Chemistry goes green

IS GREEN chemistry ready for take-off? Delegates at a big conference on “industrial biotechnology” held near Washington, DC, this week by Bio, the industry’s umbrella organisation, seemed to think so. Industrial biotech uses agricultural feedstocks, rather than petroleum-based ones, to produce chemicals, plastics and fuels. McKinsey, a consultancy, says global industry revenues will grow from €116 billion ($170 billion) in 2008 to as much as €450 billion by 2020. The World Economic Forum reckons the coming boom in “biorefineries” will create new markets worth almost $300 billion by 2020.
Industrial biotech seems to have been relatively unscathed by the financial crisis. Codexis, an American start-up backed by Royal Dutch Shell, an Anglo-Dutch oil giant, pulled off a stockmarket flotation in April. Amyris, another American start-up, secured an investment of around $130m from Total, a French oil firm, this week and is likely to go public soon too.
In part, this is because big companies are embracing the technology. Frito-Lay, a maker of snacks controlled by PepsiCo, is adopting compostable crisp packets. Wal-Mart, the world’s biggest retailer, is expanding its use of bioplastics. Procter & Gamble, a consumer-products giant, recently agreed to use some biochemicals made by Amyris in its products. Craig Binetti of DuPont, a chemicals colossus, says his firm’s industrial-biotech sales soared from $50m in 2007 to $200m last year—and will grow to $1 billion by 2015.
Another reason industrial biotech is taking off, after several false starts, is that the technologies involved are now mature enough to be scaled up from laboratory curiosities to full commercialisation. “We’re not just dealing with vats any more,” insists Volkert Claassen of Royal DSM, a Dutch maker of food enzymes. This week the firm announced a joint venture with Roquette Frères, a French chemicals firm, to build a factory to produce a bio-based version of succinic acid, which is used in paints, textiles and coatings.
Similarly, Metabolix, an American firm, has set up a $300m facility in Iowa with Archer Daniels Midland, an agribusiness giant. DuPont has teamed up with Tate & Lyle, a British sugar firm, to build the first commercial factory to make propanediol (a chemical used in cosmetics, among other things) from corn instead of petroleum. And on June 28th Elevance, an American firm, announced a joint venture with Wilmar International, an Asian agribusiness giant, to build the world’s largest chemicals biorefinery in Indonesia by 2011.
Developing countries are emerging as major markets and sources of innovation for industrial biotech. Braskem, a Brazilian chemicals firm, has commercialised polyethylene—a commonly used plastic resin—made from sugarcane. It is now working with Novozymes, a pioneering Danish biotech firm, to repeat the trick for polypropylene, another common plastic. And Brazil’s ethanol industry, already the world’s biggest, wants to move from first-generation ethanol (made from sugarcane) to the next-generation cellulosic variety.
That Brazilian edge worries the American biofuels industry, and highlights the final factor now boosting industrial biotech: government support. At this week’s conference, for example, America’s Department of Energy announced $24m in funding for algae-based biofuels (on top of an existing $146m). But bureaucrats can bet on the wrong technologies. Brent Erickson of Bio observes that although governments are keenly promoting biofuels, most private investment in industrial biotech is going into other, less prominent areas.
And governments are too easily pushed into protectionism. An egregious example is America’s tariff ($0.54 per gallon) on imported ethanol, to protect domestic producers of corn-based ethanol. Marcos Jank, head of Brazil’s sugarcane association, took to the conference stage in a yellow, green and blue shirt. Asked if this was to show support for his country’s football team, he turned around to reveal the back of his shirt. It bore the number 54 and the message “cutthetariff.com”.

Source: The Economist