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Bio-Based Materials and Chemicals Capacity to Reach 13.2 Million MT in 2017, Predicts Lux Research

March 6, 2014

Bio-based material and chemical (BBMC) technologies have reached an inflection point with companies scaling to commercial production levels and growing revenues, according to Lux Research. The leading growth category will be intermediate chemicals like adipic acid and lactic acid, with capacity growing from 2.0 million metric tons (MT) to 4.9 million MT in 2017, while the capacity of bio-derived polymers – currently at 1.1 million MT – will grow 18% per year through 2017.

"The basic science of bio-based materials and chemicals has advanced to the point that dozens of chemicals can now be produced from multiple feedstocks, at costs that are competitive with petroleum, at least in theory and at scale," said Julia Allen, Lux Research analyst and the lead author of the report titled, "Cultivating Capacity for Bio-based Materials and Chemicals through 2017." "As a result, bio-based material and chemical manufacturers continue to expand and diversify into new feedstock types, product types, and geographical areas.”

Lux Research analysts analyzed 229 sites from 217 companies, and 133 chemicals and classes like succinic acid and polyols in seven main product categories and 22 subcategories.

Among their findings:

• Specialty chemicals set for boom. Specialty chemicals like farnesene will grow at a compound annual growth rate (CAGR) of 46 percent between now and 2017.

• North America ranks fourth in global capacity, but will become a leader by 2017 as American start-ups like Gevo build plants closer to home. Europe's share of global capacity will drop from 37 percent in 2005 to 14 percent in 2017.

• Cellulosic feedstocks struggle. First-generation sugar/starch feedstocks – such as corn and sugarcane – will remain the dominant bio-based source. Cellulosic feedstocks will grow relatively slowly, and the rise of new sources like bio-oils and waste gas will help lower cellulosics' share from 67 percent to 27 percent.

The report, titled "Cultivating Capacity for Bio-based Materials and Chemicals through 2017," is part of the Lux Research Bio-based Materials and Chemicals Intelligence service.

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