INSIGHT ARTICLE / 16 Feb 2018
Activities & Ambition in Advanced Biofuel and Bio-based chemical sectors
Year 2017 included a high degree of activity in advanced biofuel and bio-based chemical sectors with increased focus on lignocellulosic feedstocks. This was boosted by multiple drivers that can be divided in three categories; politically driven battle against climate change R&D/Innovation based commercialisation initiatives and market pull driven development of sustainable materials.
There was a number of new investment projects, particularly in renewable diesel and cellulosic ethanol, but also some major drawbacks with flagship plants. New bio-based chemical projects based on lignocellulosic feedstocks were heavily concentrated on precursors for bio-based plastics, more specifically bio-PET.
”The past year has witnessed several successes and failures in the field of biofuels and biochemicals. However, despite of unclear political horizon, there is both will and visions in this community that creates a positive climate and generates ambition to try to solve any unknowns": says Tom Lind, Vice President, Pöyry Industry Business Group.
During the last years, many globally well-known consumer brands have publicly announced different sustainability commitments and it is clear that these announcements have had positive impact on brand valuation. It is important for development to have good pull from the market which, in turn, supports investment decision making and building the future. Consequently, this pull boosts the technical and market development and increases the value of the business.
In order to meet European Commission targets set for traffic energy demand for increased share of advanced biofuels until 2030, the increase is 100-150 full size plants in 12 years – and can be considered as a major challenge for an emerging industry sector.
Not only from the investment volume point of view, but also the feedstock sourcing will be put under higher degree of competition. Technical challenges often arise in connection with the scale up of industrial concepts and the commercialization of new technologies requires time, resources and risk sharing.
“Announced projects in all segment push forward the technology and market development overall progress that finally contributes to sustainability, in the entire value chain from biomass to consumer products"; Tom Lind continues.
There are growing opportunities on the market. “Activity in this sector is gaining more attention every day, but good decisions require a combination of ambition and professional planning throughout the entire project life span, from early strategic plans to operational efficiency”; Lind concludes.
This topic was presented by Tom Lind, Vice President at Pöyry Industry Business Group, at the Lignofuels Conference in Amsterdam in February 2018.