Bio-based products –

from idea to market

“15 EU success stories”

Written by COWI, Bio-Based World News EN

Research and
and Ecologic Institute
February - 2019
Innovation
ACKNOWLEDGEMENTS
Malene Sand Jespersen, COWI
Mette Dalsgaard, COWI
Alexandra Maratou, COWI
Lorenz Carl Wähler, COWI
Lucas A Bossard, COWI
Rasa Narkeviciute, COWI
Adriana R Ilisescu, COWI
Sára Demeersman Jaganjacová, COWI
Luke Upton, BBWN
Chiara Mazzetti, Ecologic Institute
Beáta Welk Vargová, Ecologic Institute

Bio-based products – from idea to market “15 EU success stories”

European Commission
Directorate-General for Research and Innovation
Directorate Bioeconomy
Unit F2
European Commission
B-1049 Brussels

Manuscript completed in February 2019

This document has been prepared for the European Commission however it reflects the views
only of the authors, and the Commission cannot be held responsible for any use which may be
made of the information contained therein.

More information on the European Union is available on the internet (http://europa.eu).

Luxembourg: Publications Office of the European Union, 2019

PDF ISBN 978-92-79-98486-0 doi:10.2777/305874 KI-07-18-113-EN-N

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For any use or reproduction of photos or other material that is not under the EU copyright,
permission must be sought directly from the copyright holders.

Cover page: © maxsattana/Fotolia.com; P.11: © Mater-Biotech – Courtesy of Novamont;

P.15: © Jan Noordegraaf, Synbra Technology; P19: © candy1812/Fotolia.com; P.23: ©
Norbert Suessenguth/Fotolia.com; P.27: © Arkema; P. 31: © Yaroslav Pavlov/Fotolia.com; P. 35:
© Biotrem by courtesy of Joanna Matyjek; P. 39: © Christian Kemp- Griffin taken by Cellu-Comp
team; P. 43: © Ecover Coordination Center N.V.; P.47: © Hanne Salonen, Eduskunta; P. 51: © Dr.
Shaul Lapidot, Melodea Ltd.; P. 55: © Paptik Ltd; P.59: © Repolar Pharmaceuticals Oy, Espoo,
Finland; P.63: © Jeremiah Dutton, Trifilon AB; P.67: © Marco Brons, Emmen & BioBTX, Groningen
 EUROPEAN COMMISSION

Bio-based products – from

idea to market
“15 EU success stories”
edited by COWI, Bio-Based World News and Ecologic Institute

Directorate-General for Research and Innovation

2019 Directorate Bioeconomy EN
 TABLE OF CONTENT

Overview 3

1 | Bio-based 1,4-Butanediol (bio-BDO) 11

2 | BioFoam® 15

3 | Carboxyline® CMI 19

4 | Desmodur® eco N 23

5 | Lipex® 27

6 | Rilsan® HT Rilsan® Invent 31

7 | Wheat bran disposable tableware 35

8 | Curran® 39

9 | Ecover All Purpose Cleaner 43

10 | Lumir® Spray 47

11 | Melodea CNC technology 51

12 | Paptic® bags 55

13 | Abilar® 59

14 | BioLite™ 63

15 | ICCP technology 67

2
 OVERVIEW
BACKGROUND AND POLICY CONTEXT serve as inspiration for investors, companies and project
promoters. The collection of 15 success stories should not
The bio-based sector is among the key players in the Eu- be seen as a selection of particularly remarkable successes.
ropean bio-based economy. It contributes to an innovative, Rather, it provides a sample of 15 successes selected with
resource-efficient and competitive society. The bio-based a particular focus on demonstrating successes for a range
industry in Europe is, however, still a fairly small and nascent of different products, applications and company types. The
industry under development. While the financial crisis and success stories are drawn from many EU Member States, and
periods of low oil prices constituted short-term setbacks to- providing a good selection of new and innovative products.
wards development, the bio-based industry appears to have
regained momentum in recent years. Many EU Member States A range of criteria underpins the selection of the 15 success
have, over the last 5–6 years, developed holistic approaches stories presented in this report. Thus, the aim has been,
to the bio-based sector, in particular in the EU-15. Sector among other considerations, to include different types and
specific policy frameworks further stimulate its development. sizes of companies, different product types and applications
and a wide geographical coverage across the EU. Moreover,
Demand-side developments are also positive. Investors and the intention was to present products that are innovative
consumers increasingly focus on environmental and health and fairly new in the market. Further, individual success
aspects of products; however, typically not at the expense stories should deliver on at least one of three key criteria of
of performance. While green investments and investments success. In order of priority, these criteria are a) profitability,
supportive of the U.N. Sustainable Development Goals (SDG) b) product on the market, and c) success in mobilising critical
are in high-demand, investors also continue to demand external finance. Further, the readiness of the companies in
that these be bankable. A recent study concluded that the question to participate was a necessary condition.
bio-based sector continues to face issues accessing private
capital1. Seen from the investors’ perspective, there may be The development of the success stories considers the history
different underlying explanations for this. Some investors of the product development from idea to market, it provides
may thus be new to the bio-based sector and lack the insti- descriptions of technology, product and feedstocks, and it
tutional history, tools, and staff to evaluate the potential of considers how funding has been obtained as well as the
these new concepts. More specifically, they may be concerned existing and potential markets. All success stories provide
about perceived long lead times from investment to profita- a simple SWOT (identification of Strengths, Weaknesses,
bility. For early-stage investors more comfortable with the Opportunities and Threats) and they identify the key drivers
above considerations, bio-based barriers and risks related of the observed success. The respective companies have
to feedstock, customer preferences, regulatory concerns been involved in preparing the success stories: A four page
and competition aspects vis-à-vis traditional products may description has been prepared on each of them. They have
exceed their risk tolerance. kindly provided data, participated in interviews, and they
have endorsed the final four page description. Each success
AIM AND METHODOLOGY story rests largely on the information provided by the com-
pany in question. In all cases, certain key information has
This collection of 15 success stories on specific products aims
been considered confidential by the company in question
to address likely investor concerns in the growing bio-based
and, thus, has not been shared. This applies for example in
sector. The success stories demonstrate the broadness of the
many cases to information regarding R&D costs, production
sector, and provide concrete examples of ‘bio-based concepts’
costs and sales information and forecasts. Consultations
that have succeeded in progressing from the early ideas to a
with four specific investors have supported the identification
final product placed on the market. Thus, the success stories
and development of success stories, for example in terms
serve to illustrate the potential commercial success for bio-
of providing feedback to intermediate lists of possible can-
based products. They serve to provide illustrative, concrete
didate success stories, in terms of explaining concerns and
examples of such successes, including: their development
issues of importance to investors, and in terms of providing
path, factors that enabled this success and risks compa-
reflections on what elements of a success story would be
nies were confronted with, and how these challenges were
of relevance to an investor, and hence relevant for inclusion
overcome. The sample of 15 success stories are intended
in the descriptions.
as a means to provide real-life, concrete examples that can

1
‘Access-to-finance’ conditions for investments in bio-based industries and the blue economy, Commissioned by DG RTD and prepared by InnovFin
Advisory/EIB, June 2017. 3
 PRESENTING THE GROUP OF 15 SUCCESS
SUCCESS STORIES PER PRODUCT TYPE
STORIES
General building block
Technology
While different in many dimensions, the success stories pre- or bio-polymer
Licencing
sented in this report share one key feature: they succeeded
in developing a product to a fully commercial level, or close
to that. The 15 successes presented here are thus successful
in the sense that they have progressed significantly in their
journey, and thus they have managed to overcome risks and Final product
challenges along the way including financial challenges. All
but two products are on the market today. For at least half of
the products, they are profitable today or they are expected
to become profitable in the near future. 2

The 15 success stories presented here originate in nine dif- Note: One product type per
ferent EU Member States: Material
success story.

SUCCESSSTORIES
SUCCESS STORIESPER
PERCOUNTRY
COUNTRY In terms of product type, the 15 success stories provide
Number of Success Stories examples of different types that can be categorised in four
1 3 main categories.

Further, as detailed in the table “Overview of the fifteen

success stories” at the end of this chapter, around half of
the success stories (seven products) in the sample have
benefitted from EU funding along their Research & Innova-
tion and/or commercialisation path, e.g. from H2020 funds
(including through the SME Instrument) or ESIF. Within these
seven success stories, six have been developed by SMEs or
micro-enterprises and one by a large company.
In the sample, within the success stories developed by SMEs
or micro-enterprises, it is interesting to note that six (see
above) out of nine have benefitted from EU funding, which
served to develop and/or to commercialise them and upscale
their production. EU Funding originated from ESIF in two
cases, from H2020 in three cases (two of which relate to
Note: One company is Israeli-based, but is partly owned by a
the SME Instrument), from FP7 in three cases and EIP in one
Swedish company and has received Horizon2020 funding. The case, with three of these products benefitting of EU funding
company is therefore shown once in Israel and once in Sweden. from two different funds.
In the sample, within the success stories developed by large
companies, only one benefitted from EU funding (from FP7)
Note: One company is Israeli-based, but is partly owned by a Swedish company and has received Horizon
They represent
2020 funding. different
The company is thereforecompany sizes:
shown once in Israel and 20
once % are micro-en-
in Sweden. as mentioned above. However, besides this, four of the five
terprises, 40 % are SMEs and the remaining are large com- large companies remaining in the sample received EU fund-
panies. About two-thirds of the companies have bio-based ing for their other R&I activities in the bio-based sector (i.e.
activities at the core of their business. 3 activities relating to other bio-based products than their
corresponding success stories). This funding was received
Most products described here are new in the market: Thus from H2020 (including participation in BBI-JU projects) or
more than half (8 out of 15) reached the market only in 2015, from FP7.
or later. It is thus assessed that 13 of the products are at
TRL level 9 today, or will reach that level in the near future.
The two success stories that rest on a business model in
licencing of their technology to third-parties are assessed
to be at TRL7, or to reach that stage very soon.

2
For the remaining ones, information on profitability has in most cases not been disclosed by the company in question
3
Here, we have applied a simple definition that defines company size solely in terms of the number of employees: micro: less than 10, SME: 250
4 or less. Small companies that are spin-offs of large companies have been categorised as large, as their challenges and modalities for financing
resemble more those of large companies.
 their internal access to R&D, market access and through
SUCCESS STORIES PER APPLICATION their internal vertical and horizontal supply chains. These
factors can also render them less vulnerable to external
Healthcare,
personal care Packaging risks such as financial crises and drops in oil prices. Thus,
the larger and consolidated companies included in this study
Construction material have been able to move forward in quite an effective and
efficient manner, as they have all overcome what is likely
the key challenge to them: obtaining internal endorsement
Lubricants,
and resource allocations for the project.
resins,
paints, Smaller companies, in particular new bio-based companies,
coatings, confront a slate of challenges that can prolong the lead time,
adhesivs, inks
making the journey towards a profitable business longer
Household and and less efficient. Challenges observed include: access to
professional finance, lack of skills in mobilising finance, market access
Moulded industrial cleaning
and knowledge and supply chain management.
and consumer products
Note: One application
per success story. Access to public national or EU level finance has often played
a role in mitigating these challenges, in particular during
In terms of applications, the products presented here pro- early stages. For many of the 15 success stories, EU fund-
vide examples of a wide range of existing applications. In ing has helped to overcome an ‘access-to-finance’ issue,
addition to existing applications, i.e. the applications that in particular, but not only, at the early stages. Further, the
currently constitute the core of the company’s sales, the ability to mobilise venture capital not only provides finance,
success stories often point to other possible future applica- but also involves access to knowledge and skills that help
tions and/or products. the businesses enhance their management teams. Another
key factor that can reduce lead time is partnering with one
The success stories presented in this report rest largely on or several entities. Partnering can help: overcome supply
information provided by the companies in question. Companies chain challenges, e.g. access to feedstocks and other inputs;
have also approved of the wider dissemination of the success increase production capacity; and ease market access. Pat-
stories. While the companies’ participation and readiness ents and IP arer important conditions to attract finance, and
to allocate time and provide data is highly appreciated, it hence to shorten lead time through mobilisation of finance.
should also be noted that factual information on sensitive
data was not shared by most of the companies. Price competitiveness. In most cases, bio-based products
were not price-competitive vis-à-vis the alternative traditional
GENERAL KEY INSIGHTS products. Drops in oil prices such as those occurring in the
2010s further accentuated this challenge. In the success
Looking across the 15 success stories, a number of interesting
stories, economies of scale are recognised by companies as
observations emerge that can inform on shared risks and
a key action to improve price-competitiveness, and many,
mitigation actions. These shared themes can be catego-
in particular products relatively new to the market, are at a
rised under four specific themes each of which is of possible
stage where they focus on this need to expand production.
interest to a potential investor: a) lead time from early
Raising capital to increase production capacity is one way
investment to profitability and returns from investments,
of meeting this challenge and some of the companies that
b) price competitiveness as an indicator of how the product
face this challenge have succeeded in this already. Others
performs in competition with other products, c) attitudes and
find themselves at the conflicting stage where additional
perceptions of customers and product performance providing
capacity is required to reduce costs and attract more cus-
an indicator of the market’s recognition of the product and/
tomers, but increased customer sales are required to justify
or the willingness to pay a so-called ‘green premium’, and
capacity expansion. Another remedial action observed was
d) owners role in making it happen. The four themes relate
to partner up with others whereby costs can be reduced, e.g.
to areas that are likely to be relevant to potential investors.
through outsourcing elements of production.

Lead time. There is often a considerable lead time from

Attitudes and perceptions of customers and product
the early investment to a break-even point as a profita-
performance. Perceptions and attitudes of customers are
ble business. Typically, lead times can extend to 10 years
a challenge at the later stages of the development path. Put
or more. Larger and consolidated companies can typically
simply, customers must be willing to pay the higher price for
mitigate this risk through their mere size, financial robust-
the bio-based product compared to the traditional product. To
ness and capacity to mobilise finance, as well as through

5
 some extent, the success stories demonstrate that this market — Willingness to invest own time and money. This investment
barrier is diminished by end-customers and brand-owners is possible in larger consolidated companies, once a strategic
increasingly being aware of green and sustainable product decision is taken to pursue the opportunity. The companies
features. Still, price remains a main consideration and a then provide the finance and RDI capacity internally. In smaller
decisive factor in succeeding in the market and achieving companies, it is typically the owner(s) and founders that
significant sales volumes. Success stories demonstrate that invest their own time and expertise in the development and
product performance is an important element in meeting mobilise financing from private loans or savings.
this challenge. Companies thus work continuously to improve
the performance of their product, to identify and to target — Partnering along the value-chain. Co-development is a
market segments that recognise the performance attributes commonly observed way to accelerate the development,
of the product. hedge or share risk and reduce the need for finance. Co-de-
velopment can be with a technology provider, feedstock
Owner’s role. Last, it comes out clearly throughout the 15 supplier, technology user, or traditional research institutes.
success stories that a key success criterion for many smaller, The outsourcing of production combined with proper IP pro-
new companies is the dedication, commitment and knowledge tection can be a way to reduce investment needs related to
of the founders. Ideas that later developed into a business upscaling the production. Two of the success stories are on a
have often been conceived by the founders e.g. in an R&D business case that rest on a licencing concept. This reduces
community, or in a previous employment developing similar the financial needs, as the product is the licence to use the
yet fossil-based products. Their commitment and willingness technology and not the resulting product per se.
to invest own resources and time, and their specific knowl-
edge and networks, are factors that have played a crucial — In SMEs and micro-enterprises, the mobilisation of a stra-
role during early stages. The latter may include technical tegic external investor is often a key factor to mitigate the
knowledge, customer knowledge, market knowledge, supply risks related to production capacity and finance in particular.
chain networks and own financial means. Such investors often bring finance together with expertise
and invest against a stake in the company. Examples of
Along the same line, many success stories also demonstrate such investors include angel investors, venture capitalists
a development path along which hard choices are made. and existing industries active somewhere along the value
The ability and willingness to re-orientate and to change chain. Once mobilised, the involvement of such investors
or narrow the scope often plays a vital role in maturing a helps to attract further financing.
product towards market entry. This need can arise because
of, for example, external events (i.e. oil price developments), Feedstocks. Stable supplies of feedstock in sufficient quality
signals from the markets (which segments recognise the and amounts are crucial to a successful development from
product and demand it) and regulatory costs (e.g. in regards idea to market. The 15 successes demonstrate that this
to obtaining necessary approvals). theme is often an integral and important component of the
phase in which the technology is developed. It is also an
KEY INSIGHTS ON RISKS important theme when reaching the stage to scale up the
production. In this later phase, it is not uncommon that the
In elaborating the 15 success stories, a particular focus has companies engage into agreements with specific suppliers
been on understanding the specific risks that the journey of feedstock or raw material. The sustainability of feedstock
from idea to market was confronted with and how compa- and the costs of feedstocks are also factors that contrib-
nies responded to these risks, and on understanding what ute to the risk picture. Compared to fossil-based products,
particular factors can be seen as the key drivers of the sustainability is an important attribute that the bio-based
observed success. The observed risks may be categorised products offer. It is therefore essential that customers are
under three main headings: satisfied with the sustainability features of the product.
To that end, most of the success stories demonstrate a
Technology, production and finance. The appropriate continuous focus on improving and documenting the sus-
technology and a sufficient production capacity are crucial tainability of feedstocks, e.g. through aiming to substitute
factors to achieve success in the market. The success stories existing feedstocks by more sustainable ones and through
concern new technologies or processes. Hence, they involve a obtaining specific certifications. Furthermore, many success
significant uncertainty and risk. This makes it in turn difficult stories involve a shift in feedstock along the development
to attract the necessary finance. The success stories have path: with the aim to improve product performance and to
overall mitigated this risk through several means: reduce production costs.

