The bio-based chemicals and materials industry, carefully nurtured from labs to factories, has reached a tipping point and capacity will double in market potential to $19.7 billion in 2016, as its global manufacturing capacity zooms 140%, according to a recent report by Lux Research.
The global capacity for 17 major bio-based materials doubled to 3.8 million tons this year, but over the next five years will climb to 9.2 million tons, bringing critical scale to an industry poised to revolutionize the chemicals market, said the report, titled, “Global Bio-based Chemical Capacity Springs to Scale“.
“Several strong forces – consumer preference, corporate commitment, and government mandates and support – are driving development in this space.” said Kalib Kersh, Lux Research Analyst and lead author of the report. “For an industry with the scale of plastics, polymers, and chemicals, no business issue is as big as that of capacity. For bio-based alternatives to compete with petroleum, they have to match billion-dollar businesses producing at megaton levels,” he added.
Lux analysts tallied up the capacity of 151 identified global facilities and captured their intended operational dates, products and capacities, and added 87 additional facilities for which it made conservative estimates. Among Lux Research’s other key findings:
- Bioplastics steal the scene but will slow down. From 2006 to 2011, bioplastics have experienced explosive growth of 1,500% to a current aggregate capacity of 470,000 tons, and a 10.9% share of all bio-based materials. Expansion is expected to moderate, though their capacity will still grow 57% from 2011 to 2016.
- Cellulose polymers and starch-based plastics dominant. Cellulose polymers and starch-derived materials still rule because they are durable, strong and easily biodegradable: They’ve been widely used in high-performance plastic coatings, buttons and yarns, and even early LEGO bricks. However, their share of total capacity will slide from 45% in 2011 to 21% in 2016.
- Consolidation ahead. By 2016, there will be consolidation – both within sectors of bio-based materials manufacturing, and regionally, as leaders buy up technologies and access to feedstock. Momentum derived from existing capacity – ethanol from sugarcane ethanol being converted to ethylene and propylene, for instance – will influence regional specialization.
The report, titled “Global Bio-based Chemical Capacity Springs to Scale“, is part of the Lux Research Bio-based Materials and Chemicals Intelligence service.
Carole Jacques (Lux Research, Inc.)
Source: Lux Research, press release, 2011-12-13.