Dawn of a new biomaterial era
Agriculture has traditionally provided not only food but also countless other products. Now, 70 years after the synthetic era started, biomaterials have embarked on something of a turnaround. There are many opportunities for everyday products based on renewable resources, but the chemical industry and agriculture first need to overcome a number of challenges.
What’s the connection between a sugar beet and a bottle of soft drink? Your first thought might be the drink itself, although many soft drink producers have reduced the sugar content in their drinks. You may not be aware of another link between the two commodities, one that will become increasingly important in years to come: refined materials derived from sugar beet are used to manufacture soft drink bottles.
But wait – aren’t those bottles made from fossil resources? Certainly, but since the dawn of humankind agriculture has provided us not only with food but also with clothing (wool, cotton, leather) and packaging and building materials. After World War II the massive global investments in infrastructure for the extraction and use of fossil fuels brought about a radical change and signalled the start of what is now known as the 'synthetic era'. 'The oil industry was able to squeeze every possible use out of a drop of oil. People started producing huge amounts of synthetic materials including plastics, nylons and polymers', says Rabobank's Daan Dijk. He is responsible for the biomaterials supply chain in the bank’s Sustainability department.
Industries switching to renewable resources
In recent years, bio technology has been on the rise around the world, focused on the manufacturing of everyday products using renewable resources. Industries are using microorganisms such as yeasts and bacteria to convert components from biomaterials (including plants, trees, algae and food waste) into high-value materials. All plants consist of five elements: starches, sugars, oils, proteins and lignocellulose. In a biorefinery these constituents can be separated for further processing and can be used in animal feed, chemicals, food additives, pharmaceuticals, packaging and even the automotive and construction industries.
Sustainability and business
This change is occurring because industrial biotechnology has made big strides forward and because there is a strong demand from global consumer good companies, such as Ford, Ikea, Heinz and Nike. 'The production of synthetics is based on linear rather than circular processes. It means that people use a lot of resources that are not renewable and generate a lot of waste in the process. Biomaterials are far more efficient. Companies are making strategic considerations: they want to improve their returns while at the same time reducing their environmental footprint and securing the availability of raw materials', Daan Dijk explains. In turn, companies in agriculture, fisheries and forestry are using biotechnology to increase the value of their produce by extracting high-value components. Looking at the fermentation industry, tapioca could be the feedstock in Asia, corn in the US and sugar beets in Europe. Rabobank is involved in many of these cases, as it holds a solid position in key agri-commodity chains, such as those for sugars (tapioca, cane, beet), starches (grains, cassava), vegetable oils (palm) and proteins (dairy, meat, seafood, soy, algea).
Refineries near farms
A key issue for chemical companies is gaining access to competitively priced raw materials. Daan Dijk: 'Agricultural products contain a lot of water. From a sustainability and cost point of view it makes no sense to transport agricultural feedstock to existing chemical plants. This means we can expect more but smaller refineries, located closer to the farmers. And farmers have to organise their supply to feed a chemical plant that runs 8,000 hours a year. It's not without reason that chemical companies are increasingly turning to life sciences as their business focus. This is an all-new world for them: decentralised sourcing from a multitude of suppliers, with raw material quantities and quality depending on a variety of factors.'
'Agricultural products contain a lot of water. From a sustainability and cost point of view it makes no sense to transport agricultural feedstock to existing chemical plants. This means we can expect more but smaller refineries, located closer to the farmers.'
Giving the bio-economy a kick-start
With biomaterials being new and as yet largely unknown, businesses are having a hard time attracting venture capital. Many investors feel the technology has yet to prove itself, or market demand is uncertain or supply structures too precarious. Daan Dijk: 'Private investors and governments need to join forces and give the bio-economy a kick start. This requires a strategic industrial policy. Countries that create the proper conditions for the bio-economy are investing in a thriving new industry that creates jobs, reduces the carbon footprint and makes the economy more resilient.'
Rabobank is involved in finding solutions. Daan Dijk: 'We're familiar with agri food chains. We can bridge the gap between the chemical industries and farmers. We can suggest approaches that work, provide access to our networks and offer tailor-made financing solutions.'
Will biomaterials be compatible with global food security? Daan Dijk: 'Even if the biobased industry completely replaced petrochemicals, which is highly unlikely, only a maximum of five percent of the world’s arable land would be needed, leaving the remaining 95 percent for food production. On the other hand: bio chemicals do not need food crops and any surpluses in agricultural produce and non-edible parts of plants can be used for biomaterials. In my view the bio-economy helps to increase farm income per hectare. And, of course, more income for farmers increases food security.'