6
Price competition and market. The higher price of bio- real interaction with potential buyers provides market feed-
based products compared to the fossil-based alternative is back that is often used to re-orientate and sharpen the
often an important risk to achieving success in the market. business case: towards segments where there is volume,
Mitigation actions observed are manifold and include efforts price competitiveness, and recognition of the performance
to reduce production costs: improving technologies, processes of the product. Many of the success stories concern products
and feedstocks, and upscaling of production. In terms of sales, or technologies with wide potentials, but where the market
the bio-based products may be confronted with a market interaction leads to a narrower or more strategic focus in
that is conservative, skeptic and well-established. Here, the terms of product, application, market and/or geography.
success stories demonstrate a strong benefit from owners From the investor perspective the wider potential remains
or management with a past track record i the sector: such however an attractive feature.
as experiences from teaming up with consolidated players
in their go-to-market strategy, and a focus on co-develop- Partnering is seen across most of the success stories in
ment of for example show-case applications together with many forms. Commercial partnerships may be along the
possible customers. The latter can also help to demonstrate supply-chain, with for example feedstock providers, technol-
superior performance features of the bio-based product ogy providers, users and customers. Financial partnerships
compared to the fossil-based product, which can partly offset can provide finance and knowledge and such partnerships
the price differential to customers. Another mitigation action may be with an industry investor, possibly combined with a
is concerned with identifying and targeting market segments commercial partnership, or with for example venture capital
(applications, customer segments, product types) that are investors.
less cost-driven. The performance/price ratio of the product
needs to appreciated in the market in order to deliver results. Strong and dedicated management teams. The manage-
To that end, the success stories demonstrate approaches ment team has a crucial role to play in successfully taking
such as general awareness, collaboration with advocates the product to the market. Management teams need to
(e.g. bloggers) and investments in obtaining certifications include strong skills in commercialisation and mobilisation
to document the sustainability features of the product and of finance. Companies have to that end contracted additional
its feedstock as well as documentation and approvals to management team members, succeeded in establishing col-
demonstrate performance aspects. laboration or joint ownership with active professional investors
or contracted specialist assistance from the outside. From
Other risks. The demands of existing legislation for prod- the investor perspective, the attitude, personalities and clear
ucts in contact with food can be costly to comply with in visions of the management, including their commitment and
particular for smaller companies. In some cases, the absence willingness to make hard choices are key factors to provide
of a common regulatory framework makes it cumbersome an attractive investment opportunity.
to enter different EU markets. In general, a stronger glob-
al or regional regulatory push in support of the bio-based Ability to mobilise the necessary finance is a determining
products could support an accelerated development of and factor in all success stories. Larger and established com-
increased market for bio-based products and reduce the panies tend to succeed in mobilising the necessary finance
possible competition from ‘fake’ bio-based products. Most from internal sources. SMEs and micro-enterprises on the
of the products covered in the success stories are patent other hand depend on the ability to mobilise external finance.
protected. However, obtaining patents is costly and resource Strong business plans, the mindsets, attitudes and skills of
demanding, and this can constitute a constraint to smaller management and owners are factors that have successfully
companies: one of the success stories thus has no patent convinced other investors of the feasibility of their products.
in place for its product. Such investors are not however passive investors such as
banks, but rather for example venture capital funds and
KEY INSIGHTS ON DRIVERS OF SUCCESS industry investors.

Across the 15 success stories, the key and most common Patents as a crucial means of ensuring that one will capi-
drivers of success include: talise on the investments made. Patents thus help to protect
founders’/owners’ future possible profit streams, and patents
A strong and market-oriented business case and early are therefore also crucial to investors.
interaction with the market. The move from innovation to
commercialisation often builds on a somewhat wide range of Investing for the future. For the large companies among
products and applications. Testing this in the market through the 15 success stories, most have developed the bio-based

7
 product as an addition to a wider – bio-based or not – prod- THE 15 SUCCESS STORIES
uct slate. They have thus been able to mobilise the finance
internally through leveraging on profits generated elsewhere The 15 products described in this report all deliver on one
in the business. A feature shared by large companies that or more of the three individual success criteria described
are not specialised in bio-based activities is that they have above. Further, they were selected to jointly provide a good
invested in such activities as an investment for the future. coverage in terms of the criteria described above. Last, it was
essential that the companies that produce them were ready
Greening of society. Along with the SMEs and micro-en- to participate in the study. The products in the table below
terprises they largely built their business case on the current are presented by company size (i.e. Large, SME, Micro) and
trend of a ‘greening of society’ reflected in a growing consumer product name.
preference for green products, in CSR and purchase policies
of large brands and buyers, and in a focus of investors and
public funds on SDG investments.

OVERVIEW OF THE FIFTEEN SUCCESS STORIES

Product Company Coun- Company EU
Products, applications and markets
name name try size4 funding5
Bio-based Novamont IT A bio-based chemical intermediate building block. It is used Large FP7
1,4- as solvent and for the production of plastics, elastic fibres
Butanediol and polyurethanes. Bio-based BDO is an alternative to
(bio-BDO) fossil-based BDO. The production plant was developed in a
strategic partnership with a US based owner of an innovative
technology that is integrated in the production process. The
product is mainly used internally to increase the bio-based
content of Novamont's downstream bio-based plastics. Type:
‘building block’. Application: ‘Packaging and tableware’. Other
possible future application areas include: ‘moulded industrial
and consumer products’.
BioFoam® Synbra NL A foam for packaging and technical applications (insula- Large No
Technology tion), using sugar cane as a feedstock. The product has been
developed with a technology partner. The final product is sold
internally within the Synbra Group and to external customers.
Type: 'material'. Application: 'packaging and tableware'. Other
possible application areas include: ‘insulation materials’, and
‘moulded industrial and consumer products’.
Carbox- Cosun NL A scale inhibitor (antiscalant) used in detergents for dish- Large⁶ Not for
yline® CMI Biobased washers, washing machines and alkaline cleaners, and in product
Products filtration processes for potable water production. CMI is pro-
duced from inulin that is not suitable for human consumption.
The inulin is derived from chicory roots. Type: ‘general build-
ing block’. Application: ‘household and professional cleaning.

4
Company size estimated according to number of employees only: Large (>250 employees), SME (between 10 and 250 employees), Micro (<10
employees)
5
The column on EU funding indicates whether the success stories (products) have benefitted from funding from the European Union along their
R&I and/or commercialisation path. If this is so, the table shows the source of the EU funding received (e.g. from H2020) for the examined success
story. The wording „Not for product“ indicates that the company behind a success story has received EU funding, not for the examined success
story in question, but for other activities in the bio-based sector (i.e. activities not directly relating to this success story). The wording „No“ indicates
that the company has not received any EU funding for its activities in the bio-based sector.
8 6
Cosun Biobased Products in itself is an SME, but as an offspring of Royal Cosun it is categorised as a Large company.
 Product Company Coun- Company EU fund-
Products, applications and markets
name name try size4 ing5
Desmo- Covestro DE The product is a hardener for lightfast polyurethane coatings Large Not for
dur® eco N AG used to protect a material’s layer. Its feedstock is cornstarch product
and it is applied in automotive equipment, automotive coat-
ings, plastics, wood and industrial coatings. In the long term,
the product is expected to replace existing petrochemical
hardeners in the company's product line. Type: ‘building block’.
Application: ‘lubricants, resins, paints, coatings, adhesives,
inks’.
Lipex® Novozymes DK The product is a lipase-based enzyme solution. It is an Large Not for
alternative to traditional surfactants, which are the active product
compound in detergents that clean stains. Lipex® is used in
detergents, to enhance the detergent capacity to remove
grease stains. Type: 'building block'. Application: ‘household
and professional cleaning’.
Rilsan® HT Arkema FR A bio-based polyamide (PA-11) produced from castor oil Large Not for
Rilsan® (vegetable oil), which is used where high durability, flexibility product
Invent and temperature resistance are required. Rilsan® HT is used
in automotive applications and specific Rilsan® Fine Powder
products have been developed for 3D printing. Type: ‘building
block’. Application: ‘moulded industrial and consumer prod-
ucts’.
Wheat Biotrem PL Disposable tableware produced from compressed wheat bran. SME ESIF;
bran The products are used by restaurants, event organisers, ca- H2020
disposable tering companies and private consumers. Type: ‘final product’. (SME
tableware Application: ‘packaging and tableware’. Instr.)

Curran® CelluComp UK The product is a cellulose non-fibre material produced from SME EIP;
Ltd sugar beet pulp derived from waste streams from food FP7
processing. It is used as a bio-based additive to provide
rheology and reinforcement in applications such as paints and
coatings. Other relevant applications include concrete, drilling
fluids, cosmetics and personal care products. Type: ‘general
building block’. Application: ‘lubricants, resins, paints, coatings,
adhesives, inks’.
Ecover All Ecover BE A hard surface cleaning product, commercially available since SME⁷ FP7
Purpose the early 2012. It is used by household consumers and, to
Cleaner a lesser extent, also in professional cleaning. The product's
innovative ingredient (eco-surfactant) uses rapeseeds as a
feedstock. Type: ‘final product’. Application: ‘household and
professional cleaning’ .
Lumir® Lumir Oy FI The product is an indoor sound absorption solution in spray, SME No
Spray based on a wood-fibre coating produced from wood pulp. It
is an alternative to glass or rock wool based indoor sound
absorption. It can further be directly applied onto surfaces with
minimal or none preparation and contains colour pigments
eliminating the possible need for acrylic paints. The product
is marketed to professionals in the construction and building
sector, such as architects. Type: ‘material’. Application: ‘con-
struction material’.

7
Ecover has approximately 250 employees worldwide, and is therefore at the threshold between an SME and a large company. It was recently
acquired by a large company. We have categorised the company as an SME, as their past challenges and modalities for financing have resembled
more that of SMEs.
9
 Product Company Coun- Company EU fund-
Products, applications and markets
name name try size4 ing5
Melodea Melodea IL/ SE CNC is a nano-structured cellulose that can be used to enhance SME H2020;
CNC tech- Ltd. existing materials and produce novel products. Applications FP7
nology include papermaking additives, coatings, paints, packaging,
building material and bio-composites. Melodea’s business mod-
el aims to licence out the production process, but also develops
strategic applications to create for its technology. The produc-
tion process extracts CNC from wood pulp in the side streams
of the pulp and paper production. Type: ‘technology licencing’.
Application: ‘lubricants, resins, paints, coatings, adhesives, inks’.

Paptic® Paptic Oy FI Paptic produces a wood-fibre based bag and wrapping material SME H2020
bags that can replace bags and wrappings made from plastic, while (SME
exhibiting a higher longevity/reusability. Accordingly the appli- Instr.)
cations are for any non-food wrapping and bagging, such as
e-commerce packaging, banners, and dry food packing; however,
Paptic currently focuses on the application as a reusable carrying
bag. Type: ‘final product’. Application: 'packaging and tableware'.
Abilar® Repolar FI Abilar® is an ointment to treat wounds and burns, and Micro No
Pharma- particularly hard-to-heal wounds. It contains 10 % refined
ceuticals resin from the Norway Spruce, mixed with a salve base. The
Oy product is used in home care and by health-care profession-
als, and can be obtained in pharmacies. Type: ‘final product’.
Application: ‘healthcare, personal care’.
BioLite™ Trifilon AB SE BioLite™ are bio-composite based of natural fibres from Micro No
industrial hemp and with features similar to conventional
composites. BioLite™ involves the mixing of hemp-based nat-
ural fibres with polymers that come primarily from recycled
plastic. It is produced in two product classes. One product
class is used for automotive panelling, home and garden
goods, consumer products (e.g. dust collectors, food trays)
and luggage, and the other for e.g. brackets and industrial
parts as well as home, garden and consumer goods. Type:
‘final product’. Application: ‘moulded industrial and consumer
products’.
ICCP tech- BioBTX B.V. NL A process for the production of a drop-in replacement for Micro ESIF
nology conventional fossil-fuel based BTX produced as by-product in
oil refineries. The technology produces aromatic compounds
benzene, toluene and xylene (i.e. BTX) from biomass. BTX
compounds are used as building blocks for products of the
petrochemical industry and the manufacturing of polymers
such as PET and other plastics. The business model rests
on the licencing of the technology and the provision of the
associated services. Type: ‘technology licencing’. Application:
‘moulded industrial and consumer products’. Other application
areas include: ‘packaging and tableware’, ‘lubricants, resins,
paints, coatings, adhesives, inks’.

10
Bio-BDO
by
A bio-based building block for
Novamont bioplastics

PRODUCT NAME
Bio-based 1.4-Butanediol (bio-BDO)
PRODUCT DESCRIPTION
Chemical used as solvent and as building
block in plastics, elastic fibres and
polyurethanes
FEEDSTOCK
Glucose syrup derived from the hydrolysis
of starch
ORGANISATION
Novamont S.p.A. through 100 % owned
Mater-Biotech S.p.A. subsidiary
EMPLOYEES
75 direct employees Mater-Biotech plant;
700 direct employees in Novamont Group
(2017)
COUNTRY
Italy PRODUCT
1.4-Butanediol (BDO) is an industrial chemical widely used as a solvent and as a building
R&D START
block for the production of plastics, elastic fibres and polyurethanes. Until recently, it was
2012 only possible to obtain BDO from fossil sources. Novamont has invested in a production fa-
MARKET ENTRY DATE cility that derives BDO from renewable sources through fermentation. The resulting product,
2016 (EU) bio-BDO, is a 100 % bio-based drop-in replacement for the fossil-based BDO on the mar-
PRODUCTION CAPACITY (EU) ket. The company uses the product as an input for its own downstream bioplastic products,
30,000 tonnes bio-BDO/year (EU) which constitute the company’s main business.
PRODUCTION VOLUME
Expected to reach full annual production
SUCCESS
capacity (30,000 tonnes) in 2018 Novamont’s bio-based BDO enables the production of their fourth generation bioplas-
SALES (GLOBAL)
tics, raising the renewable content from about 35 % to more than 60 %. It is the first
Not applicable (captive product use) commercial scale dedicated plant to produce bio-based BDO through single-step fer-
INVESTMENT mentation, thanks to bioengineering technology that Novamont successfully licensed
EUR 100 million investment for and integrated into the production process. While product development benefited from
establishing the production plant financed EU funds (FP7) at the R&D stage, the bio-BDO industrial plant is the result of over EUR
from private sources
100 million investment financed entirely from private sources. Industrial production
PRICE from the plant started in 2016.
Costs are less than double compared
to published fossil-BDO prices. Product PROSPECTS
currently not sold to external customers
The prospects for bio-based BDO are positive. Its integration in Novamont’s biopolymers
EARNINGS
production, also dedicated to compostable carrier bags, will be a prerequisite to meet
Not disclosed (results consolidated yearly
in Novamont Group’s balance) stricter standards with respect to minimum bio-based content, such as those introduced
by Italian and French national laws. Bio-BDO thus reinforces the market position of current
customers, namely internal Novamont Group companies that use it in their production of
CHARACTERISTICS
• 100 % bio-based bioplastics. Besides legislative requirements, sustainability commitments of brand own-
• Biodegradable ers of products that make use of BDO (e.g. in textiles) create opportunities for the future
• Drop-in replacement of fossil based deployment of bio-BDO by external customers. On the supply side, the price difference
substitute products
• Patent protected producing technology compared to traditional products has been reduced as a result of cost reduction measures
• Enables an increase of bio-based in the production process. Medium to long-term supply-side improvements are already
content of bioplastics to circa 60 % now being considered, including research into a shift to lignocellulosic biomass feedstock.
11
 HISTORY Drivers of success
»» Novamont Group’s reputation and established market
Since its foundation in 1989, Novamont’s core business has position for bioplastics, the current application for bio-BDO.
been the production of biodegradable and compostable bio- Vertical integration facilitates market access for bio-BDO
plastics. Over time, the focus expanded to new materials and »» EU Bioeconomy Strategy, Italian and French environmental
chemicals that enable Novamont to develop bioplastics with legislations that introduce minimum bio-based content
criteria for lightweight plastic carrier bags; Italian corporate
improved characteristics - most recently its 4th generation tax law that rewards innovation
of bioplastics with higher bio-based content. This led to the »» Strong company focus on R&I and know-how in developing
development of bio-BDO and the foundation in 2012 of a low-impact processes, team profile of high level researchers
and engineers
dedicated subsidiary around the investment in a bio-BDO
»» Development of Novamont’s biotechnology platform
production plant (Mater-Biotech). »» Novamont’s ability to work closely with key partners, in
particular in reaching a licensing agreement with Genomat-
Since the initial phases of developing bio-BDO, Novamont ica for the integration of their innovative technology in the
bio-BDO plant
concluded an agreement with Genomatica, a California-based »» The availability of EU and national public funding for R&D
bioengineering company, for licensing the company’s bio-BDO and demonstration projects that helped prepare the ground
process technology. Novamont worked for the reconversion for the industrial scale investment
of a decommissioned industrial plant to the production of
bio-BDO. The conversion was carried out between 2014 and
2016. The related investment amounted to over EUR 100
million, raised from private sources, including Novamont’s the plant conversion, capitalising on biotechnology expertise
internal finances, and bank loans. that was complementary to Novamont’s in-house know-how
in developing low-impact processes.
The project entailed significant technology risk, related to both
the reconditioning of an abandoned plant initially designed The production of bio-BDO does not yet benefit from econo-
for a different fermentation process and the scale up of an mies of scale to the same extent that competing, traditional
entirely innovative process. Novamont overcame technical products do. This was partly addressed through measures
challenges through R&D investments, and by enhancing taken during plant construction that increased the plant ca-
the research and engineering teams meanwhile leveraging pacity from 18,000 to 30,000 tonnes per year. Commercial
on pre-existing skilled human resources. The risk was also production at Novamont’s bio-BDO production plant started
mitigated by working closely with Genomatica throughout in July 2016.

