Chapter 1: An Introduction to Commercializing Biobased Products: Opportunities, Challenges, Benefits, and Risks

Biobased products have been the next “big thing” for about two decades. Speak to a scientist or engineer in the field and you will hear a hundred reasons why investments should focus on products rather than fuels. Products have higher profit margins. The market volumes of products are more amenable to biobased feedstocks and biobased products. While biobased feedstocks are close to 50% oxygen, fuels contain very little oxygen. The oxygen content of biobased products such as alcohols, carboxylic acids and esters much more closely match the feedstock, and therefore, are more atom efficient. The editor has engaged in the field since 1999. While we have seen dramatic progress in commercialization since about 2013, production of biobased products are still orders of magnitude less than biofuels. While biofuels have received significant public support including tax credits, blending mandates, and state incentives, biobased products do not have mandates or economic incentives in the US.

Gasoline stations prominently display fuel prices at every major intersection reminding consumers (and voters) of the volatility of the energy markets. Ask your neighbor and they could probably tell you the price of fuel to three significant figures. Ask them what they pay for natural gas or electricity and they probably will be able to guess within a factor of three. Ask your neighbor about the embedded costs for the chemicals, materials, plastics, and solvents that are derived from the same fossil energy sources and they probably won't even understand your question. The simplest reason that we developed incentives for biofuels is that consumers are constantly reminded of the price of fuel. The original driver for biofuels incentives was to create a market for agriculture products, but public acceptance grew from constant reminders of fuel prices. Biobased products do not provide immediate and continuous price feedback so they haven't generated public support for policy incentives.

In this book we cover the opportunities, challenges, benefits, and risks of commercializing biobased products. As expected in a science and engineering series, we include chapters that consider feedstocks, conversions, and processing technology, as well as several potential products. There have been several books and journal issues dedicated to biobased products. Most of these publications have used experts to describe integrated processes to produce either specific biobased products or classes of products. Our intention is to expand the breadth of the reader's knowledge by considering supply chains, environmental impact, policy status, economic analysis, and a conjecture for a path forward. Therefore the aim of this book is to provide a comprehensive view of the state of the industry rather than the state of the technology.

In Chapter 2, “The Changing Landscape: a History and Evolution of Bio-based Products”, Petersen and Fitzgerald highlight the development and history of biobased products. The authors cover the growth of the industry and the range of end markets. The authors describe how changes in priorities along with advances in technology have created cycles of opportunity and deployment. They highlight the rationale and use of these materials and their expectations of growth. Petersen and Fitzgerald have both served as program managers at the Bioenergy Technologies Office (BETO) of the US Department of Energy (DOE). In that role they have been exposed to the emergence of the field and reviewed and monitored a major fraction of the cutting edge ideas and concepts in the bioeconomy. Petersen also led biobased products and bioenergy research programs at the National Renewable Energy Laboratory (NREL). In that role, Petersen was the co-author of the 2004 report “Top Chemicals from Biomass”, the most highly cited and impactful study of the field.

In Chapter 3, “Bioenergy Crops: Delivering More than Energy”, Negri and Ssegane indicate that much of the impacts of bioenergy and biomaterial cropping depend on how large scale deployment will occur. Designing production systems that purposefully incorporate sustainability objectives or ecosystem services along with the biomass feedstock is possible. The authors report the benefits of perennials over traditional row crops. Perennials such as switchgrass, miscanthus, other perennial grasses, and short rotation woody crops share a deeper root system, a general better ability to thrive on poorer soils, a lower dependence on fertilizer inputs, and at least for some, management options that can be friendly to wildlife. The authors indicate that they can design bioenergy landscapes that balance productivity and environmental performance, are socially acceptable and deliver much more than bioenergy and biobased products. Negri is a leader in sustainable bioenergy landscape design and has implemented phytotechnologies to improve environmental performance across the Midwest and Europe. She works closely with the DOE bioenergy technologies office on achieving sustainable landscape designs.

In Chapter 4, “Butanol Production by Fermentation: Efficient Bioreactors”, Mariano, Ezeji, and Qureshi use their work as an example of butanol production to describe microbiology and fermentation technology. Butanol is a valuable solvent and has potential as a biofuel. They describe some of the classic limitations to fermentation where product inhibition limits product yields and concentrations. Low fermentation concentrations increase energy use for product recovery. The authors describe novel bioreactors for butanol fermentation using different advanced fermentation systems such as free cell continuous, immobilized cell continuous and cell recycle continuous membrane reactors, and integrated continuous processes where product can be simultaneously recovered using energy efficient product recovery techniques. Ezeji and Qureshi have collaborated since Ezeji was a graduate student in the laboratory of Dr Hans Blashek of the University of Illinois Urbana-Champaign.

