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Consumer Demand, Government Support Boost Biobased Products Industry

biobased-products-industryThe biobased products industry contributes hundreds of billions of dollars to the US economy while reducing millions of metric tons of greenhouse gas emissions, according to a US Department of Agriculture report.

The report says that in 2014, the biobased products industry contributed $393 billion and 4.2 million jobs — indicating that the sector grew from 2013 to 2014, producing an additional $24 billion over the previous year.

Biobased materials also reduce the use of fossil fuels and associated greenhouse gas emissions by replacing petroleum-based products. An example of this petroleum displacement is the use of natural fibers in packing and insulating materials as an alternative to synthetic foams, such as Styrofoam.

The USDA says the biobased products sector has the potential to reduce GHG emissions up to 10 million metric tons of CO2 equivalents in 2014.

“America has an appetite for everyday products — including plastic bottles, textiles, cleanings supplies and more — made from renewable sources, and that demand is fueling millions of jobs, bringing manufacturing back to our rural communities, and reducing our nation’s carbon footprint,” said agriculture secretary Tom Vilsack in a statement.

The report follows a recent $14 million investment in bioproduct technology firm Renmatix by Microsoft founder Bill Gates and global energy giant Total.

Renmatix’s Platrose technology converts waste biomass to cellulosic sugars, which then can be used as feedstock for chemicals and fuels. This process uses supercritical water instead of enzymes, solvents or acids and this reduces costs, thus making bioproduct production cheaper, the company says.

The USDA report echoes earlier market forecasts, which indicate the biopmaterials market is booming. A market research report says the $30.8 billion bioplastics market will grow at a compound annual growth rate of 14.8 percent from 2015 to 2020. A different report expects the biochemicals market will reach $84.3 billion by 2020, up from $49 billion in 2015, growing at a CAGR of 11.47 percent.

Victor Oh, who leads Lux Research’s biobased materials and chemicals research, says two major drivers — the government and the consumer — are driving biobased product growth.

“From the government side there’s a realigning aspect to an extended period of low priced crude oil,” Oh told Environmental Leader. “We see programs from the USDA and the Department of Energy shift focus to supporting higher value bioproducts as enablers for the near-term economic viability of the biofuels market. On the flip-side, there is a growing number of consumers that are starting to select brands and products based on their sustainability and source of materials. While it may not be a majority demographic, I think governments and corporations are reacting to that consumer market and realizing there’s also a real business opportunity for creating a more sustainable product.”

Oh said while multinational corporations will continue to be the major driver for commercializing biobased products, the USDA’s BioPreferred Program also creates opportunity for smaller manufacturers to gain exposure to large buyers. This program designates biobased products for preferred federal procurement and provides information for other buyers to select biobased products. The USDA says it currently has an online catalog of more than 15,000 products, of which 2,700 have been certified to carry the USDA Biobased Product label.

“Business savvy companies will first target opportunities where biobased materials and chemicals have a clear advantage over incumbents in performance,” Oh said. “For example, we see clear interest in areas like bioplastics, packaging and lubricants where materials with improved properties like tensile strength, biodegradability, or viscosity lead to better products with a justifiable cost premium. In the medium- to long-term manufacturers can target the larger intermediate chemicals market as scale drives biobased drop-in chemicals closer to cost parity with petroleum counterparts.”

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