SWOT ANALYSIS FOR FOR BIO-BDO

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Established company Price competitiveness Favourable policy agenda, Absence of strong

position in bioplastics vis-a-vis fossil equivalent including national bio- regulatory push for bio-
market product based standards for certain based products in Europe
products
R&D focus and know-how “Fake” bio-based plastic
in low-impact processes Availability of EU products on the market
funding at the R&D and with misleading claims
Partnership with a demonstration phases,
bioengineering company national support schemes Low oil prices
and European license for the bioeconomy and
agreement for bio-BDO innovation
technology
Company shareholders
include venture capital and
banking firms with access
to finance
Drop in replacement for a
product with established
supply chain
12
A bio-based building block for bioplastics

FUNDING
Presently, the market penetration of bio-based BDO (including
The set-up of the bio-BDO industrial production plant involved that of Novamont’s competitors) remains relatively low given
a private investment of EUR 100 million. This was mobilised the newness of the industry. For 2016, Eurostat data show
from the company’s internal finances. In particular, Novamont moderate sales levels of just over 5,000 tonnes of bio-BDO
is controlled 75 % by Mater-Bi S.p.A. – whose shareholders are produced in the EU, and imports of close to 32,000 tonnes
Banca Intesa, Investitori Associati, and others – and 25 % by into the EU from other countries. However, changes have
Versalis – Eni’s subsidiary and one of Italy’s biggest chemical started to emerge in recent years as a result of investments
companies. and it is expected that this dynamic will continue.

Novamont did not receive EU or national public funding for Bio-BDO produced at the Mater-Biotech plant is used by
the reconditioning of the plant. In the initial phase, Novamont Novamont Group companies as a building block for the pro-
benefitted from EU funds available for R&D activities that duction of bioplastics. In the future, there is potential for
prepared the ground for the investment in the industrial scale expanding the customer base to include external customers.
plant. The FP7 BIO-QED project included R&D activities aimed
at cost reduction and sustainability improvement of bio-BDO REGULATORY ASPECTS
and generated evidence on key technical and economic design
parameters for the investment. Novamont has over the years An enabling factor for the development of bio-BDO has
been actively involved in additional R&D projects in relation been the Italian and French legislations on lightweight plas-
to bio-based activities that have received support from EU tic carrier bags. Italian law effectively banned the sale of
research and innovation programmes. This has included funding non-biodegradable lightweight plastic bags since 2011. This
under FP7 and H2020, including under the BBI-JU. initiative, which anticipated the European legislation, also
signalled to the industry that further requirements could
MARKET INFORMATION be expected in the future in relation to minimum bio-based
content. In 2017, the implementation of the EU 2015/720
As bio-based BDO has similar characteristics to the fos- Directive “Reducing the consumption of lightweight plas-
sil-based BDO, the total potential market size for bio-based tic carrier bags” introduced minimum standards in Italian
BDO corresponds to the total market size of the fossil-based legislation concerning the bio-based content of lightweight
BDO. The total global market for BDO (fossil- and bio-based) plastic carrier bags: 40 % as of January 2018, 50 % as of
was estimated to be at least 2 million tonnes in 2016 and January 2020 and 60 % as of January 2021.
growing over the years. Currently, on the basis of studies
and market data, Novamont estimates it to have reached Another case is France, where the law on energy transition
about 2.5 million tonnes. The growing demand for spandex and green growth provides specific measures on plastic
in textiles and increasing applications of BDO derivatives bags, plastic packaging and waste. Starting from January
in industrial processes have been the key drivers of recent 2016, single use plastic bags are banned, and from January
growth. 2017 fruit and vegetable bags have to be compostable. A
technical decree was adopted to set the percentage of bio-
THE TOTAL MARKET FOR 1.4-BUTANEDIOL (FOSSIL-
based content, increasing over the years for plastic bags.
AND BIO-BASED) IN 2016, its derivatives and uses

THF MERCHANT
With the integration of bio-BDO in its bioplastics, Novamont
8% is able to meet these minimum requirements, which gives
them a competitive advantage in the market.
Estimated annual growth
PTMEG
37 % BDO demand: 5–8 %
However the market potential is still locked, since there is
PBT Total market 2,0 mioT a high percentage of “fake” bio-based products that do not
23 %
comply with European standards and national laws. This
BDO derivatives and uses:
could be alleviated in the future by initiating actions for the
››Tetrahydrofuram (THF):
PU/TPU enforcement of existing laws and related sanctions.
PTMEG (polyTHF) →
11 %
spandex (e.g. Lycra™),
NMP 9 % solvents
››Polybutylene terephta-
GBL (Incl. polymers) late (PBT): automotive
8% plastics, cell phones, PCs
››Gamma-butyrolactone
OTHERS 1 % (GBL): PVP polymers,
solvents
BIOPLASTICS 3 % ››Polyurethanes (PU): en-
gineering thermoplastics,
coatings
Source: Company estimates

13
 TECHNOLOGY INFORMATION The production process of bio-BDO encompasses the recovery
and valorisation of co- and by-products, which leads to reduced
Novamont’s bio-based BDO is derived directly from renewable net energy consumption and waste streams as compared to
sources through a single step fermentation process. More conventional processes. This is done through a cogeneration
specifically, bio-BDO is made with a metabolically engineered system and a biodigester.
strain of E. coli type bacteria using sugars. This strain was de-
veloped by Genomatica which granted Novamont the European The feedstock currently used for the production of bio-BDO
licence to use it. Novamont has developed a biotechnological is sugars (glucose) derived from the hydrolysis of starch –
platform and the two companies also worked closely together the so-called glucose syrup, commonly used in industrial
throughout the bio-BDO plant conversion. fermentation processes. The glucose syrup is supplied from
a local Italian production plant that uses starch sourced in
Bio-BDO industrial production from Novamont’s plant started Europe. Novamont’s choice of supplier has helped revitalise
in July 2016. Accordingly, the Technology Readiness Level is the business of a local glucose production plant, creating
9 (actual system proven in operational environment). positive impacts along the value chain.

ENVIRONMENTAL IMPACT According to company estimates, the quantity of plant raw

materials required for its bio-BDO production constitutes about
Novamont’s internal LCA studies show that bio-BDO results in 0.05 % of total European annual production. Therefore, the
a ≈ 60 % greenhouse gas reduction across the BDO life-cycle current demand for glucose syrup is assessed to not signifi-
when compared to fossil-BDO (“Cradle to gate” boundaries). cantly influence the market for these raw materials. Looking
Bio-BDO improves the environmental profile of products in into the future, and to address possible future concerns with
which it is used as a building block. Depending on the specific respect to feedstock competition with food, Novamont has
product application, bio-BDO enables an increase of the been conducting research on obtaining sugars from lignocel-
bio-based content of downstream bioplastics from about lulosic biomass. This technology has proven to be feasible at
35 % to about 60 %. the pilot stage.

THE WAY FORWARD

The outlook for bio-BDO is positive in terms of sales volumes owing largely to national regulatory requirements
that are being phased in at the national level (Italy and France) and which will require an increasing percentage
share of bio-based content for certain bioplastic products. Therefore, the bio-BDO plant can be expected to reach
full capacity in the short to medium-term, as Novamont moves to its 4th generation bioplastics as its standard
product offering to meet such requirements.

BDO is in high demand for a wide range of applications besides plastics, e.g. in sectors such as textiles, auto-
motive and consumer goods. Sustainability commitments of brand owners in these sectors create opportunities
for the future deployment of bio-BDO. In the future, there could be a potential for expanding the customer base
to also include customers external to the Group. This would assume that Novamont succeeds in further scaling
up production, and is subject to strategic decisions and priorities within the company.

At the same time, improvements in the production process and measures aimed at cost reduction will drive
growth alongside demand-side factors. The quantity of plant raw materials required for bio-BDO production in
Mater-Biotech plant is around 0.05 % of total European annual production (2012 data). Therefore, the current
demand for sugar to produce bio-BDO does not significantly influence the market for these raw materials. How-
ever, within Novamont’s logic of continuing innovation, the company is investigating the use of various renewable
by-products as feedstock for the bio-BDO production process. Novamont researchers have conducted experi-
ments aimed at obtaining sugar from lignocellulosic biomass (so-called second generation sugars). Novamont
pilot-tested this technology, which has proven to be technologically feasible.

This factsheet has been compiled from information collected in April 2018.

14
BioFoam®
by A bio-based alternative
Synbra to plastic-based foams
Technology

PRODUCT NAME
BioFoam®
PRODUCT DESCRIPTION
Foam for technical and packaging
applications
FEEDSTOCK
Sugar from cane or beets
ORGANISATION
Synbra Technology of Synbra Group,
owned by Gilde Buy-Out Partners
EMPLOYEES
Circa 900 direct employees at the
Group level
COUNTRY
The Netherlands

R&D START PRODUCT

2006 BioFoam®, a polylactic acid (PLA6) based foam, is an alternative to traditional plastic-based
MARKET ENTRY DATE foams. It is suitable for use in technical and packaging applications interchangeably with
2010 (EU) expanded polystyrene (EPS) and polysterine (PS). Applications have included packaging for
PRODUCTION CAPACITY (EU) large domestic appliances, icebox insulation, cavity wall insulation, surfboards etc. It is both
BioFoam® capacity corresponding to bio-based (100 %) and biodegradable; and it can be remoulded after use into other end-
6,000 tonnes PLA/year (Synbra’s PLA
plant capacity) of-life applications.

PRODUCTION VOLUME SUCCESS

BioFoam® production volume correspond-
ing to 30 % of Synbra’s PLA plant capacity
Synbra formulated a strategic vision in 2006: to develop PLA based materials that
can substitute traditional fossil-based packaging materials in technical and packaging
SALES (GLOBAL)
EUR 1.6 million (current); EUR 0.5 billion
applications. The aspiration is to ensure the sustainability of the business in the longer
(in 2025 with scaling up investment) term, and to drive a market evolution towards more sustainable bio-based materials.
INVESTMENT A major step was taken five years later: the opening of a fully operational PLA plant;
A PLA plant of 70,000 tonnes per annum the only of its kind in Europe. BioFoam® has been on the EU market since 2010, largely
requires an estimated EUR 200 million thanks to the capacity of Synbra to mobilise internal finance for the product develop-
PRICE ment.
Double of conventional fossil-based
substitute products PROSPECTS
EARNINGS The prospects for BioFoam® are positive. The price difference compared to tradition-
Positive at company level. Product line al products is continuously reduced thanks to for example continuous improvements in
expected to be positive in the near future
the production process. Global demand for PLA products is expected to increase over
the coming years, largely stimulated by legislative actions and by CSR commitments in
CHARACTERISTICS companies. Medium to long-term supply-side improvements are already now considered,
• 100 % bio-based (DIN CERTCO including research into a shift to non-food crop feedstock for PLA, e.g. ‘thinning wood’.
certified)
• Biodegradable
• Carbon neutral (PAS 2060 standard)
and Cradle-to-Cradle™ certified
• Patent protected
• Trademarked (2008, international;
2009, the EU) 6
PLA is a polymer that is both bio-based and biodegradable. It is derived from renewable resources such
as sugar cane or beet, which is refined to sugar, then fermented to lactic acid, from which lactide is
made. Lactide is then transformed into PLA through a polymerisation process. 15
 HISTORY Drivers of success
»» Capacity of Synbra to mobilise internal finance for the
BioFoam® is the result of Synbra Technology R&D activities,
product development;
primarily financed internally from within the Synbra Group. »» Partnerships with Wageningen University, a manufacturing
This work began in 2006, in consideration of the potentials technology company (Sulzer Chemtech) and a feedstock
of PLA as raw material. Initial R&D was done together with supplier (Corbion);
»» Long term perspective and strategy, underpinning the contin-
Wageningen University and confirmed the suitability of PLA uous commitment of Synbra’s management to the product;
as raw material. »» Strong position of Synbra in the relevant industry segment,
which enabled it to leverage on its existing know-how and
Confronted with a shortage of supply of PLA, the Synbra market knowledge.
Group invested in 2008 in its own PLA plant, constituting the
single largest investment made by the Group. The plant due to the economic crisis and low oil prices, mobilisation
was developed in partnership with a manufacturing tech- of finance, as well as access to raw material. An important
nology company and a feedstock supplier, Sulzer Chemtech explanatory factor for this rapid development is the flexibility
and Corbion respectively. The plant was fully operational in of Synbra’s decision making and the simple financial structure
2010. However, the economic crisis reduced demand for PLA- behind the development.
based products considerably, due to low economic activity and
low oil prices influencing their cost competitiveness vis-a-vis
the conventional fossil-based foam products, i.e. expanded FUNDING
polystyrene (EPS). Production has thus remained at levels
The development and commercialisation of the product has
below full capacity.
been mainly funded from the company’s internal finances.
The company has used the profit made through other business
Following a considerable write-off in 2013, the company’s
activities to finance the R&D and commercialisation efforts
strategy was refocused on PLA foam applications and the
related to the BioFoam® product. External finance could not
BioFoam® brand. BioFoam® is considered by the Synbra
be mobilised, primarily due to the time span between the
Group as a long-term investment over making short-term
capital investment being made and the potential resulting
profit. Synbra is active in both fossil-fuel based and bio-based
sales and profits. Internal finance was also the main source
plastics, and BioFoam® competes with the company’s own
of funding for the construction of the PLA production plantin
“traditional” EPS products as well as with the 10 major play-
the Netherlands.
ers on the global EPS market. BioFoam® is the centrepiece
of Synbra’s long term strategy to transition away from
The company’s strategy for product development has been
fossil fuels, and a core element also to ensure the financial
continuously endorsed by the company’s owner, Gilde Buy-Out
and environmental sustainability of the business in a future
Partners, a private equity fund who has held the entire share
low-carbon economy.
capital of Synbra since 2006. The internal funding mobilised for
the development of BioFoam® was subject to a robust initial
Despite considerable investment requirements, and the unfore-
risk assessment commissioned from a consulting firm. This
seen decline of oil prices and the economic crisis, BioFoam®
exercise concluded that pursuing the product development did
has succeeded relatively fast: Five years from initial R&D to
not expose Synbra to an unacceptable financial risk – even
BioFoam® being commercially produced. The company has
in a worst-case scenario.
in the process overcome risks in relation to reduced demand

SWOT ANALYSIS FOR BIOFOAM®

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Established production, Ability to mobilise finance SD gaining momentum with Oil price developments
ability to expand, patents for possible new plants businesses and posItive
regulatory local changes Absence of strong
Involvement in actions to Ability to continously regulatory push for bio-
improve SD performance provide the best SD Expected global PLA based products in Europe
further features of the products market growth at 10 % per
year until 2021
Accreditations and
verifications of product Oil price developments
16
A bio-based alternative to plastic-based foams

Besides internal finance, Synbra together with their co-operation

partner Corbion received a total of EUR 800,000 in subsidies CURRENT AND FUTURE GLOBAL MARKET SHARE FOR
from the Dutch Government in support of the initial R&D ac- BioFoam® as a % of the global EPS foam market
tivities relating to the product. Synbra has also benefited from
€ 840,000,000 (9.3 %)
various fiscal instruments in the Netherlands in support of
innovation (e.g. lower tax percentage using the environmental Current BioFoam® sales
investment deduction methodology MEA; wage tax subsidies).
Expected BioFoam® sales
by 2025 (assuming a 70,000 t
MARKET INFORMATION capacity PLA plant has been
built in NL)
In recent years, Synbra’s PLA production amounted to be- € 480,000,000 (5.3 %)
tween 10–30 % (depending on oil price levels) of the plant’s € 1,600,000 (0.02 %) Additional BioFoam® sales
annual production capacity of 6,000 tonnes. Currently the that could result from a lower
price difference factor of 1.2
price difference is estimated at a factor 2:1 when comparing
compared to EPS
Synbra’s PLA based products to traditional EPS based prod-
ucts, down from a factor of 5:1 in 2011. Further measures Global EPS foam market (2016): EUR 9 billion
that are in a test phase have demonstrated the capacity to
Source: Company estimates
reduce the price differential to a factor of 1.6, while some
investment in new machinery would bring the factor down
to an estimated 1.2 in the medium term. The above factors
are before tax, and the actual price differential becomes REGULATORY ASPECTS
even less pronounced when the fees that producers and
importers of packaging in the Netherlands must contribute Producers and importers of more than 50,000 kg of pack-
to the “Packaging Waste Fund” are taken into account (see aging in the Netherlands must contribute to the “Packaging
more under Regulatory Aspects). Waste Fund”, with the fee per kg of conventional plastic
packaging in 2017 amounting to as high as EUR 0.64/kg,
The Synbra Group of companies cover the entire value chain while for biodegradable plastics the corresponding fee was
from raw materials to construction, packaging and recycling. as low as EUR 0.02/kg . This narrows the price differential
Synbra Technology’s direct customers include companies between BioFoam® and EPS products and illustrates the
within the Group e.g. Synprodo (for packaging solutions with long-term competitiveness of the product.
BioFoam®) and IsoBouw (for construction materials from
BioFoam®). In addition, the company has built a customer Moreover, the gradual introduction of bans on EPS use in
base from outside the Group, with several customers based specific packaging products in certain regions (e.g. in North
in Italy, the US, and France. America, Far East) are key drivers of demand for BioFoam®,
and similarly so are end-user sustainability commitments
In terms of market potential, considering the expected growth that effectively introduce ‘voluntary bans’.
in demand for PLA-based materials including BioFoam®
(expected global PLA market growth at an average rate of TECHNOLOGY INFORMATION
10 % per year until 20217) and the limited production capacity
of PLA currently available worldwide, the company expects BioFoam® is made by expanding PLA-based microbeads with
to reach its maximum annual production volume of 6,000 a size of 0.7 mm–1.0 mm or 1.0 mm–1.6 mm to typically
tonnes in the near future. After that point, the company has 25–40 kg/m³, and moulding these beads using custom-made
the ability to double its production capacity by expanding its moulding equipment. The Technology Readiness Level (TRL)
current PLA plant or potentially purchasing additional PLA is 9 (actual system proven in operational environment). The
from the market. Considering the existing price differential BioFoam® product is protected by patents.
compared to traditional products, the market opportunities for
BioFoam® in the immediate future lie in new/niche applications The polymerisation technology for the PLA plant was developed
that are less driven by price considerations, before moving to through a partnership with Corbion (which was called Purac
the market segment for replacement products as the price at the time) and Sulzer Chemtech. The same technology is
differential narrows. currently being deployed at a new PLA plant built by Corbion
in Thailand and is expected to be completed in 2018. Before
Although current sales are modest, BioFoam® has in the it acquired the license from Sulzer and Corbion, Synbra tested
medium to longer term the potential to gain up to 15 % their PLA material in its own EPS bead-making process, using
market share from the current EUR 9 billion global EPS CO2 as a blowing agent.
foam market.

