1. The UK’s National Centre for Biorenewable Energy, Fuels and Materials NNFCC Developing Markets for Bio-based Plastics Opportunities and Challenges Dr Adrian Higson NEPIC Innovation Day 15 th November 2011 Ramside Hall, Durham

2. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Today’s Presentation I. About the NNFCC II.Bioenergy development III. Process options IV.Land for Chemicals V.Closing thoughts

3. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials An Independent ‘not for profit’ company Mission The NNFCC is committed to the sustainable development of markets for biorenewable products. We promotes the benefits of biorenewable energy, liquid fuels and materials for enhancement of the bioeconomy, environment and society.

4. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials NNFCC Operating Space Consultancy Member Services Advertising Renewable Raw Materials Technology Evaluation Supply Chain Analysis Market Evaluation Sustainability Assessment Policy Translation

5. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Mandatory EU target of 20% renewable energy in overall energy consumption by 2020 Renewable Energy Policy

6. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Area Central range for 2020 (TWh) Onshore wind24-32 Offshore wind33-58 Biomass electricity32-50 Marine1 Biomass heat (non domestic)36-50 Air source and ground source heat pumps (non domestic) 16-22 Renewable transportUp to 48 Others (including hydro, geothermal, solar, and domestic heat) 14 Estimated 15 % target234 In 2009, bioenergy accounted for 81% of all renewable energy utilization. The importance of bioenergy Biomass will be the dominate renewable energy source in 2020 Source DECC ‘UK Renewable Energy Roadmap’

7. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials A wide range of scenarios from many models give very different supply estimates because of differing assumptions A role for Biomass (Energy) Crops? Source: Slade, Gross and Bauen 2010: Estimating bio-energy potentials to 2050

8. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Complexity of biorenewables Adapted from Dornburg 2008, in Bioenergy – a sustainable and reliable energy source (IEA Energy, 2009)

9. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Biomass Value Proposition Increasing value Decreasing volume

10. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Politically Driven Consumer Pull Raw Material Flexibility Technology Push Market Dynamics Brand owner focus Environment Functionality Industrial Biotechnology Climate change Mandates/Support Volatility Hedging Future proofing

11. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Biomass Processing Options

12. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Biorenewable Chemicals and Polymers Market size ~ 50 million tones Fermentation Products

13. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Bulk Chemicals Fine Chemicals Materials Speciality Chemicals High volume, Low value Low volume, High price Specification Driven Function Driven Industrial Biotechnology Renewable Resources

14. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Plastics market UK Household Waste (2002)

15. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Reduce, Reuse, Recycle PreventionRe-useRecyclingRecoveryLand fill or incineration EU Waste Framework Directive 2008/98/EC

16. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Source: Nexant ChemSystems Fuel and chemical platforms Ethanol production ~ 60 million tonnes Ethylene production ~ 110 million tonnes

17. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Bio-based chemicals – growth potential Source: NNFCC

18. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Defining questions What’s the value proposition in bioplastics? –Function vs renewable content What does the environmental footprint look like? –greenhouse gas emissions, water impacts How big is the potential market opportunity/impact? –niche or mainstream –true rate of development What do the resource requirements look like? –Availability, price, impact on other markets How will technology develop? –Synthetic biology, perennial crops etc Time horizons 2020 2030 2050

19. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Land availability and use Global land area- 13.5 billion hectares Agricultural area- 5 billion hectare Arable area (crop land)- 1.5 billion hectares Technically, additional 2 billion hectares available for rain fed crop cultivation. However, what is the limit of sustainable expansion? What are the environmental and societal implications of expansion and land use change? Source FAO statistics Global land by use

20. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Chemical driven Political support for biofuel wanes Limited commercial biotech breakthroughs Industry based on arable crops Bioeconomy Political support for bioeconomy Biotech breakthroughs expand to chemicals Industry based on biomass & arable crops Biofuels stalled Current political support for biofuel remains Limited commercial biotech breakthroughs Industry based on arable crops Biofuel driven Political support for biofuel grows Biotech breakthroughs limited to biofuel Industry based on biomass crops NNFCC scenarios

21. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials ‘Scenario’ 2030 land requirements (no residue use) Plastic demand – 428 million tonnes Land availability – 250-800 million ha (Source FAO)

22. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Production regions Biomass crops in development Sustainable agriculture Established agri supply chains Strong technology base Limited political support Expensive to operate Agricultural sustainability? Land availability? Strong political support Access to growing markets Sustainable agriculture Established agri supply chains High residue availability Strong technology base Strong political support Established cultivation and processing Agricultural sustainability? Available arable land High crop yields (sugar cane) Good residue availability (bagasse) Good access to growing markets Large arable land potential Limited access to skills Limited access to markets

23. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Sustainability through supply chain control Round table for sustainable biofuel 12 Principles for sustainable production –Legality –Planning, Monitoring and Continuous Improvement –Greenhouse Gas Emissions –Human and Labour Rights –Rural and Social Development –Local Food Security –Conservation –Soil –Water –Air –Use of Technology, Inputs and Management of Wastes –Land Rights

24. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Closing thoughts There is insufficient land globally, to sustainably co-produce projected future demand for energy, liquid/gaseous fuel and bio-based plastics. Therefore, in the near and long term there will be competition for renewable raw materials. However all sectors will benefit from the market development, e.g. cultivation, logistical and technology developments. Sustainable production is a function of supply chain control not of feedstock or cultivation region. Efficiency requires integration - biorefineries

25. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials Assuming the energy potential of sustainable available land is used for fuel and chemicals then 20% of plastic substitution in 2050 is feasible. Carbon efficient production routes minimise land requirements e.g. carbon efficient fermentations such as succinic and lactic acids preferred over ethanol platforms. Market development will be slow, bioplastics are not biofuels. –Dependent on technology breakthrough –Dependent on financing –Supply chain development (producers, compounders, converters) –Not politically mandated Slow market development allows time for supply chain to develop and sustainable practices to be implemented. Bioplastics - Closing thoughts

26. NNFCC The UK’s National Centre for Biorenewable Energy, Fuels and Materials End of life/Raw material CO 2 Maximise value of biomass through carbon use in mateials Maximise the use of material at the end of life, recycle, recover etc Integrate production (material, heat and energy) where possible Energy & Material Synergy Cultivation Material Cycle Energy Cycle

27. The UK’s National Centre for Biorenewable Energy, Fuels and Materials NNFCC Thank you for listening Any questions? Join the NNFCC @ www.nnfcc.co.ukwww.nnfcc.co.uk Follow us on Twitter @NNFCC