In Chapter 5, “Catalysis's Role in Bioproducts Update”, Magrini-Bair, Vardon, and Beckham define the major classes of reactions including dehydration, decarboxylation, decarbonylation, hydrogenolysis, esterification, and ketonization. The goal of most biomass catalysis is to create market value from oxygenated feedstocks and they present a crosscutting review of the progress over the past decade. Magrini-Bair leads a catalysis program at NREL and has collaborated with a range of academic, national laboratory, and industrial researchers.

In Chapter 6, “Separations Technologies for Biobased Product Formation—Opportunities and Challenges”, Singh, Kumari, and Datta indicate that separations technologies can contribute 50% to overall production costs. The authors identify and define key separations technologies platforms for producing biobased products. They focus on broad classes of oxygenated species. Within each separations platform they define the driving forces, the target species, the specific benefits and limitations. Before becoming a Professor in India, Datta developed his expertise in separations in the US where he received his PhD under Professor DB Bhattacharya (University of Kentucky) and as served as a postdoctoral fellow with the editor at Argonne National Laboratory.

In Chapter 7, “Lignin as Feedstock for Fibers and Chemicals”, Peretti, Barton, and Teixeira Mendonca indicate that because of its resistance to degradation, lignin has primarily been used as an energy resource in biorefineries. Lignin has about 60% excess energy and is available as a valuable carbon source. The authors focus on lignin structures that result from pretreatment technologies, and efforts to valorize that lignin through material property modification or depolymerization. The authors indicate that only 2% of available lignin is currently used in commercial products. Successful treatment technologies and broader classes of products are required for beneficial use of this resource. Professor Peretti is a leader in North Carolina State University's forest products research program. Forest products are a primary source of lignin.

In Chapter 8, “Update on Research and Development of Microbial Oils”, Liang discusses the opportunity for large-scale production of microbial oils. The author indicates that there are a broad range of oleaginous microorganisms including yeasts, microalgae, fungi and bacteria capable of accumulating intracellular oils or lipids. Two high-value products—arachidonic acid and docosahexanoic acid—have reached commercial scale. The author highlights key advances made in finding low cost and renewable materials for microbial cultivation, identifying ways to improve oil/lipid productivity either from a biochemical engineering perspective or through systems biology approaches. The author suggests applications beyond low-value biodiesel. Professor Liang, a microbiologist by training, has developed a research program in biobased products and biofuels that spans the pathway from strain development through efficient product recovery.

In Chapter 9, “Bioprocessing of Cost-competitive Biobased Organic Acids”, Lin, Hestekin, Henry, and Sather indicate that the high cost of product recovery is a major challenge to the production of organic acids. The authors highlight a bioprocessing method that integrates upstream bioconversion and downstream product separation into a continuous process. The bioprocess uses a membrane technology, resin wafer electrodeionization (RW-EDI), which results in a simpler bioprocess train with fewer unit operations, better pH control, reduced product inhibition from the organic acids, higher organic acid product concentrations and enhanced bioconversion rates and yields. They discuss the design and operation of the system and performance at the bench scale and pilot scale. The authors review the technical and economic viability for commercial production using the platform. The authors are long-term collaborators of the editor. Lin is an electrochemist with a long track record developing novel approaches for electrochemically-driven processes. Professor Hestekin, the editor's first postdoctoral fellow, has developed a crosscutting research program from strain selection through fermentation and product recovery.

In Chapter 10, “CO₂ Conversion to Chemicals with Emphasis on Using Renewable Energy/Resources to Drive the Conversion” Masel, Liu, Zhao, Chen, Lutz, and Nereng discuss the growing field of CO₂ utilization. The authors summarize two approaches: first, one in which hydrocarbons react with CO₂ to produce useful products; and second, one in which electricity from renewable energy is used to convert CO₂ into useful products. There is still more fundamental and practical work to be done, but it looks likely that both approaches will produce viable commercial processes within the next few years. While chemicals from CO₂ appear to outlie the core subject of this book, it is important to recognize that use of CO₂ achieves the primary goals of biobased products, decreases dependence on fossil carbon sources and decreases life-cycle greenhouse gas emissions. However, CO₂ utilization doesn't enable growth of markets from agricultural feedstocks, the other goal of the biobased supply chain. Masel is a well-established expert in CO₂ utilization. Before founding Dioxide Materials, he was a professor at the University of Illinois Urbana-Champaign, where some of his former PhD students went on to become members of the National Academy of Engineering.

In Chapter 11, “Methodological Considerations, Drivers and Trends in the Life Cycle Analysis of Bioproducts”, Dunn, Adom, Sather, and Han assess the relative environmental performance of bioproducts compared to their conventional (fossil-based) counterparts. The authors identify opportunities to improve bioproducts’ environmental impacts. The authors examine the application of life cycle analysis (LCA) including treatment of bioproduct feedstocks, conversion process analysis, and end-of-life assumptions. They highlight the significance of bioproduct end-of-life treatment. A critical issue in bioproduct LCA is treatment of co-products. The authors present results for life-cycle greenhouse gas (GHG) emissions and fossil energy consumption (FEC) for eight biobased products. With all biobased–fossil product comparisons, the biobased products exhibited lower life-cycle GHG emissions and FEC. The authors also consider life-cycle water consumption because of concerns about water consumption used to grow biomass and compare terrestrial feedstocks to algae. Dunn is a prime leader of bioenergy life-cycle analysis for the DOE Bioenergy Technologies Office. The team's work is a primary driver for assessing the impact of new feedstocks, conversions, and products in the bioeconomy.