7
Global production capacities of bioplastics 2016–2021, Report, European Bioplastics. Data for 2016
17
 ENVIRONMENTAL IMPACT Production and end-of-life: Synbra has received the Cra-
dle-to-CradleTM certification for BioFoam® , as well as the
Feedstock and bio-based rating: the PLA raw material for Bio- Carbon Neutrality verification in compliance with the PAS
Foam® originates from 100 % bio-based feedstock, namely 2060 specification standard. After use, BioFoam® can be
GMO-free sugar from cane or beets. The geographical origin is remoulded into a new product and has additional end of life
predominantly Thailand (sugar cane). Synbra’s supplier (Cor- options (it is biodegradable and can be industrially composted).
bion) have in place sustainable sourcing commitments and a
sugar code, covering environmental practices, land rights, good In addition, the PLA itself has been awarded the Cradle-to-Cra-
agricultural practices, and biodiversity, as well as business dleTM certification. The BioFoam® manufacturing process uses
ethics, human rights, and labour conditions. Synbra is also CO₂ instead of pentane for the purpose of blowing the foam,
involved in work on the development of 2nd generation PLA and the CO₂ emitted during production is in fact captured in
from “thinning wood”. BioFoam® has the highest bio-based the material. Overall, the demonstrated environmental qual-
rating (between 85–100 %) DIN-CERTCO certified. ities of BioFoam® have been an important deciding factor in
major end customers endorsing the product.

THE WAY FORWARD

The outlook for the BioFoam® product is positive, both in terms of sales volumes and profitability owing to
the several underlying factors and trends that support its expansion to new applications and markets. Firstly,
end-user sustainability commitments as well as governmental actions towards a greener, low-carbon economy
will continue to be key drivers of demand for BioFoam®. A recent significant milestone that has the potential to
be positive is the decision of a major furniture retailer to approve BioFoam® as a packaging material for their
products and to stop using EPS-based packaging. At the same time, improvements in the production process of
BioFoam® will drive growth alongside the demand-side factors.

Considering the limited production capacity of PLA currently available worldwide, the demand for PLA-based
materials (including BioFoam®) may soon outpace the growth in production capacities and this may lead to a
shortage of PLA on the market, at least until new production facilities are built. In the case of Synbra, the com-
pany is likely to reach its maximum annual BioFoam® production volume (corresponding to the annual production
capacity of its PLA plant of 6,000 tonnes of PLA) in the foreseeable future, and has a debottlenecking plan in
place that will increase the production capacity of its existing PLA plant.

In the medium to longer term, investments in new PLA production facilities will be indispensable to meet the
expected demand growth. To give an illustration of investment needs, an estimated 2 years’ time and an invest-
ment of about EUR 200 million would be needed for establishing 3 plants, for lactic acid production, lactide
production and PLA polymerisation respectively which would enable the production of 70,000 tonnes of PLA per
year. Any investment in second-generation feedstock would be in addition.

Medium to long-term supply-side improvements are expected to include a shift to a new generation feedstock for
PLA, shifting away from the currently used sugar cane, to a feedstock that would address any concerns in terms
of implications for the food production chain. Synbra is member in a consortium of companies actively working
on the use of ‘thinning wood’ generated as a residue of harvests as the feedstock for producing lactic acid (which
is transformed into PLA).

This factsheet has been compiled from information collected in January 2018.

18
Carboxyline® CMI A functional biopolymer
by
Cosun Biobased that deals with hard water
Products challenges

PRODUCT NAME
Carboxyline® CMI
PRODUCT DESCRIPTION
Scale inhibitor (antiscalant) used for
detergents formulations and water
purification
FEEDSTOCK
Chicory roots
ORGANISATION
Cosun Biobased Products, subsidiary
of Royal Cosun
EMPLOYEES
15 direct employees and another 10–15
indirect R&D employees at Cosun Biobased
Products; Around 3900 employees at Royal
Cosun
COUNTRY
The Netherlands PRODUCT
Carboxy Methyl Inulin (CMI) is an environmentally friendly scale inhibitor (antiscalant).11
R&D START
It is used in detergents for automatic dishwashers, laundry machines and alkaline clean-
1995 ers,12 as an alternative to fossil and phosphorus based chemicals.13 It is also used in
MARKET ENTRY DATE filtration processes for potable water production. A modest modification of the product
2010 (EU) could broaden its application to other markets such as personal care. It is bio-based and
PRODUCTION CAPACITY biodegradable. The product is derived from company produced inulin that is not suitable
Not disclosed for human consumption.
PRODUCTION VOLUME
Not disclosed
SUCCESS
Royal Cosun invested in large inulin plant with an aim to produce inulin for food production.
SALES (GLOBAL)
Not disclosed
Some inulin however does not comply with food safety standards and hence it cannot be
used for human consumption. CMI is a research result exploring possible uses of inulin in
INVESTMENT
Multimillion EUR investment non-food markets. Upon development of CMI, Royal Cosun decided to create a dedicated
company, that specialises in bio-based products. Established in 2010, Cosun Biobased
TYPICAL PRICE
3–8 EUR/kg (detergents application), Products quickly reached the market and, within 5 years, it has now reached breakeven
3–5 EUR/kg (potable water application) and profitability of CMI.
EARNINGS
The product reached its breakeven point in
PROSPECTS
2016, since then its net sales has steadily The prospects for CMI are positive. The market uptake in the home care sector is steadily
increased including more sustainable solutions, facilitated by stricter environmental rules for deter-
gents since 1 January 2017 and by the company’s continuous investments in research and
CHARACTERISTICS development. Also, CMI sales in the potable drinking water market are growing. At present,
• 55–70 % bio-based CMI is used by the largest potable water producers in the Netherlands. Furthermore, the
• Biodegradable company is actively working on entering new markets.
• Eco-label
• Ecocert
• Safer Choice by EPA: Safer Chemical 11
In detergents sector, CMI is used to prevent the formation of inorganic scale, which is often formed due
Ingredient
to the presence of hard water. An example of inorganic scale is a lime scale. It is the calcium carbonate
residue that forms on cookers, water kettles, or dishwashers.
12
In detergents application it prevents inorganic scale formation. In water purification purposes, it pre-
vents scale formation in membrane installations.
13
Performance efficiency is comparable to phosphorus-based products. 19
 HISTORY Drivers of success
»» Vertical integration, strategic partnerships, and co-develop-
Cosun Biobased Products is a subsidiary of Royal Cosun, ment throughout the whole value chain
an agro-industrial group that processes arable crops and »» Royal Cosun´s drive to innovate
other vegetable raw materials. 120 years ago, Dutch sugar »» Building a homecare product portfolio helped compete with
beet growers formed a cooperative and thus, established larger competitors
»» Working directly with customers to find new solutions and
Royal Cosun. Today, the cooperative has 8,856 members/ applications of the product
shareholders and it has grown into a business with 3,900 »» CMI’s higher price compared to fossil fuel and phospho-
employees and 35 production facilities in 10 countries, al- rus-based products are offset by customer demands for
quality and value product
together processing over 9 million tonnes of vegetable raw
materials. The annual turnover was EUR 2.1 billion in 2017.

In the late 1980s, the company invested in a large factory to the recognised market potential Cosun Biobased Products
to produce inulin for food consumption. At around the same narrowed their focus to only two of these markets: home
time, it embarked on various research projects to consider care and potable water production. This decision has been
other possible inulin uses. The goal was waste reduction as, supported by additional investment in R&D and marketing
due to food safety standards, part of the inulin is deemed exposure, financed by Royal Cosun.
not suitable for human consumption. Their most promising
findings emerged in the 1990s when the first molecule of Considering the capital investments to launch the new bio-
CMI was being developed. based products, CMI reached its breakeven point by 2016
and since then, they have been profitable. The profitability
Commercial production of CMI then started in 1997. Given is partly due to increased sales but profitability has also
Royal Cosun’s lack of experience in the non-food market, been enhanced by streamlined production costs and ending
they entered into an exclusive partnership with an external of depreciation (costs) of early investments.
company, responsible for product marketing and sales.
FUNDING
By 2009, and due to the recognised market potential of CMI,
Royal Cosun changed its strategy and, in 2010, founded CMI’s growth has primarily been financed through internal
Cosun Biobased Products as a dedicated bio-based prod- finances. Nevetheless, securing this funding required Cosun
ucts company. Biobased Products to present their business case to Royal
Cosun, similarly as it would have been done in the case of
CMI targeted different market segments in 2010. These in- external funding. Furthermore, between 1997 and 2009, the
clude home care, industrial water treatment, potable water company received approximately EUR 3.3 million from the
production, and the pulp and paper industry. By 2013, due Eureka funds to support research and development phases.

SWOT ANALYSIS FOR CMI

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Strong R&D focus Costly and lengthy testing EU Regulation (No Competing with large
required in order to 529/2012) limiting the chemical companies
Ability to adapt and demonstrate performance use of phosphorus content
change market focus of the product compared to in the standard dosage Costly and expensive
conventional alternatives in consumer automatic registrations and not EU
Awareness of other harmonised requirements
possible applications (home care sector) dishwasher detergents
(home care sector) (potable water application)
Ability to tailor-make Cost of feedstock
Expanding to different Environmental aspects
product for specific of the product alone are
customers markets (both
geographically and not sufficient to attract
Size of umbrella company application wise) consumers

Vertical integration In line with circular Price of competing

throughout the whole economy products is lower
value chain
20
A functional biopolymer that deals with hard water challenges

MARKET INFORMATION MARKET POTENTIAL POTABLE WATER PRODUCTION

Home and fabric care market: CMI is used in automatic
dishwashing detergents (tablets, gel, and powder), laundry EUR 20 milion (4 %)
detergents (powder and liquid), and cleaners (hard surface
and carpet cleaners). Most of CMI’s home and fabric care
sales are in Western Europe and North America. Potable water production
using membranes market
potential
Today, the home and fabric care market is CMI’s strongest
market. This is seen as a direct result of their investment in CMI potential
R&D and product testing. These efforts have demonstrated EUR 500 million
CMI’s better performance against competing fossil fuel and
phosphorus based products.

Furthermore, recent EU regulation limiting the use of phospho-

rus in detergents helped to strengthen their market position. Source: Company estimates
Competitors, whose chemicals contained banned amounts
of phosphorus no longer met market standards and found
themselves investing in new solutions. These investments
are consequently reflected in higher prices within this market.
REGULATORY ASPECTS
Additionally, product performance standards of some compet- Since 1 January 2017, phosphate is no longer allowed in house-
itors’ new formulations resulted in lower performance than hold dishwashing products (EU Regulation No 648/2004).
their original, phosphorus-based products. This led to a significant shift in the market and stimulated
an increased demand for CMI.
CMI is 3 to 4 times more expensive than similar, fossil based
products, because CMI’s feedstock is more expensive. The In potable water applications, CMI is facing significant reg-
higher price can, to some extent be justified by better cost per- ulatory burdens in accessing new markets. Certification is
formance of consumer products for which the product is used. a costly and lengthy process and individual permits are
obtained in each EU Member State separately.
Cosun Biobased Products states that the overall potential
for all bio-based products in the home care market is about
EUR 50–170 million and growing steadily. Cosun estimates TECHNOLOGY INFORMATION
that the potential market share for CMI could be about 5 %.
Carboxy Methyl Inulin (CMI) is a functionalised biopolymer
Water treatement: CMI is also in water reatment, e.g. it is produced by carboxymethylation of inulin, which is a plant
used for potable water production. It is usedduring the filtration reserve polysaccharide extracted from chicory roots. It is
and water purification stages. CMI sales in the potable water a renewable raw material.
production is limited to the Netherlands and the United States.
In brief, CMI performs well as a threshold scale inhibitor
Unlike home care, the CMI prices in this market are compa- for various types of inorganic scaling due to its three main
rable to prices for competiting products. Additionally, Cosun functionalities: complexing of metal ions, crystal growth
Biobased Products estimates that CMI used for potable drinking inhibition and dispersancy.
production is more cost-effective than fossil and phosphorus
based chemicals. As a result of these basic functionalities, CMI offers benefits
such as spotting-filming prevention in automatic dish-
According to Cosun Biobased Products, the worldwide market washer detergent and anti-redeposition of dirt particles
for antiscalants for potable water production using membranes in laundry detergent. Moreover, it prevents membranes
amounts to over EUR 500 million and is growing rapidly. The used for the production of potable or process water from
market potential for CMI in this market is max. EUR 20 million. scaling.

21
 ENVIRONMENTAL IMPACT The inherent biodegradability gives the product a certain
amount of microbiological stability. As a result, less or no
CMI is inherently and ultimately biodegradable, which means preservatives are required and this results in a reduced
that it slowly degrades in the natural environment and is environmental impact.
not persistent.
The very low eco-toxicity of CMI has been confirmed by
Its safety profile, renewable origin, inherent biodegradability several chronic toxicity tests. These tests indicate that CMI
(OECD 302A) and the fact that CMI is free from phosphorus does not have adverse effect on the environment during its
and nitrogen are characteristics that add positively to its resident time prior to mineralization.
sustainability.

THE WAY FORWARD

CMI is well established on two market segments (home care and water purification). Sales are steadily growing and
the recent EU regulation limiting the use of phosphorus in detergents has further spurred demand. Since it reached
its breakeven point in 2016, CMI has ensured its profitability. The future growth projections are underpinned by both
the company´s commitment to the bio-based industry as well as by the market’s shift toward more sustainable and
environmentally friendly solutions. A trend that is also to some extent supported by legislation.

At the end of 2017, Cosun Biobased Products moved their headquarters and manufacturing facilities to the Cosun
Innovation Centre in Dinteloord, the Netherlands. The centre will eventually also house the IRS (the Netherlands’
sugar beet knowledge and research institution). This joint R&D centre will continue to further improve uses of
agricultural raw materials, innovation in process technologies, energy management optimisation, and develop-
ment of new products.

While home care and water treatment markets will remain a significant part of the company´s focus, Cosun
Biobased Products is also looking to expand to new applications of the product and new markets. Currently, a
new modification of CMI is being developed that will target the personal care market.

At the same time, Royal Cosun is working on a second generation feedstock. More specifically, they are looking
into improvement the chicory yield in sustainable way.

From a geographical perspective, the company is mainly marketing CMI in the US and Western Europe. Their
strategy is to continue expanding to other countries. The largest potential market is expected to be Asia, more
specifically China, South Korea and Japan as these regions shift to higher environmental standards.

This factsheet has been compiled from information collected in April 2018.

