In-depth analysis of the European bio-based chemical market

Most countries and regions in the world are slowly changing the center of economic development from relying on fossil energy to sustainable development based on biomass energy. To achieve this goal, countries have begun to study bio-based chemicals and materials from various biomass sources. Bio-based chemicals and materials are a major focus of the future development of the world. In China, they belong to industrial biotechnology. With the continuous progress of bio-refining technology, the industry's raw materials are moving from petroleum raw materials to biomass raw materials; and industrial biocatalysis technology The gradual maturity of the organic synthesis of high energy consumption and high pollution has gradually replaced green and sustainable biosynthesis.

In 2004, the US Department of Energy (DoE) research pointed out more than a dozen basic chemicals that may replace fossil fuels or petroleum-derived chemicals, including carboxylic acids, isoprene, ethanol, Amino Acids, vitamins, and even industrial enzymes.

Consistent with this, industrial chemical applications and the rapidly growing agricultural applications in the form of biological pesticides and fertilizers are expected to dominate the BIO-based market. The consumption of fossil fuels and the deteriorating impact of hazardous chemicals on the environment have led to the growth of bio-based chemicals. The chemical products market is expected to grow from US$6.474 billion in 2016 to US$23.976 billion in 2025.

Inkwood Research's research report pointed out that the Asia-Pacific region is the largest bio-based chemical market and is expected to expand further in the next few years. The European region ranks second, and most of its markets are attributable to newly developed biorefinery technologies and the production of biochemicals. Among them, Germany comes first, followed by France, Britain and Italy. North America ranks third, mainly due to consumers' preference for environmentally friendly products and strong government promotion measures.

1. Bioplastics

Plastics are traditionally derived from petrochemical raw materials, but in recent years they have begun to transform to biomass plastics, which are made entirely or partially from renewable raw materials. Plastics can be divided into two categories-thermosetting plastics and thermoplastics. Thermosetting plastics can permanently maintain the shape of their molds, while thermoplastics can continuously reshape and deform. Both of these can be made of bioplastics.

Bioplastics can be further divided into three categories: (1) fully or partially bio-based and non-biodegradable; (2) bio-based and biodegradable; (3) fossil-based and biodegradable.

2. Polylactic acid (PLA)

PLA is a bio-based polymer produced during the fermentation of glucose into lactic acid in green plants. Mainly made into surgical implant and suture materials. Because of its advantages of renewable, biodegradable, recyclable and suitable for processing, bio-based PLA has many uses. On the other hand, it has slow degradation, weak toughness, strong hydrophobicity, and does not contain active side chain groups.

3. Polyhydroxy fatty acids (PHAs)

PHAs are linear polyesters produced by bacterial fermentation of sugars and lipids. It can be used to make many products, including films, coated paper and compost bags. It can also be used for injection molding to produce bottles and razors.

4. Vegetable oils

Vegetable oil is a triacylglyceride that can be used to produce certain polymers, mainly derived from soybean and Castor Oil. Especially castor oil derivatives can be used to produce brake fluids, waxes, polishes, soaps, lubricants and dyes.

5. Fatty acid (FA) and fatty acid methyl ester

Fatty acid derivatives are commonly used as surfactants in detergents, soaps and other personal care products. It and its by-product glycerin are very important for the production of biodiesel.

6. Biological lubricants

Bio-lubricants include vegetable oils or synthetic esters made from modified oils and mineral oil products. It is often used as a lubricant for power tools in aviation, shipping or automotive industries.

7. Biological solvent

Biological solvents such as limonene, ethanol, glycerol and 2-methyltetrahydrofuran are some of the most popular bio-based products. Biological solvents are much safer than similar products derived from petrochemicals because they do not emit volatile organic compounds. Typical uses of biological solvents include paint removers, glue removers and pesticide diluents.

8. Biosurfactant

Most biosurfactants come from vegetable oils (such as coconut oil and palm oil) and vegetable carbohydrates. These surfactants are the basic raw materials for many household cleaning products, such as detergents, soaps, personal care products, food processing materials, and agricultural cleaners.

9. Other biosynthetics

Biosynthetic products are synthetic rubber and commercial plastics made from renewable raw materials instead of petrochemical-derived raw materials. Biosynthetic end products include automobile oil, automobile tires, hair care products and cosmetics.

10. Ink and dye

As more and more people prefer to use plant-based inks instead of petrochemical-derived synthetic inks for printers and pens, bio-based inks and bio-based dyes are becoming more and more popular.

In 2019, the European Commission’s Joint Research Center released an important report detailing the potential of bio-based chemicals in the EU market, and predicted that from 2018 to 2025, annual production will maintain a 3.6% growth. In the report, experts described 10 key bio-based chemical products and materials, detailed their production and consumption levels in the EU market, their maturity, and the main driving factors and constraints for their future development. According to statistics, the total production of bio-based products in the EU is about 4.7 million tons per year, accounting for 3% of the entire market (that is, 97% of petroleum-based products). The market is diversified and large in scale, and there are differences between product categories. There are still obstacles in the development of the biological industry, such as production costs, but there are also great opportunities. New policy measures may help.

The report not only covers innovative bio-based products, but also bio-based products that have been produced for some time (such as turpentine, rayon, and cellulose acetate). The scope of this study is the EU market and therefore includes certain bio-based products produced in third countries and imported into the EU market. According to statistics, RoadToBio has developed a total of about 305 kinds of bio-based products, of which 208 kinds of products can choose a business model, the technology maturity level is ≥8, and the representative products are about 50 kinds.

Except for some special cases, such as vanillin and N-acetyl glucosamine, the product price is slightly lower than 10 Euro/kg. The price of bulk chemicals (such as platform chemicals and solvents) is usually around 1-2 Euro/kg, while the prices of more specialized products (such as cosmetics, personal care products and plasticizers) are usually higher.

According to chemical statistics from the bio-based platform, the turnover of the 28 EU countries is relatively low because of their low production and relatively low prices. In contrast, bio-based products close to the end user, such as cosmetics, lubricants, and man-made fibers, are more profitable.

The EU bio-based product market is diverse and there are significant differences between product categories. For example, solvents and platform chemicals account for a small proportion of bio-based products, while surfactants and cosmetics already account for a large proportion of bio-based products. Although bio-based platform chemicals are expected to grow rapidly in the next few years (compound annual growth rate of 10%), bio-based solvents are expected to grow much slower (compound annual growth rate of 1%). In general, the bio-based product market is still relatively small, with an average share of 3.0% in the overall market, and an expected compound annual growth rate of 3.6%. Only platform chemicals and adhesives have a CAGR higher than 5% during the forecast period. One of the important obstacles to development is high production costs. But this problem is less obvious in certain product categories, such as cosmetics and personal care products, and consumers are more willing to pay a premium.

Reduced environmental impact is often accompanied by higher costs. For this reason, people often think that the price of fossil products is low because they do not internalize the cost of environmental impact in the product. Experts believe that levying a fossil carbon tax is a way to create a level playing field for all products and promote the orderly development of those sustainable products.