In Chapter 12, “Design and Planning of Sustainable Supply Chains for Biobased Products”, Park, Yue and You present a mathematical framework to model and optimize a supply chain for industrial chemical products derived from biomass. The authors present a multi-objective, multi-period mixed-integer linear programming (MILP) model that takes various aspects of the supply chain into account. They highlight the significant decisions required for creating a successful supply chain and the impacts of location and seasonality. The model is presented to co-optimize economic and environmental objectives and includes a case study to verify its viable functionality. Professor You is a highly cited academic who has achieved an h-index of 31 within his first four years as a faculty member.

In Chapter 13, “US Government Bioproducts Policy ‘Watch What We Do, Not What We Say’”, Kozak compares past speeches, commissioned reports and press releases to applicable legislation. The author highlights the lack of legislative, regulatory, or spending frameworks necessary to implement the stated bioproduct policy. The author indicates that legislation allows government agencies to avoid purchasing bioproducts as part of their normal course of business in contrast to the goal of becoming a first adopter. The author also examines how the divestment of downstream refining by integrated petroleum majors prevented the US biobased products industry from creating an effective bioproducts policy on their own. Kozak is the co-founder of Advanced Biofuels USA, a 501(c)(3) non-profit organization focused on increasing the professional and layman's knowledge of the state and potential impact of the bioeconomy.

In Chapter 14, “Study on Investment Climate in Bio-based Industries in the Netherlands”, Dammer and Carus present a study of the barriers faced by small companies active in biobased economy when they want to acquire investment for their businesses. The study uses interviews and literature reviews and is focused exclusively on biobased chemicals and materials, not on food, feed or energy produced from biomass. The objective was to assess the investment climate for biobased industries in the Netherlands in comparison to other countries. In comparison to Chapter 13, the climate in Europe is quite distinct from the US and is partially a driver for the essay in Chapter 16. Carus is the Director of nova-Institute for Ecology and Innovation, the primary research institute highlighting the state of the European bioeconomy.

In Chapter 15, “A Monte Carlo-based Methodology for Valuing Refineries Producing Aviation Biofuel”, Blazy, Pearlson, Miller and Bartlett present an analysis relating uncertainty in market and policy conditions to their impact on the long-term economics of biorefineries. While some readers may not consider aviation biofuels as biobased products, the competition between land-based transportation fuels and aviation biofuels for feedstock and biorefinery capacity is very complementary to supply chain challenges in biobased products. The authors describe a methodology for analysing capital budgeting decisions and valuation under uncertainty for such investments and indicate that the methodology can be used as a decision making tool for investment decision timing. The authors employ a commercially available technology for producing aviation-grade biofuel and renewable diesel for the assessment with well-understood capital and operating costs. The authors evaluate how the distribution of net present values (NPVs) using a discounted cash flow model was used to determine the profitability of such a project over its economic life. They include price uncertainty and government mandates and report that price support policies are necessary to reduce the uncertainty of profitability to commercially acceptable levels. Blazy initiated this analysis at Massachusetts Institute of Technology based on analytical tools developed by Pearlson. The analysis was completed as part of a study by the Midwest Aviation Sustainable Biofuels Initiative (MASBI) in 2013. Blazy collaborated closely with the editor on this project and it served as a primary driver for Chapter 16.

In Chapter 16, “A Path Forward: Investment Cooperation between the United States and China in a Bioeconomy”, Snyder proposes that the US collaborates with China to build a binational biobased products industry. As highlighted throughout this book, the US has substantial technical expertise in the field but lacks the economic and policy drivers to foster the industry. Society needs in China change the risk profile for investment and could become the tool to promote partnering on joint projects in which the countries develop parallel supply chains without directly competing for product markets. Snyder served as Argonne National Laboratory's bioenergy technology leader for a decade where he was engaged in production technologies across the bioeconomy supply chain. He developed this idea by synthesizing concepts developed by the Henry Paulson Institute on cooperation with China on environmentally sustainable projects with analysis from MASBI on risk barriers to commercialization in the bioeconomy.

In Commercializing Biobased Products we present a comprehensive view of the history, feedstocks, conversion technologies, products, impacts, policy, and economics of the industry. We believe that this broad view will provide a useful tool for the reader to consider the entire process to realize this industry. Many researchers have dedicated their careers to growing the industry and have experienced repeated frustrations as promising technologies and products do not cross the “valley of death”. Success requires strong technology. Success also requires coherent policy that provides incentive to commercialize technologies and products that offer environmental and economic benefits to society.