22
Desmodur® eco N
by
A bio-based hardener for
Covestro AG coatings

PRODUCT NAME
Desmodur® eco N, part of the
Desmodur® line
PRODUCT DESCRIPTION
Hardener component for coating systems
FEEDSTOCK
Cornstarch
ORGANISATION
Covestro AG
EMPLOYEES
Over 15,000
COUNTRY
Germany

R&D START
2007
PRODUCT
MARKET ENTRY DATE
2015 Desmodur® eco N is the world’s first bio-based hardener for lightfast polyurethane coat-
ings which are typically used to protect a material’s layer. Commercial applications in-
PRODUCTION CAPACITY
20,000 tonnes PDI/year clude coatings for automotive, plastics, wood and industrial applications. The product is
expected to replace the existing petrochemical aliphatic hardeners in the long term. Due
PRODUCTION VOLUME
A few tonnes; Less than 1 % of capacity to a high sensitivity in the coatings industry to product changes, Desmodur® eco N is a
SALES (GLOBAL)
“near drop-in” solution. This means that it behaves similarly to and has a similar quality
Less than 1 % of the entire Desmodur® as its petro-chemical equivalents. This minimises adoption costs down the supply chain.
line; Expected double-digit growth of It is bio-based (70 %) and it reduces the carbon footprint compared to the average
Desmodur® eco through 2020/2021
footprint of comparable fossil-based products by 30 %.
INVESTMENT
Not disclosed SUCCESS
PRICE Covestro started its research into Desmodur® eco N in 2007. Eight years later, the prod-
Higher than its petro-chemical uct entered the market. The underlying aspiration of this development was to maintain a
Desmodur® equivalent competitive position on the market, as Covestro’s downstream customers seek using sus-
EARNINGS tainability to differentiate themselves on the consumer market. Along the way, Covestro
Break-even on investment is expected by secured critical financing to the product’s development and production entirely through
2020–2025
internal funds. One critical driver of success is that Covestro implements a joint pilot case
with Audi and BASF to demonstrate that the product performs similar to established poly-
CHARACTERISTICS urethane-based clear coats and can be applied in existing assets.
• 70 % bio-based
(ASTM D6866 standard)
PROSPECTS
• 30 % lower carbon footprint,
to comparable products Covestro continues to expand the product range with a variety of properties and extra
(i.e. aliphatic isocyanates) features like the recently introduced water-mixable version, the Bayhydur® eco, which fits
• Near drop-in character perfectly to the requirements in high performance waterborne wood coatings. In parallel
• Patent protected
• Trademarked Covestro is further engaged with the development of the next feedstock generation of
cellulosic- and waste biomass. The success of Desmodur® eco N may depend on the rep-
utation of bio-based materials in the coatings industry. If current trends continue, sales of
Desmodur® eco N are expected to grow by double-digits for the upcoming years.

23
 HISTORY Drivers of success
»» Covestro had the market knowledge to understand the
Desmodur® is used as a hardener for paints, coatings, adhe- evolving needs of its direct customers for bio-based and
sives, such as automotive (including Original Equipment Man- sustainable products already at an early stage. Covestro still
ufacturers (OEM), sports (e.g. footwear adhesives)), wood and enjoys a first-mover advantage.
furniture coatings as well as for plastic coatings. Essentially, »» Covestro succeeded to formulate a “near drop-in” solution
that behaves and reacts almost exactly as its fossil-based
Desmodur® eco N was developed as a bio-based alternative version. This minimised the adoption costs for customers
to Covestro’s existing fossil-based products and traded under down the supply chain.
the Desmodur® label, which are hexamethylene-diisocyanate »» Knowing its client portfolio, Covestro knew where to exactly
plug in with the marketing of its product.
(HDI) based.
»» The application of successful pilot cases such as with Audi &
BASF helped convince potential but reluctant clients.
Covestro initiated research to develop a bio-based aliphatic »» Covestro had the financial strength to dedicate all funds
isocyanate hardener in 2007. At that time, there was a belief internally, without putting the company at risk.
in the industry that such a hardener could not be developed.
The project was funded exclusively by internal R&D funds. It
was internally categorized as a low risk investment, as the Following the successful identification of the exact feedstock,
know-how for the technology and a rough idea of the desired Covestro was confronted with the challenge to identify a
feedstock already existed within the organisation. The prima- supplier. Many candidate suppliers had promising concepts,
ry risk was to identify a feedstock supplier with a sufficient but lacked the experience to produce a consistent quality in
quality. The result was a Pentamethylene-diisocyanate (PDI), the desired scale. This challenge was addressed by selecting
produced from fermented industrial cornstarch. potential suppliers on the basis of their practical experience
at the desired production scale and in the proper quality as
Covestro reports that the coatings industry is strongly sensitive well as their environmentally sound production methods.
to changes in product formulations, as small changes, impurities,
or by-products can lead to high adoption costs further down the The scepticism that the development of a bio-based aliphat-
supply chain. The industry is therefore reluctant to adopt new ic diisocyanate was not possible posed a financial risk, as
products. A bio-based alternative needed to behave as close potential clients could have been reluctant to adopt to the
to its fossil-based counterpart as possible. From the outset, new product. The initial success of Desmodur® eco N’s de-
Covestro pursued a vision to develop a bio-based product with velopment relied therefore strongly on the ability to prove
at least the same performance as established polyisocyanates. to stakeholders the “near drop-in” performance. To mitigate
To ensure this, Covestro involved external partners of the value the scepticism of potential clients, Covestro convinced Audi
chain already at an early stage of the project. and BASF to conduct a joint pilot case on the application of

SWOT ANALYSIS FOR DESMODUR® ECO N

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

”Drop-in” design to Slow adoption of new Marketing collaboration Global reputation that bio-
minimise adoption costs products in the coatings with large brands down based products struggle to
and adhesives industry the value chain (e.g. deliver a sufficiently high
Go-to-market strategy Audi & BASF) to create and consistent quality can
addressing end consumers Competes against well momentum impact the demand for the
instead of clients established and optimized product
petrochemical processes Reduced carbon footprint
High financial strength, contributes to the global Industry is characterised
limiting the risk exposure sustainable development by a slow adoption rate of
High recognisability of the (e.g. the UN’s SDGs) new technologies
brand, being attractive for Market preferences for Future low oil prices would
external partners sustainability are becom- make Desmodur® eco N
Product is available in ing more mainstream a less price-competitive
industrial scale at constant alternative
quality
24
A bio-based hardener for coatings

the fully developed product for an automotive paint coating. Product development was driven by customers down the supply
This served to demonstrate the “near drop-in” characteristic chain who seek to differentiate themselves on the consumer
of Desmodur® eco N and the fact that customers are able to market. A particular driver of this change was the automobile
work with the new product. OEM industry. This development put in effect pressure on
Covestro’s direct customers, which led Covestro to develop
Desmodur® eco N delivers a quality comparable to its petro- Desmodur® eco N to maintain a competitve position on the
leum-based counterpart, with the added value of being more coatings market. Currently, typical clients are those with a
sustainable. Accordingly, the product is sold at a higher price. corporate sustainability mission.
Thus, direct customers must be willing to pay a premium for
the sustainabily feature of the product. To ensure this, Covestro Covestro did not establish a new market in the long term,
uses an innovative push and pull marketing strategy. The but is in the process of transitioning its Desmodur® line
strategy pushes marketing, by approaching contact points in away from fossil fuels in an effort to maintain and enhance
companies down the supply chain, who are likely to share a Covestro’s long-term competitiveness on the market and to
common long-term vision about sustainability. Typical can- supports its sustainability goals.
didates are executive managers or marketing departments.
The strategy establishes market pull by marketing Desmo- In 2013 Covestro was the largest producer of HDI, capturing
dur® eco N to manufacturers of consumer products, which about half of the total (bio- and non-bio-based) market. Current
are customers of Covestro’s direct customers. Covestro thus market research expects that the global isocyanate market,
markets the product throughout the whole value chain of the of which HDI and PDI are only one segment, will grow from
coatings industry. a value of EUR 26.74 billion in 2016 to EUR 42.71 billion in
2022, at a compound annual growth rate of 8.02 %.
FUNDING
The industry reportedly invests heavily into R&D activities
Being a large company, Covestro had the financial strength to develop new bio-based raw materials, due to the antici-
to develop and commercialise the product exclusively with pation of good market opportunities from those. Covestro’s
internal financing, without putting the company at risk. The development of Desmodur® eco N can thus be understood
company states that it invests a significantly higher share of as a necessity to stay competitive.
its profits into R&D than other players in the industry.
The specific market of Desmodur® and similar products is a
In support of its bio-based activities, Covestro participates in a market with 5 major competitors: Covestro (DE), Evonik (DE),
Bio-based Industries Joint Undertaking (BBI JU) project under Vencorex (FR), Wanhua (CN) and Tosoh (JP), who together count
Horizon 2020, and receives funding for a different bio-based for 89 % of the total aliphatic isocyanate derivatives market.
technology under Horizon 2020.
REGULATORY ASPECTS
Covestro processes an intermediary input into its final prod-
uct and has contracted an external supplier that prepares Desmodur® eco N requires mandatory REACH registration,
the raw material (industrial cornstarch). Covestro was thus as any other chemical in the EU. The fact that the product is
not required to invest into a production facility for the raw bio-based has essentially neither facilitated nor complicated
material, and could continue derive the final product in their regulatory approval.
existing facilities for Desmodur®. The capital investment costs
for the product were thus relatively low.
ILLUSTRATION OF THE PRODUCTION STAGES
The “near drop-in” character of Desmodur® eco N implies OF DESMODUR® ECO N
that producers along the supply chain incur minimal costs to
Partners Covestro
transition away from the fossil based Desmodur® version.
Covestro managed to mitigate the financial risk, as the re-
quired capital investment was limited for Covestro as well
as its customers.
Biomass Fermentation Phosgenation & Derivation

MARKET INFORMATION HO Bio-based

+NH3 + 2 COCI₂
O PU-hardener
HO OH H₂N NH₂ O=C=N N=C=O
Desmodur® eco N is destined for markets with a high demand -CO₂
- 4 HCI Desmodur®
HO OH eco N 7300
for sustainable products, like coatings for wood and automo- -H₂O

biles, in which consumers are willing to pay a price premium Industrial PDA PDI
Sugar Pentamethylene Pentamethylene
for sustainability. Sectors that are stongly cost-driven or in (glukose) diamine diisocyanate

which the bio-based property has no added value to the user,

Source: Covestro
such as corrosion protection, are in turn not in focus.

25
 TECHNOLOGY INFORMATION ENVIRONMENTAL IMPACT
Covestro produces Desmodur® eco N from Pentamethyl- Desmodur® eco N is 70 % bio-based, and is made from a
ene-diamine (PDA). The PDA is produced in a fermentation non-edible corn (maize) variety. Non-validated estimations
process of industrial cornstarch, supplied to Covestro by an show that the production of one tonne of Desmodur® eco N
external supplier. corresponds to a land use of 0.44 ha corn. For the existing
production capacity of 20,000 tonnes, the equivalent is 8,833
Covestro’s PDA suppliers are engaged in the development of a ha. The production of sufficient Desmodur® eco N for the paint
second generation feedstock, for which cellulosic- and waste of 90 million cars would constitute a land use of 31,800 ha.
biomass are potential sources. The development is currently at
an early stage, with no anticipated release date at this point. Desmodur® eco N shows, according to Covestro’s internal
cradle-to-gate comparison with the industrial-average con-
Desmodur® eco N production is fully operational. All produc- ventional aliphatic petroleum-based alternatives, a reduction
tion infrastructure is in place to produce a volume of up to of the carbon footprint by 30 %. Furthermore, the synthesis
20,000 tonnes per year. The current production is small, and process has been reduced from four to two stages, improving
there is thus scope for economies of scale. Desmodur® eco N production efficiency.
is offered at a higher price than the product it replaces in the
long term, but according to Covestro at a competitive level. As already mentioned, Covestro chose its supplier, among
The Technology Readiness Level (TRL) is 9 (actual system others, based on how reliable and environmentally sound the
proven in operational environment). production method was. In order to ensure sustainability in the
long term, Covestro conducts regular LCA audits of its supplier.
Desmodur® eco N is protected by patents.

THE WAY FORWARD

Covestro will expand its product range with a variety of properties and extra features (e.g. Bayhydur® eco). The
feedback from customers is an important aspect, as changes in the formulations or unexpected behaviours of
the material can result in its customers turning to other providers. The development of extra features will be a
particular focal point to create a stronger value proposition.

On a broader dimension, Covestro believes the reputation of the quality of bio-based products an important com-
ponent of the future because bio-based versions tend to have a reputation of having variations in quality, which
needs to be consistent in the coating industry. If other players fail to deliver a promising product, the general
reputation of bio-based products may affect the reputation of Desmodur® eco N.

Market preferences of consumers for sustainability are becoming more mainstream. If this trend continues, it is
likely that other competitors will follow soon. Covestro expects double digit growth for Desmodur® eco N through
2020/2021 and still has a large scope for economies of scale. Desmodur® eco N is therefore able to compete
with other bio-based products.

This factsheet has been compiled from information collected in January 2018.

26
Lipex®
by
A bio-based alternative to
Novozymes remove fat stains

PRODUCT NAME
Lipex®
PRODUCT DESCRIPTION
An enzyme preparation, containing a lipase
used in detergents to clean fat stains
FEEDSTOCK
Sugar, Aspergillus oryzae microorganism
ORGANISATION
Novozymes
EMPLOYEES
6,245 employees
COUNTRY
Denmark

R&D START
Approximately 1990s
PRODUCT
MARKET ENTRY DATE
2002 Lipex® is an enzyme preparation containing a lipase. It is used as an ingredient in deter-
gents. As a component in the detergent, Lipex® degrades edible fats and oils. It is effective
PRODUCTION CAPACITY
Not disclosed across a temperature range 30–60 °C. The product replaces a part of surfactants (clean-
ing agents) or other ingredients in the detergent composition. These can be produced
PRODUCTION VOLUME
Not disclosed from vegetable or mineral oils. Lipex® is produced using a microorganism Aspergillus
SALES (GLOBAL)
oryzae. Sugar is used to feed the microorganism, which ferments producing the required
EUR 633 million (Household Care division), enzyme. Lipex® is 100 % bio-based and is biodegradable.
2017
SUCCESS
INVESTMENT
Product level: Not disclosed; R&D spending Lipex® has been on the market since 2002. It was the first enzyme in its class to achieve
at company level: 13.2 % of revenue stain removal at the first-wash. According to Novozymes, it is currently the only lipase
PRICE enzyme used in detergents. As such, it has no competitors among enzymes. Compared
Not disclosed to the surfactants it replaces, Lipex® is considered performance competitive: it achieves
EARNINGS comparable results at lower temperatures. Replacing detergent ingredients with enzymes
27.9 % (company level EBIT margin) can also lead to economic gains to detergent producers. The company has succeeded in
achieving economies of scale, rendering it a profitable product. Currently, Lipex® is used
CHARACTERISTICS by many major detergent brands.
• Classified as Readily biodegradable
(OECD 301) PROSPECTS
• Patent protected The prospects for Lipex® are positive. The company is continuously working on improving
• Trademarked the product to satisfy the requirements and needs of the market. The potential for lipase
class enzymes is not yet saturated in the detergent market. Between 25 % and 60 %
of detergents do not use enzymes, depending on the region. The main future growth is
expected to be seen in emerging markets, in Asia and Africa, where the proportion of
detergents that contain enzymes is lowest. Future GDP and population growth in these
markets is expected to drive growth. This is combined with customer demand for high-
er-performance detergents that are effective at low temperatures.

27
 HISTORY Drivers of success
»» Specific product formulations developed together with cus-
Novozymes is a biotechnology company, specialised in enzymes tomers, to fit their needs
and microbes, including the Lipex® product. The history of the »» Company strategy focused on innovation, with a high dedi-
company started in 1925, when Novo Terapeutisk Laboratorium cated R&D budget
was founded. Novozymes in its current structure was formed »» Attitudes and preferences of direct customers (detergent
producers): SDGs, triple bottom line important in their
in 2000 when Novo split into three different companies: Novo strategies
Holdings A/S, Novo Nordisk A/S, and Novozymes A/S. At the »» Financial strength of the company enabling it to finance
time, the company already had a portfolio of enzymes for continued research by internal means
both food and beverages and household care markets.

Lipex® has been developed as a result of the company’s high Hence in the 1990s, Novo scientists conducted further re-
focus on research and development. It is the result of more search to improve the lipase so it can clean at first wash.
than 10 year’s of research effort. The product based on this new lipase was Lipex®. It entered
the market in 2002.
Novo initiated research into lipases for use in detergents in
the late 1980s. They collaborated with a Japanese detergent When introducing Lipex® to the market, Novozymes needed to
producer, Lion, to develop the first fat-stain removing enzyme. convince customers that the product is efficient when washing
A microorganism, Thermomyces Lanuginosus, was identified as at lower temperatures, by hand and in different machines.
a good source of suitable lipase. The customer required high Consequently, additional resources have been devoted for
volumes of the product to provide to the Japanese market. testing its performance for different laundering methods,
The amounts required could not be generated using the T. different machine types, and different temperatures.
Lanuginosus. Hence, further research was conducted to find
a combination that allowed high yields that the customer At the time of market entry, Lipex® was the first product on
required. In this solution, another microorganism, Aspergillus the market which enabled removal of fat stains at the first
oryzae, was modified using the T. Lanuginosus genetic code. wash. Lipex® benefited from this first-mover advantage, gaining
Thus the predecessor of Lipex® entered the market. acknowledgement from major detergent producers. According
to the company, it is currently the only lipase enzyme on the
However, customer feedback indicated that detergents with detergent market.
this enzyme removed fat stains only after multiple washes.

