sites/default/files/legacy/bioorg/docs/201104_rsc_food.pdf
- https://www.globenewswire.com/news-release/2021/07/23/2267859/0/en/Specialty-Chemicals-Market-to-Hit-USD-882-6-Billion-by-2028-Increasing-Demand-for-Novel-Compounds-in-Industrial-Applications-to-Propel-the-Market-Says-Fortune-Business-Insights.html
- https://www.globenewswire.com/news-release/2021/09/02/2290669/28124/en/Global-Renewable-Chemicals-Market-Report-2021-An-Uphill-Task-for-Producers-Forecast-to-2027.html
- https://p2science.com/about-us/
- https://p2science.com/technologies/
