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Think Bio-Based Materials Are Costly, Perform Poorly? Think Again.

Lux Innovation GridMajor companies including Toyota, Ford, Coca-Cola and Dell are developing — and already using — bio-based materials and chemicals in everything from packaging to car parts.

Stories like Ford teaming up with Jose Cuervo to make vehicle parts from the tequila producer’s agave plant waste make for catchy headlines and good PR for the companies involved. And using bio-based materials are generally better for the environment as they reduce the use of petrochemicals and can divert materials — like plant byproducts — from landfills.

But do they perform as well as their petroleum-based counterparts?

A new study from Lux Research says yes. Not only do bio-based materials and chemicals perform as well, they can actually perform better than petro-based incumbents and offer real business value to companies, the report says.

“With demonstrated performance benefits over petroleum-derived incumbents in uses from lubricants to personal care, opportunities exist for companies to utilize improved bio-based options,” said Ross Kozarsky, Lux Research senior analyst and co-author of the report, Hunting for Value and Performance in the Bio-based Materials and Chemicals Space.

The report analyzes six areas in which bio-based materials offer value and performance: advanced materials, adhesives, coatings, lubricants, personal care and cosmetics, and packaging. It also assesses the leading start-ups (see graphic) and strategic opportunities in each segment.

“Specialty chemicals, biopolymers, and advanced materials are all promising areas of technology development, but smart business execution is just as critical — so we set out to highlight downstream applications where these innovations offer concrete value propositions,” Kozarsky said.

Among the findings:

  • Mature lubricants space offers partnership and acquisition targets. Biosynthetic Technologies — placed in the “Dominant” quadrant — recently got a $115 million loan from the US Department of Agriculture, and would be a good fit for partners pursuing an established company generating products with existing market traction. Meanwhile, “Long shot” Altranex scores above average in technology and is a worthwhile acquisition target.
  • Environmental concerns drive coatings. Regulators are pushing to cut volatile organic compounds (VOC) in coatings, creating opportunity for diverse bio-based technologies that reduce or even eliminate VOC. In this space BioAmber is among the “Dominant” firms. Late last year BioAmber’s Sarnia joint venture, which produces chemicals from sugar instead of petroleum, began operating at commercial scale. Meanwhile, “Long shots” TopChim and Novomer boast promising technology.
  • Sustainability programs bolster packaging. Biopolymers offer niches for companies seeking sustainable packaging solutions in markets like the $6.2 billion market for petroleum-based PET in bottles, jars and tubs. Avantium is one to watch for its technology as much as for its partnerships with Coca-Cola and Danone. Micromidas is a “Long shot” for its catalytic process that may be quicker and simpler than incumbent methods.

The Lux Research report comes as an increasing number of companies are jumping into the race to bring 100 percent bio-based PET plastic to market.

Earlier this summer Toyota Tsusho, the Toyota Group’s trading arm, became an investor and corporate partner in sustainable technology company Anellotech. The companies declined to comment on Toyota Tsusho’s investment amount, but said it has been used to fund development of Anellotech’s Bio-TCat technology used to make bioplastics. This technology converts non-edible biomass into plastic-producing chemicals.

Anelloteh’s Bio-TCat process aims to enable 100 percent bio-based plastics to be produced at commercial scale — a target that has thus far eluded manufacturers. The market for bio-based PET is projected to reach $13 billion by 2023, according to a market research report.

Last year Coca-Cola and Virent produced the world’s first PET plastic bottle made entirely from plant materials — but at demonstration scale. Coca-Cola has been producing partially bio-based PlantBottle since 2009, a product comprised of 30 percent plant materials.

 

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