SWOT ANALYSIS FOR LIPEX®

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Documented improved Detergent formulation Improving living standards Traditional consumer

performance of detergents with enzymes requires in emerging markets creat- habits, e.g. washing at high
when using Lipex® as know-how and attention to ing demand for better-per- temperatures
ingredient raw material storage and forming products
transportation Regulations favouring
First-mover advantage Drive towards innovation surfactants over enzymes
among detergent produc- in emerging markets
Documented lower impact ers with the purpose to
on the environment improve wash performance Sustained low costs of
at low temperatures and competing products,
Detergent producers can reducing the adoption
save costs by replacing improve sustainability
profile of their products rate of high-performance
other ingredients with enzymes
enzymes
Pressure on detergent
prices in regions where the
market is more saturated,
e.g. the US
28
A bio-based alternative to remove fat stains

FUNDING do so, according to a Novozymes presentation. Many such

markets are experiencing an increase in income per capita,
The research and development of lipase enzymes, including where customers are also increasingly demanding improved
Lipex® has been funded internally. The company did not re- performance.
ceive EU or any other public funding for this specific product.
The company has taken part in various R&D projects and When Lipex® is used in an enzyme solution designed to replace
received EU funding for other activities. This includes four a portion of surfactants, it can be done in a cost-beneficial or
projects under Bio-based Industries Joint Undertaking (BBI cost-neutral way. Weight-wise, a small amount of enzymes
JU) scheme on development of new bio-based products. No- can replace a significant proportion of surfactants, according
vozymes has taken part in a number of other H2020 and in to a research report by Novozymes.
FP7 projects related to development of industrial enzymes
and novel applications of enzymes in various industries: food, In addition, its price does not fluctuate when oil prices change.
medical, and biorefinery. Hence, it offers a high stability in detergent production cost
and the price to final consumers. Overall, replacing other
R&D is at the centre of the company activities, with around ingredients with enzymes can lead to economic gains for the
23 % of its employees working with R&D. At company level, detergent producer.
R&D spending constitutes around 13 % of revenue.
REGULATORY ASPECTS
Each of the company’s divisions has an application development
unit, with the purpose of keeping the R&D and commercial Lipex® performs well under low temperatures, while it reduces
sides close together. A Portfolio Board manages the overall CO₂ emissions and lowers energy consumption. Therefore, a
pipeline. They evaluate potential projects according to their key market segment for Lipex® is detergents that seek to
strategic and financial impact, their risk, contribution to CSR obtain CO₂ emissions or green labelling. Examples of labelling
goals, and the involved resource utilisation and resource needs. schemes for laundry products include the EU Ecolabel and
The overall goal is to achieve a balanced portfolio across areas. Nordic Ecolabel.
As such, to acquire resources and approval for a specific pro-
ject, the Portfolio Board must be convinced of its potential In general, the regulatory status of enzymes in most countries
and endorse its initiation. is set according to product control procedures for chemicals.
Enzymes are typically listed in chemical inventories. Examples
MARKET INFORMATION of such inventories are EINECS in the EU and TSCA in the
US. Laws and regulations regarding the use of chemical and
Lipex® is used as an ingredient in laundry detergents. The biochemical products are different across countries, and this
customers are thus detergent producers. Detergent patents diversity can be a challenge. According to Novozymes, product
by Procter & Gamble, Unilever, and Henkel AG include Lipex® standards in emerging markets often favour surfactants over
as one of their preferred ingredients. enzymes, providing a barrier to growth.

According to the International Association for Soaps, Deter- TECHNOLOGY INFORMATION

gents and Maintenance products, the European laundry care
market was worth EUR 13.5 Billion in 2016, a small growth Lipex® is an enzyme preparation containing a lipase. Lipases
of 0.8 % from 2015. Over the last decade the growth has are enzymes that catalyse the hydrolysis of fats. The main
been more substantial, at almost 30 % (about 2–3 %/year), industrial application of this product is as an ingredient in de-
according to a Novozymes presentation. tergents. It replaces a portion of surfactants8 in the detergent
composition. The function of Lipex® is to target specifically
The global export market for enzymes and enzyme preparations fat and oil stains in the laundry.
was around EUR 4.5 Billion in 2016, according to International
Trade Centre Statistics. The value has steadily increased over Lipex® is produced using the microorganism Aspergillus oryzae.
the last decade. In the enzyme market, Novozymes is the A genetic code for extracting lipase is derived from another
largest global producer. It competes with other biotechnology microorganism Thermomyces Lanuginosus.
firms, such as DuPont (USA), DSM (Netherlands), and Ama-
no Enzyme (Japan). In addition, it competes with surfactant Thermomyces Lanuginosus is a compost fungus that is found
producers, such as BASF. in spoil tips, senescent grass, leaves, sewage, and peat and
bog soils. It produces a number of enzymes, some of which
The future market potential is highest in emerging markets: have broad industrial uses. A. Oryzae is a domesticated fungus
in Asia-Pacific and Africa. In the EU and the US, the majority species, used in fermentation required to produce traditional
of detergents already use enzymes, including Lipex®. Mean- Japanese foods, e.g. soy sauce, sake, miso (fermented bean
while, in emerging markets, less than half of the detergents paste).

8
Surfactants are the active compounds in detergents that remove stains. 29
 While T. Lanuginosus produces a good lipase enzyme suited Compared to surfactants produced from vegetable oil, the use
for industrial production, it does not ferment well. On the other of enzymes is thus likely to result in a lower net land use. In
hand, A. Oryzae has excellent fermentation properties. Hence addition, surfactant manufacturing uses chemical processing,
the properties of both are combined in producing Lipex®. In while Lipex® production involves a bioprocess. Compared to
addition to genetic changes to Aspergillus oryzae to improve a chemical process, it reduces the need for toxic catalysts in
the effectiveness of the enzyme, modifications to the enzyme the production process. It also generates lower amounts of
protein itself have been introduced. waste and by-products.

The process of Lipex® production using modified Aspergillus Positive environmental impacts are seen at the stage of the
oryzae involves two main steps: use of final product (detergent). Adding enzymes to detergents
›› Fermentation. At this step, A. oryzae is fermented under improves washing performance at the same water tempera-
laboratory conditions. During fermentation, it produces ture. Hence, to achieve the same result, a lower temperature
the required enzyme, triacylglycerol lipase. The enzyme suffices. Thus, less energy is needed, resulting in CO₂ savings.
is separated from the A. oryzae and purified. Novozymes studies indicate that 150–450 g of CO₂ per wash
›› Formulation. This is the stage where the final product can be saved for temperature reductions of 10–30 degrees
is made, tailored to the specific application and cus- Celsius. However, achieving these results relies on consumers
tomer requirements (e.g. granulated or liquid form and actually using the lower temperature settings.
specific colour).
After the wash, some of the water goes directly to the en-
ENVIRONMENTAL IMPACT vironment. The detergents entering the water bodies can
contribute to water toxicity. Lipex® has been tested for its
Lipex® is an alternative to petroleum and vegetable oil based effects on aquatic organisms. Based on the results, Lipex® is
surfactants. A small amount of enzymes is used in a de- not classified as toxic to the environment. Moreover, enzymes
tergent, compared to the amount of surfactants it replac- require less water to be “neutralised” compared to surfactants.
es. While production of enzymes requires sugar to feed the Hence, replacing a proportion of surfactants with enzymes
microorganisms, the amount of sugar necessary is small in a detergent reduces the overall environmental impact of
compared to raw materials required to produce surfactants. the detergent. Lipex® is classified as readily biodegradable.

THE WAY FORWARD

The company is continuously working on improving the product and keeping up with market demand. The poten-
tial for lipase class enzymes is not yet saturated in the detergent market. The main future growth is expected
in the emerging markets, where the proportion of detergents that contain enzymes is lowest. Future GDP and
population growth in these markets is expected to drive growth. This drives demand for higher-performance de-
tergents that are effective at low temperatures. Increasingly, environmental awareness also plays a role.

To be successful in these new markets, Novozymes will need to overcome some challenges. Washing habits vary
in different parts of the world. What works in Europe cannot be directly adapted to other markets. Hence testing
the product with different washing methods (e.g. washing by hand) is essential. The product will be tailored as
needed to fit these conditions.

Novozymes is confident they will continue to be the market leader of lipases, thanks to their extensive knowledge
and many years of experience.

This factsheet has been compiled from information collected in April 2018.

30
Rilsan® HT and
Rilsan® Invent Continued innovation to achieve
by long-term success
Arkema

PRODUCT NAME
Rilsan® HT and Rilsan® Invent
PRODUCT DESCRIPTION
Bio-based, high performance polymer
FEEDSTOCK
Castor oil
ORGANISATION
Arkema’s High Performance Materials
segment, Specialty Polyamides
EMPLOYEES
Circa 19,800 at company level, 1,000
under Specialty Bio-Based Polyamides
COUNTRY
France

R&D START
PRODUCT
Early 2000s – Rilsan® HT
Late 2000s – Rilsan® Invent Rilsan® is a 100 % bio-based polyamide (PA-11) produced from castor oil (vegetable oil). It is a
high-performance polymer in the family of nylons, used in e.g. the automotive industry, sports
MARKET ENTRY DATE
2009 (Rilsan® HT); 2011 (Rilsan® Invent) equipment, and electrical applications. Specific PA-11 based products have been developed to
fit specific applications. This factsheet focuses on two of the most recent sub-products, Rilsan®
PRODUCTION CAPACITY
In the range of 10s of thousands t/year of HT and Rilsan® Invent. The former is a highly flexible and temperature resistant polymer used
amino acid monomer in automotive applications and the latter has been developed for use in 3D printing.
PRODUCTION VOLUME
Close to full capacity SUCCESS
Rilsan® products have stayed on the market for many years, due to continuous invest-
SALES (GLOBAL)
EUR 2 billion in 2017 – Advanced Materials ments in R&D and continuous development of new variants and applications. In the early
(N/A at product level) 2000s, Arkema realized they could modify Rilsan® to compete with rubber and steel parts
INVESTMENT in the automotive industry. Rilsan® HT was launched in 2009, initially targeting high-end
Planned EUR 300 million for a new brands. A major achievement came in 2012–2013, when large vehicle manufacturers
production plant started to use Rilsan® HT. Continuing their R&D focus, and seeing growth potential, Arke-
PRICE ma developed a product line for 3D printing, Rilsan® Invent. Initial uses of PA-11 fine pow-
~ 50 % higher than metal (Rilsan® HT) but ders in 3D printing began in the 1990s. To achieve properties more suited to the market,
offering a full cost solution up to 50 %
cheaper than metal the powders were dramatically improved in the 2000s. Rilsan® Invent was launched in
2011. The new product is an improved Rilsan® Fine Powder fully dedicated to 3D printing.
EARNINGS
Break-even expected in 2018 A milestone was achieved in 2017, when Rilsan® Invent was included in the HP Open Plat-
form. This is a collaborative platform where customers, 3D printer manufacturer HP and
raw material providers work together to address specific industry needs.
CHARACTERISTICS
• Rilsan® – 100 % bio-based;
PROSPECTS
Rilsan® HT – 70 % bio-based;
Rilsan® Invent – 95–98 % bio-based The prospects for Rilsan® products are positive. The higher price when compared to metal
• Net CO₂ emissions of Rilsan® pro- is offset by lower costs when Rilsan® HT is formed into car parts. This represents an overall
duction 41 % lower than fossil-based cost reduction to customers, and is illustrated in its increasing uptake by smaller manufac-
polymer
• Patent protected turers. In this respect, Arkema expects an annual 30 % increase in demand for Rilsan® HT in
• Trademarked the coming years. The 3D printing market is expected to increase by 20 %/year until 2020.
Rilsan® Invent is expected to grow faster due to its bio-sourced nature and documented
high performance. To meet these demands, investments of EUR 300 million have been ear-
marked for building a new production plant to increase the capacity by 50 %. 31
 HISTORY Drivers of success
»» Working with customers to develop products to meet desired
The original PA-11 polymer based on castor oil was first specifications
patented in 1947. The industrial plant started production in »» Able to reduce overall costs to customer in using the product
despite higher product sales price than competition
France in 1949, the same year the product gained the brand
»» Hedging risk through multiple products and sales markets
name Rilsan®. The Marseille monomer plant was built in 1955. »» Creating partnerships with suppliers and customers
Originally competing with nylon in textile applications, it was »» A strong focus on R&D
eventually outcompeted by polyesters and other polyamides »» Vehicle emission regulations create preference for lighter
vehicle parts thus increasing demand
which could be produced on a larger scale. However, the de- »» As a large company with long track record, it relies on inter-
velopment of bio-plastics applications started early, mitigating nal finance, product development experience, network, supply
the effect of this downturn. chain management, and market access

The subsequent history was marked by innovation and ex-

pansion to different markets and applications. For example, it was marketed to and used by high-end vehicle manufac-
Rilsan® brand products are found in the automotive industry, turers. To broaden the market reach, the company focused
sporting equipment, healthcare, and electronics. In practice, on improving and illustrating Rilsan® HT’s performance. They
the various Rilsan® brand products are based on the bio-based also demonstrated that the overall costs of using this material
polymer PA-11, but modified to obtain desired properties for are lower than using metal. Since 2012–2013, a number of
different applications. large European vehicle manufacturers have started using
the product. Currently, US and Asian markets are starting to
The ownership of the brand changed numerous times over follow this example.
the years, but Rilsan® division, which gradually became a
wider specialty polyamides line, maintained its autonomy. It Seeing potential in the 3D Printing market, in the late 2000s,
has been under the current structure in Arkema since 2004. the company accelerated the development of a version of
Rilsan® Fine Powders specifically for 3D Printing. The product
Rilsan® HT and Rilsan® Invent result from Arkema’s contin- resulting from this research, Rilsan® Invent, was launched in
ual R&D. To remain competitive, Arkema maintains its R&D 2011. Making the product market-relevant and to enhance the
spending at 2 %–8 % of sales. This is used to develop novel reach potential, Arkema formed a partnership with HP in 2017.
products and applications. In the early 2000s, they realised
Rilsan® could be modified to withstand high temperatures. This In terms of sales of both Rilsan® HT and Rilsan® Invent, the
would allow it to compete with metal as a raw material for car company targets markets globally: Europe, North America,
parts near the engine. The result of this research was Rilsan® and Asia. This global strategy is used by the company more
HT (High Temperature). Rilsan® HT was launched in 2009. As generally. The company finds that this helps mitigate the risks
it was 50 % more expensive per kilogram than the metal posed by fluctuations in oil prices and changes in demand
alternative, this presented a potential initial barrier. Initially, that occur due to changing regulations.

SWOT ANALYSIS FOR RILSAN® HT

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Long R&D tradition Higher costs compared to Favourable policy agenda Strong competitor pricing
fossil fuel alternatives (e.g. emissions reduction,
Documented higher LCA requirements) Oil or feedstock price
performance than Sustainability is not the fluctuations
competing products main customer priority Interest from large
customers Changes in national
Global presence, hedging regulations
risks in different markets
Lower cost of processing
material into parts
32
Continued innovation to achieve long-term success

FUNDING The global market for bio-based polyamides is experiencing

a growth rate of about 15 % per year. Arkema itself is plan-
The development and commercialisation of the products has ning to increase PA-11 production by 50 %, supported by
been funded internally. The company has applied profits from new investment in capacity. This will involve building a new
existing sales to finance further R&D and commercialisation production facility in Asia, for which EUR 300 million have
efforts related to the new Rilsan® based product applications. been allocated.

Bio-based materials are a strategic area for the Arkema Group. In the automotive market, Arkema expects to increase Ril-
Arkema dedicates around 75 % of the overall R&D budget to san® HT production by 30 %/year, since the market is still
sustainable development, including bio-plastics. This budget growing and not saturated. This trend will be supported by
is used to continue investing in the development of new bio- a number of OEM manufacturers following the example of
based and hybrid applications. Rilsan® HT as well as the new the large vehicle manufacturers, who have started using the
Rilsan® Invent are examples of forward-looking investments. product. Regulation in terms of vehicle emission standards
is an important driver for Rilsan® HT.
In general, Arkema is involved in many European and
national collaborative R&D projects with bio-based con- 3D printing is an innovative area, which is likely to grow as
tents. This includes projects under H2020 and FP7 funding the technology becomes more mainstream. Growth factors
mechanisms. This covers different projects in three main include a variety of possible applications: attractiveness due
areas: 1) development of biotechnology for reusing CO₂ in to reduced development time and costs; design freedom
chemicals and plastics 2) development of crops suitable allowing complex and custom parts to be produced; and de-
for industrial processes, and 3) conversion of waste into centralised manufacturing.
chemicals and biorefinery.
The 3D printing market has grown by 30 % annually for the
past 4 years and is expected to grow further by 20 % per
MARKET INFORMATION year until 2020.
The price of Rilsan® HT is higher than competing products
by about 50 %. For customers to produce tubing from metal REGULATORY ASPECTS
or alternative materials, the process involves two additional
main cost elements: processing and assembly. Assembly costs Regulations that stimulate the demand for Rilsan® HT include
are roughly the same regardless of the material. However, those related to transport emissions and requirements re-
processing Rilsan® HT incurs significantly lower costs than lated to LCA.
processing metal. As a whole, according to the company, the
total costs to the customer of producing parts using Rilsan® In terms of transport emissions, regulations influence de-
HT are therefore reduced by about 50 % compared to tra- mand positively by requiring car manufacturers to reduce
ditional inputs. their CO₂ footprint. They seek alternative materials and other
ways to decrease overall fuel consumption of vehicles. Since
No special equipment is required to process Rilsan®HT – reg- Rilsan® HT is lighter than alternatives, it can help fulfill these
ular equipment used for other types of PA materials can be aims. Such regulations are well developed in the EU, namely:
employed. Hence, while the actual price differential is not emission reduction targets for new vehicles (EU Regulation
reduced, overall costs to clients of using Rilsan®HT are lower. (EC) 443/2009) and complemented with CO₂ labelling of cars
(“Car labelling” Directive 1999/94/EC). A new proposal for
In general, bioplastic production constitutes around 1 % of post-2020 targets for emission reductions was presented in
overall plastic production, of which polyamides (PA) constitute November 2017. Emission standards exist in some US states
nearly 12 %. Rilsan® family constitutes more than 50 % of and are expected in China.
the bio-based PA.
Possible requirements for performing life-cycle assessments
(LCA), such as green or eco-labelling, have the potential to
INDICATIVE MARKET SIZE OF RILSAN® PRODUCTS improve the market position of Rilsan® family products. In
the presence of such requirements, the industry is inclined to
purchase products that enhance their final product’s LCA. In
this respect, Rilsan® HT and Rilsan® Invent offer added-value
1% 12 % 50 % to the automotive and spare parts (3D printing) industry. EU
regulations that have such elements include: End of Life of
Vehicles Directive (2000/53/EC), Waste Framework Directive
(WFD, 2008/98/EC), and EU Ecolabel (Regulation no 66/2010).
Regular plastics Bio-based Polyamides
Bio-plastics Rilsan® products

33
 TECHNOLOGY INFORMATION ENVIRONMENTAL IMPACT
Rilsan® is a 100 % bio-based polyamide (PA) produced from Rilsan® originates from 100 % bio-based feedstock, castor
castor oil. It is a bio-plastic in the family of nylons9, dubbed oil. The geographical origin is predominantly India. Feedstock
PA-11. for producing PA-11 and its associated products is derived
from the castor oil plant, which is grown in tropical areas. To
It is derived from castor oil, via a multi-step chemical trans- secure a steady and reliable supply, in 2013, Arkema partnered
formation process. Two types of plants are required to produce with a castor oil producer in India. This supplier delivers most
PA-11. The first type is a monomer plant, which transforms of the feedstock required. The castor oil plants can grow on
castor oil into an amino acid. 10 The process also results in marginal lands, in water scarce conditions.
several co-products that are used in cosmetics and lubricants
industries. The second type plant is a polymerisation plant, Arkema has a CSR strategy in place, which includes expec-
which converts the amino acid monomer into the polymer tations towards suppliers. The code of conduct for suppliers
(a long chain of repeated molecules). The result is Rilsan®. includes items regarding human rights and labour standards,
Manufacturing of the specific products (e.g. Rilsan® HT and environment, business ethics and transparency, and suppliers
Rilsan® Invent) involves combining the bio-based amino may be audited to assess compliance.
acid with other monomers. This brings new properties like
high temperature resistance, as is the case for Rilsan® HT. An eco-profile assessment of Rilsan® conducted by Arkema
For Rilsan® Invent, the bio-based amino acid monomer is shows that the total gross energy required to produce 1 kg
polymerised using a process specifically designed for 3D of PA-11 is 162 MJ/kg. This is 22 % lower than comparable
printing requirements. Both Rilsan® HT and Rilsan® Invent petroleum-based plastic PA-12. Net CO₂ emissions of produc-
are at Technology Readiness Level (TRL) 9 (actual system tion are 41 % lower than PA-12. This improvement is lower
proven in operational environment). for Rilsan® based products that contain less than 100 % bio-
based polymer. Rilsan® HT contains 70 % PA-11 and Rilsan®
Arkema is the only producer of this type of polymer (PA-11) Invent powders contain 95–98 % PA-11.
in the world.
Further impacts across the life-cycle depend on the applica-
tion. For example, Rilsan® HT, which is used to manufacture
automotive parts, is lighter than substitute materials, hence
reducing fuel consumption and emissions. Overall, it is esti-
mated that 30–40 % less CO₂ is generated over the life-cycle
of (pure) PA-11 compared to PA-12.

THE WAY FORWARD

The outlook for the Rilsan® product line is positive as sales volumes are expected to continue to increase. The
main drivers behind this development are sustainability commitments among customers and emission regu-
lations. More vehicle manufacturers are expected to switch to Rilsan®HT, as it contributes to fuel efficiency by
reducing overall vehicle weight. Arkema expects growth rates of 30 %/year in the automotive sector, as more
manufacturers are expected to follow the example of large ones already using Rilsan® HT.

The 3D printing market is experiencing rapid growth, and regulations that support bio-based materials may help
spur demand for bio-plastics. Rilsan® Invent has demonstrated better impact resistance than competitors, which
is one of the main characteristics motivating customers, e.g. in aeronautics. Due to this and its bio-based nature,
Rilsan® Invent is expected to grow faster than the market average of 20 %/year.

Overall demand for PA-11 is already becoming higher than the production capacities currently available. To keep
up with the trend, Arkema is planning to build new monomer and polymer production facilities. To this end, Arke-
ma has earmarked funds in the range of EUR 300 Million.

9
Its chemical formula contains 11 carbon atoms, hence dubbed PA-11, or nylon 11. Rilsan® is the brand name of PA-11
10
11-Aminoundecanoic acid is obtained from castor oil via: transesterification, pyrolysis, hydrolysis, hydrobromination, and amination

This factsheet has been compiled from information collected in April 2018.

34
Wheat bran
disposable
tableware
An alternative to disposable
by plastic and paper tableware
Biotrem

PRODUCT NAME
Wheat bran disposable tableware
PRODUCT DESCRIPTION
Tableware such as plates and bowls made
from wheat bran
FEEDSTOCK
Wheat bran, i.e. the hard outer layer of
the grain
ORGANISATION
Biotrem
EMPLOYEES
15 full time direct employees (2017)
COUNTRY
Poland

R&D START
1990s in relation to the production process PRODUCT
MARKET ENTRY DATE Biotrem offers a range of fully bio-based and biodegradable disposable tableware, includ-
2015 (EU) ing plates, bowls, and cups, produced from compressed wheat bran. Bran is the hard outer
PRODUCTION CAPACITY layer of the grain and is a by-product in the production of refined grains. Biotrem products
15 million pieces /year (EU) are used by restaurants, event organisers, catering companies and private consumers for
PRODUCTION VOLUME serving hot and cold meals and offer an alternative to disposable tableware made from
10 million pieces /year (EU) paper or plastic.
SALES (GLOBAL)
Not disclosed SUCCESS
The manufacturer was founded in 2012 and has successfully attracted sufficient private
INVESTMENT
EUR 3.25 million for the project to and public (EU and national) funds for R&D, testing, and establishing a commercial pro-
establish the production plant; EUR 1.75 duction facility of wheat bran tableware in a rural area of north east Poland. The products
million for R&D have been commercially available since 2016 and are currently sold in 40 countries.
PRICE Biotrem’s business model incorporates the core principles of circular economy: It supports
Circa EUR 0.25/piece (wholesale an agri-food system designed to prevent losses and waste and to recover raw materials.
packaging); EUR 0.4/ piece (retail
packaging), or about 5 times the price of
PROSPECTS
plastic plates
The prospects for Biotrem tableware are positive. Global demand for disposable table-
EARNINGS
Not disclosed
ware products has grown in recent years. At the same time, many consumers have be-
come more focused on sustainability aspects. The company has been expanding their
network of distributors and engaging in efforts to support their expansion on promising
CHARACTERISTICS
international markets. The price difference compared to traditional products is expected
• 100 % bio-based
• Biodegradable in 30 days (certified by to decrease via improvements in the production process and economies of scale. The pat-
DIN Certo) ented production technology allows for feedstock flexibility. The company is investigating
• Production process certified at food the possibility of using alternative feedstocks, e.g. algae, cassava and other agri-food
production safety level by BRC
• Patent protected technology industry by-products.
• Trademarked (global)

35
 HISTORY Drivers of success
»» Commitment of the inventor and his knowledge of feedstock
The wheat bran tableware production process was invented in and his network in the milling industry
the 1990s by a professional miller. He saw the potential in the »» Ability to establish a good management team to move the
higher value utilisation of wheat bran. Biotrem was founded product from research to commercialisation
in 2012 to capitalise on this invention. Research through to »» Availability of and capacity to attract public funds
»» Hedging risk through multiple sales lines in terms of geo-
prototype development (TRL 1–6) was performed by the in- graphical outreach, as well as branding efforts
ventor prior to the founding of Biotrem. Further product and »» Customer trends towards sustainable practices
process development leading up to the establishment of the »» Availability of feedstock and proximity of the production
plant to flour mills supplying wheat bran
commercial production plant in 2015 (TRL 7–9) was carried
out under the new company, Biotrem.
To address this, the company has dedicated resources to influ-
With the founding of the company, the inventor formally took encing consumer perceptions and has engaged in certification
up the responsibility for R&D and technology development. efforts. The consumer perceptions are targeted by involving video
Additional critical roles were assigned to a newly hired senior bloggers who act as ambassadors, and by engaging people at
management. These include a CEO responsible for manage- events and schools. Safety concerns have been addressed by
ment, strategy and investment processes, and a Commercial conducting tests and consequently obtaining certifications. The
Director responsible for sales and for building the network of company also takes part in various competitions. It is expected
company representatives worldwide. that such participation increases visibility and if awards are
won, this will positively influence customer perceptions.
To launch the commercial-scale production, investments in
R&D and in a production plant were required. The company Price competitiveness has also been a challenge: Biotrem is
actively sought public and private financing. Public funds have more expensive than “traditional” products. Further efforts
been used for the establishment of the production plant and are required to reduce costs through economies of scale. To
for R&D and branding. Biotrem also worked in other ways that end, the company is extending its sales channels and
to improve their financial resources. For example, they have distribution networks. In particular, they focus on expanding
devised cooperation agreements with business partners, in their presence in the most promising international markets,
which cost-sharing schemes are set-up. Currently, Biotrem is where sustainability concerns play a significant role in con-
looking into new ways to approach funding. They are planning sumer choices. These efforts are expected to be accompanied
to launch a crowd funding campaign and are considering to by increased production capacities and volumes, through
become a publicly traded company. building local production facilities in other parts of the world.

Biotrem tableware has been commercially available since 2016. The company is aware that using wheat bran as feedstock
Until now, demand has been lower than expected. One reason could be a limiting factor today in some markets and possibly
for this is the different properties of the products compared to even more of a challenge in the future, largely due to consumer
“traditional” disposable tableware made from paper or plastic.

SWOT ANALYSIS FOR BIOTREM TABLEWARE

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Founder‘s readiness to pro- Product is very different Market preferences – A market with an
vide in-kind contribution in from the “traditional” mainstreaming of sustain- increasing number of
the early phases products it competes with ability demands (SDG) ‚sustainable‘ and/or
bio-based choices for
Patents and technology No certification that Favourable policy agenda consumers
flexibility regarding demonstrates better in relation to waste and
feedstock environmental peformance food loss reduction Sustainability/acceptability
than “traditional” products of feedstock may be
Access to low-cost questioned in the future
feedstock (wheat bran, High production cost and
corn bran, cassava by- price
products, seaweeds)
Wide spectrum of manage-
ment skills in company
36
An alternative to disposable plastic and paper tableware

trends towards gluten-free products. Therefore the company not yet possible. A pack of 10 Biotrem plates (24 cm) can be
has started R&D on alternative feedstocks. Biotrem technology purchased online for around EUR 4. While being compararable
is flexible, and can be adapted to use other types of feedstock. to the price of other bio-based disposable products, up to 50
Examples being tested include algae and cassava by-products. regular white plastic plates can be purchased at the same price.
Considering this price differential, the market opportunities
FUNDING for Biotrem tableware in the immediate future lie with ‘green’
consumers that are less driven by price considerations, i.e.
In the period prior to the founding of Biotrem, R&D activities are willing to pay a ‘green premium’.
were sustained by the inventor’s in-kind contribution and his
family’s milling company. To capture ‘green’ consumers from across the world, the
company is pursuing growth by expanding their presence inter-
When the company was founded, the current CEO and her nationally. Currently Biotrem sells its products in 40 countries.
business partners brought in some capital for R&D and the Its clients are restaurants, caterers, bars, organisers of large
machinery. They also brought in the expertise and capability to events (e.g festivals), and wholesalers. With a future expan-
succesfully attract available public funds. Along the different sion of distribution channels and sales networks, supported
stages of commercialisation, the company has relied on EU by intense marketing efforts, the company expects that the
and national public funding. This includes using Horizon 2020, business-to-business customers will be supplemented by an
and European Structural and Investment Funds (ESIF) to reach increasing number of end consumers.
the current level of business and technology advancement. An
ESIF-funded project under the Polish Operational Programme Biotrem production capacity is currently at 15 million pieces
for Innovative Economy has been instrumental in providing of disposable plates or bowls a year. Currently, production is
finance for the building of Biotrem’s production plant. The based on orders received and sales have been modest so far.
project value was EUR 3.25 million with EUR 1.35 million in However, Biotrem tableware has the potential to reach its
EU contribution from the European Regional Development maximum annual production volume in the medium to long-
Fund (ERDF). Other sources of funding have included private term. The company expects to achieve this by 2018–19, due
funds, bank loans, EU and national funds specifically earmarked to positive changes in demand driven by attitude shift and
for SMEs. This includes EU support for a feasibility study on regulation and supported by their targeted marketing efforts.
how to successfully commercialise the technology (through Therefore, the company is currently discussing with a number
the Horizon 2020 SME instrument), and branding support to of potential partners regarding further large-scale commercial-
assist in taking the product to relevant markets (through the isation, including building new production facilities. Achieving
Go To Brand Project co-financed by the ERDF). this would provide for economies of scale thus improving its
competitiveness on the market.
Biotrem is also taking part in an ongoing ESIF project to
improve the production process. The goal of the project is to REGULATORY ASPECTS
achieve a more aestetically appealing product, and reduce
energy consumption. This is a EUR 3.3 million project under Legislation that provides favourable conditions for Biotrem in-
Poland’s Smart Growth Operational Programme. EU contri- cludes waste-related legislation and initiatives aimed at reducing
bution constitutes EUR 1.8 million. food losses along production chains. Initiatives in terms of waste
legislation play a role in influencing demand. For example, a
Overall, the company estimates to have spent over EUR 5 possible ban of disposable products made from plastic at a
Million on R&D to date, including EUR 3.25 million that were national or municipal level could mean that customers need to
put into building the production plant. seek alternative types of tableware. Specific initiatives on the
table include EU Strategy for Plastics, the proposed EU Directive
MARKET INFORMATION on Packaging Waste, and programmes on plastics in national
and regional waste management plans in specific countries.
The main types of disposable tableware traded globally are According to Biotrem, the French ban on plastic disposables
plastic and paper tableware products. The global export market (from 2020) and a ban on plastic in New Delhi have generated
of such products has grown in the last few years to about large interest in Biotrem products in these markets.
EUR 22 billion in 2016. At the same time, growing environ-
mental awareness among businesses and consumers as Initiatives to reduce food losses could play a role in encour-
well as legislation creates a market niche for alternatives. To aging investment in Biotrem technology. Relevant initiatives
take advantage of this development, more companies offer in this area stem from UN Sustainable Development Goal
products made from alternative materials such as sugar cane, (SDG) 12.3 ‘to […] reduce food losses along the food produc-
bio-based polymers, bamboo, or banana leaves. tion and supply chains’. Initiatives in this area promote the
valorisation of agricultural raw materials and emphasise the
Currently, Biotrem products compete directly with other bio- need for reduction of food losses from the food processing
based disposable tableware, at a comparable price level. sector. Wheat bran is one such by-product, where development
Competing with plastic or paper products in terms of price is of high-added value applications can contribute to this goal.
37
 TECHNOLOGY INFORMATION Wheat bran is the hard outer layer of the grain. It is part of
the whole grain, and a by-product of milling in the produc-
Biotrem tableware has been commercially available since 2016 tion of refined grains. The majority of bran is used as animal
and is sold in 40 countries. The Technology Readiness Level feed and a smaller fraction as a source of dietary fiber by
(TRL) is considered to be TRL 9 (actual system proven in the food industry. According to Biotrem, the bran that is used
operational environment), although actual sales volumes are would otherwise be unutilised or under-utilised. As such, the
still assessed to be modest. Biotrem tableware is made solely use of bran to produce tableware represents a value added
from wheat bran and water. The bran is pressed and baked in component of this raw material.
a single production cycle. The shaping is achieved through the
application of heat and high pressure. A small amount of water The production process requires only bran and water. No
is added, depending on the moisture content of the raw bran. further ingredients are used. The process of shaping Biotrem
tableware involves using high temperature and high pressure.
The products are designed and certified for short-term con-
tact with warm or cold, processed, or unprocessed food. They Biotrem products are an alternative to most disposable ta-
can be safely used in ovens or microwave ovens. In addition, bleware, such as that made from plastic or paper. After being
the manufacturing process is fully automated and designed used, the products can be composted. The products are fully
to comply with food safety standards, minimising human biodegradable: it takes 30 days for them to decompose through
contact with the product. The process has been certified at composting. Biotrem is certified by DIN Certco, under a certifi-
a food production safety level, and thus complies with strict cation scheme for products made of compostable materials.
standards that typically apply to food production.
According to company estimates, 1 kilogram of wheat bran
Biotrem is protected by a number of international patents with plates or bowls generates around 1.3 kg of CO₂e, consid-
respect to both the production method and materials. This ering the whole wheat cultivation process, transportation,
allows for the possibility to include licencing to third parties processing, and utilisation. This compares to about 8.5 kg
as a business model in the future. of CO₂ generated for the production of 1 kg of polystyrene
disposable plates or cups. While a single polystyrene plate is
ENVIRONMENTAL IMPACT much lighter than a wheat bran plate, 11 polystyrene plates
are needed to provide the same rigidness and heat insulation
Biotrem tableware products are derived from 100 % bio-based properties as a single wheat bran plate.
feedstock, namely wheat bran. The tableware production plant
is supplied by wheat bran from local mills in the North-Eastern
Polish region of Podlasie.

THE WAY FORWARD

Overall, it took only three years after the company was founded to achieve commercial production, thanks to the
availability of public funds and the company’s in-depth knowledge of the feedstock supplying industry as well as the
preceding R&D that it built on. Continuing with this trend of rapid development, the outlook for Biotrem tableware is
positive, both in terms of sales volumes and profitability. However, the product is challenged by its marked difference
compared to traditional disposable tableware, and by its higher price. The company is taking efforts to overcome these
challenges: improving the production process and promoting active customer engagement. Trends that present oppor-
tunities for Biotrem’s growth include consumer and business sustainability commitments and policy initiatives to es-
tablish a circular, low-waste economy. These are likely to continue to be key drivers influencing future sales of Biotrem.
Optimisation of the production process and investment in additional production facilities are expected to provide
the necessary economies of scale and narrow the price differential compared to traditional products. Nevertherless,
price competitiveness with paper or plastic is not expected within the short-to-medium term. However, economies
of scale will improve its standing among competing bio-based products. On the demand side, rising environmental
consciousness among consumers and businesses is increasingly spurring Biotrem’s customer base such as event
organisers and caterers to choose sustainable tableware. The company is likely to reach the maximum annual pro-
duction capacity of the current facility in the next two years.
The company is currently investigating into alternative types of feedstocks, e.g. algae, cassava or other agri-food
industry by-products. The feedstock choice will depend on the availability at the market where investments in new
production facilities will be realised (e.g. cassava by-products in South America). At the same time, feedstock flexi-
bility will allow addressing consumer trends towards gluten-free products.

This factsheet has been compiled from information collected in April 2018
38
Curran® A sustainable alternative for
by water-based formulations and
CelluComp Ltd
composites

PRODUCT NAME
Curran®
PRODUCT DESCRIPTION
Microfibrilated Cellulose
FEEDSTOCK
Beet pulp (by-product of sugar processing)
ORGANISATION
CelluComp Ltd.
EMPLOYEES
17 employees (2018)
COUNTRY
The United Kingdom (Scotland)

R&D START PRODUCT

2005
Curran® is a microfibrilated cellulose material (sometimes referred to as nanocellulose)
MARKET ENTRY DATE
produced from sugar beet pulp derived from waste streams of the food processing industry.
2014
Curran® fibres have both mechanical and rheological14 properties and have numerous
PRODUCTION CAPACITY
applications as additive to for example paints and coatings, concrete, cosmetics, drilling
Small-scale plant (current):
400–500 tonnes/year (EU) fluids, home care products, food. Curran® fibres’ high-performance allows the production of
Future commercial plant (2021): composites with performance characteristics comparable to those based on conventional
10.000 tonnes/year (EU) fibre technology. Curran® is 100 % bio-based, and is commercialised in two forms: as a
PRODUCTION VOLUME paste/slurry or as a powder.
Varies depending on commercial demand
SALES (GLOBAL) SUCCESS
Expected to increase after completion of CelluComp has developed a price-competitive green alternative to carbon composites.
the commercial plant The product entered the EU market in 2014, approximately 9 years after initial research.
INVESTMENT The company has so far successfully managed to overcome the innovation ‘valley of
EUR 22.6 million CAPEX for commercial death’ and bridge the gap from research to the market, by securing consecutive rounds
scale plant plus working capital
of private capital investments from business angels and venture capital, as well as na-
PRICE tional public funding. CelluComp also benefited from EU funding under the Entrepreneur-
Currently sold in units of 15 kg,
3–4 EUR/kg ship and Innovation Programme and under FP7. Currently, the Curran® plant in Scotland
(UK) is the first plant of its kind in Europe and the company is expected to turn profitable
EARNINGS
Break-even expected once the commercial once the commercial size plant will be built (expected in 2021).
plant is built and operating to scale
PROSPECTS
The prospects for Curran® are positive. The commercial potential of the product is high as
CHARACTERISTICS
a result of its properties, as well as the price difference compared to competing incumbent
• 100 % bio-based
• Low carbon footprint due to efficient alternatives. The selling price of Curran® compared to competing alternatives would be
process within a ratio between 0.5 and 1 once the commercial scale plant is functional, meaning a
• Non-toxic lower price for Curran®. Given the various applications of Curran®, the product has strong
• Low dust
• Zero volatile organic compounds (VOC) potential for expansion and growth on new market segments, other than the paints and
• Patent protected coatings additives market segment, as well as in other geographical markets (e.g. North
America, Asia). In driving the expansion to new markets, CelluComp is focussing on signing
new agreements with large companies that produce cosmetics, food, composite materials
and paper with a strong position in their respective sectors of activity.

14
Rheological properties: related to the flow of the material. 39
 HISTORY Drivers of success
»» CelluComp’s capacity to effectively mobilise internal and
CelluComp was founded in 2004 with the aim of producing external funding gradually and to utilise the financial support
green alternatives to carbon composites, initially target- for R&D and commercialisation
»» High commercial potential owing to the properties of the
ing the sports goods market. Today, the company focusses
material
on producing a bio-based additive - Curran® - that can be »» Price competitiveness in comparison to traditional competing
used as an economically viable solution to rheology and materials and other bio-based products
reinforcement in many different industries, such as paints, »» Sustainable and price-competitive feedstock and feedstock
flexibility
coatings, concrete, personal care products and food. »» Low capital investments required at the outset compared
to other bio-based products (estimated around EUR 22.6
Curran® was developed in 2005 by two material scientists (Dr. million)
Hepworth and Dr. Whale), founders of CelluComp, and was first »» Capacity and engagement of the CelluComp team and
investors
introduced through two composite products: (a) a fishing rod
(The Reactor™), which blended the unique properties of Curran®
and carbon fibre and won the ‘best rod in show’ award in Las
Vegas, and (b) a high end skateboard, which used Curran® in Currently, CelluComp has a total of 17 employees. Curran®
sheet form. CelluComp sold the fishing rod business in 2008, is produced at the CelluComp demonstration plant in the
due to the financial crisis, and developed a new business United Kingdom (Glenrothes, Scotland), which has a maxi-
strategy focussed primarily on the development of Curran®. mum production capacity between 400–500 tonnes/year.
The business strategy was further developed in subsequent This is the first plant of its kind in Europe. As of 2017, the
years by the new CEO who concentrated on strategic business product was being sold at a loss due to the small scale of
development through the set-up of partnerships and focus the production and associated high unit costs. The company
on scaling-up production and sales. plans to build a commercial size factory which will enable
CelluComp to produce 10,000 tonnes/year of Curran® and,
The development and commercialisation of Curran® was as a result of economies of scale, also increase its profit.
financed primarily from the internal resources of the founders
of CelluComp as well as through several rounds of private The company successfully overcame initial risks and barri-
investor’s funds, in particular angel investors. The efforts of ers, including risks related to the novelty of the technology,
the founders of CelluComp, as well as the CEO, in attracting competitive barriers to the market, the initial choice of
private financing have been instrumental in the develop- composite materials as target market, high investment
ment of the product. CelluComp has also benefitted from requirements and (so far) low profitability. The company
substantial public sector funding (EU and national). Overall, is expected to turn profitable once the commercial size
as of 2005, CelluComp raised in excess of EUR 9 million to factory is constructed and in operation (expected in 2021).
finance its activities.

SWOT ANALYSIS FOR CURRAN®

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Ability to attract private Target markets are Market preferences High regulatory costs for
financing for R&D and conservative and adoption – mainstreaming of testing and licensing
commercialisation is long and time- sustainability demands
consuming (SDG) Investors demand a
CelluComp CEO capability track record and solid
and engagement and Challenges in scaling EU funding opportunities in projections
ability to attract private up due to high initial order to raise finance
finance investments The bio-based feature may
In line with circular not be sufficient to justify
Patents Piloting and testing a economy developments the ‚high price‘ but once
novel product is time- scaled up the costs will be
High market potential and consuming and costly reduced
strong potential in multiple
industries Steady supply of seasonal Potential other competitors
feedstock required, which will emerge
Access to and flexibility of may increase storage costs
low-cost feedstock
40
A sustainable alternative for water-based
formulations and composites

FUNDING
CURRAN® MARKET POTENTIAL
The R&D and commercialisation of Curran® was financed Coatings 9 %
Other 6 %
primarily by leveraging private capital, mostly from angel
investors and venture capital, as well as by securing public Drilling Fluids 13 %
grants from national investors. Personal Care
6%

Through a targeted business strategy that included focus Food

on piloting and prospecting new markets, CelluComp ad- 9%
dressed the risks in a way that raised investor’s confidence.
CelluComp’s CEO business strategy to attract new investors
was also instrumental to the company’s success in securing Composites
Paper 28 % 13 %
financing. As such, CelluComp managed to secure multiple
rounds of financing (once every two years) including from
the Scottish Seed Fund (2006), Discovery Investment Fund,
Concrete 16 %
Abundant Venture Partners, Claridge (2012, EUR 1.1 million),
Soffinova Partners – Green Seed Fund (2013, EUR 2.7 million), Source: Estimates CelluComp
FPCI CapAgro Innovation (2016, EUR 4.1 million).

Apart from this, CelluComp received substantial public nation- According to estimates provided by CelluComp, the future
al and EU funding in particular from the Scottish Enterprise potential market for Curran® worldwide is high. It is esti-
Group that promotes start-ups active in Scotland. CelluComp mated to amount to EUR 32 billion, covering the markets
also benefitted from an EU grant, of EUR 1 million starting for paints and coatings, paper, food, cosmetics, home care,
in 2013 and covering a period of 3 years. The grant was composite materials.
financed under the EU’s Entrepreneurship and Innovation
Programme and supported both the manufacturing and the REGULATORY ASPECTS
commercialisation of the Curran® product. Further, CelluComp
secured EU funding under FP7. The grant was used for a The evolution of European and national regulatory framework
project (NanoCelluComp) that focussed on the development indirectly supports the development and commercialisation
of a technology to utilise the high mechanical performance of Curran® as a result of more rigorous requirements for pro-
of cellulose nanofibers, which relied on the technological ducts concerning sustainability and health protection. Curran®
know-how from the production of Curran®. The value of all is mainly affected by the general regulatory framework on
received public sector grants amounts to approximately EUR health and safety aspects and there are no sector-specific
2 million. CelluComp secured only limited bank financing regulations that have an impact on the product development
due to bank risk aversion. (e.g. the product is not noxious for health or the environment).

MARKET INFORMATION TECHNOLOGY INFORMATION

In recent years, the production of Curran® amounted to a Curran® is currently produced from renewable feedstock,
good percentage of the annual production of nanocellulose sugar beet pulp and carrot fibres. The feedstock used for
fibres. Although Curran® has virtually no existing share of the Curran® originates from different locations in Europe. For
large total additive market for coatings (both fossil fuel and the production of 1 kg of Curran®, approximately 1 kg of dry
bio-based), its potential is significant. Estimates indicate that sugar beet pulp is required. Other possible feedstocks for
the production of Curran® on a commercial scale would be the product in the future include starch (from potato waste).
price-competitive against other producers of micro-fibrillated
cellulose. The selling price of Curran® compared to compet- Curran® is produced through green chemistry processes
ing alternatives would be within a ratio between 0.5 and 1 including water-based reactions at low temperatures and
once commercial scale plant is functional, meaning a lower pressures, which maximise the energy efficiency of the man-
or similar price for Curran® compared to current competing ufacturing process.
alternatives. Curran® can be used for various applications as
a result of its mechanical and rheological properties, which The primary state of Curran® is in granules form with ap-
means that it has access to a wide range of relevant product proximately 20 % solid matter and 80 % water. Dilution
markets. Currently, the main market targeted by Curran® is to approximately 2 % solid matter generated a pumpable
the paint and coating additives market. This is estimated Curran® slurry. The granules and the slurry can be readily
to amount to EUR 2.2 billion globally. mixed into water based coating formulations, resins, cosmetics

41
 and other aqueous liquids. The granules are used in paints biological resource, increasing its economic value by an esti-
and coatings as they are convenient to transport, store and mated factor of 50. The production of Curran® involves the
disperse into aqueous systems using conventional industry extraction of nano-fibres and leaves behind the carbohydrates
mixing equipment. and proteins. As such, the residues from the extraction of
Curran® can be further used in the production of high-value
The Technological Readiness Level (TRL) is 8–9 (i.e. 8 – materials, such as energy or as animal feed.
system completed and qualified, 9 – actual system proven
in operational environment). Curran® is protected by 10 Energy efficient and green chemistry production process:
patents covering theproduct, the process and some of the The production process of Curran® has a low carbon footprint
applications. Some of the patents held by CelluComp for as it involves water-based reactions at low temperatures
Curran® are co-owned. The company also has one license and pressures. As a result, the production of Curran® has
agreement in place. lower unit energy consumption than other paint thickeners
which reduces its environmental impact. Additionally, when
substituting other cellulose ethers, Curran® has environmental
ENVIRONMENTAL IMPACT
advantages as it uses up to 5 less chemicals during man-
Feedstock sustainability: Curran® is produced 100 % from ufacturing compared to cellulose ethers and has improved
renewable feedstock. Currently, the main feedstock is sugar performance characteristics.
beet pulp from waste streams, a by-product of sugar process-
ing commonly used for animal feeds. The business model to In addition, Curran® is non-toxic and has no emissions of VOC.
produce Curran® extracts value from a relatively under-used

THE WAY FORWARD

The overall outlook for Curran® is positive. Given the multiple applications of Curran®, the product has good po-
tential for expansion and growth on new market segments, other than the paints and coatings additives market
segment, as well as in other geographical markets (e.g. North America, Asia). In driving expansion to new markets,
CelluComp focusses on signing new agreements with large companies that produce cosmetics, food, composite
materials and paper and which hold a strong position in their respective areas of activity. Moreover, CelluComp
sees customer outreach as a key strategic goal underpinning future growth. As such, the focus is set on building
a customer pipeline in applications beyond the present ones. Given the high costs (time and financial resources)
associated with the development and testing of new applications, CelluComp’s focus is on enabling customers to
move swiftly from the product testing phase to the commercial phase.

In terms of financial outlook, CelluComp is challenged in increasing the profitability of Curran® due to difficulties
in scaling up production. In the medium term, the main barrier for CelluComp is addressing the issue related to
production capacity, and in this respect, securing a new round of funding for the construction of a commercial size
plant that will enable CelluComp to produce larger volumes of the product and deliver lower unit costs through
economies of scale. Although the market prospects are generally assessed to be positive due to the wide range of
applications of the product, there are certain market risks associated with the up-scaling and commercialisation
of the product. They relate to uncertainty in relation to the future demand and the level of competition from other
cellulose nano-fibre materials, for example from wood and cotton.

This factsheet has been compiled from information collected in January 2018.

42
All Purpose Cleaner
by
A bio-based all-purpose
Ecover cleaning product

PRODUCT NAME
Ecover All Purpose Cleaner (APC)
PRODUCT DESCRIPTION
Hard-surface household cleaning product
FEEDSTOCK
All ingredients derived from plant-based
sugars and oils; Eco-surfactant ingredient
fermented from glucose and rapeseed oil
ORGANISATION
Ecover
EMPLOYEES
250 employees (globally)
COUNTRY
Belgium

R&D START
2001 PRODUCT
MARKET ENTRY DATE Ecover’s All Purpose Cleaner (APC) is a 99.4 % bio-based, hard surface cleaning product.
2009 It is suitable for cleaning hard surfaces, such as floors, countertops, tiles, and similar. Core
PRODUCTION CAPACITY clients are household consumers and to a lesser extent professional cleaning companies.
Not disclosed
SUCCESS
PRODUCTION VOLUME
Not disclosed Ecover’s APC has been commercially available on the market since 2009. Ecover has
been among first-movers to offer an ecological, bio-based cleaning product with cleaning
SALES (GLOBAL)
Estimated around EUR 200 million performance on par with that of conventional cleaning products. This was possible largely
thanks to successful R&D for the development of the product’s key innovative ingredient:
INVESTMENT
EUR 2 million for R&D the ‘eco-surfactant’. This is a surfactant derived solely from renewable raw materials.
R&D was carried out in cooperation with Ghent University, and relied largely on EU (FP7)
PRICE
10–20 % higher than conventional and national public funding. The establishment of APC’s commercial production was fund-
products, depending on geographical ed through the company’s internal finances. Today, Ecover’s APC can be commonly found
location in supermarkets across Western Europe and has seen growing sales over the years, reach-
EARNINGS ing up to 5 % of the total market (fossil- and bio-based) in key European markets in 2017.
Product line has been generating 25 to As a product line, it has been generating 25 to 40 % profits since 2015.
40 % profits since 2015
PROSPECTS
CHARACTERISTICS Since its market entry in 2009, the product has experienced an increase in sales of up
• 99 % bio-based to 15 % per year. This indicates the product responds well to market drivers such as
• Biodegradable environmental and health impacts and cleaning performance. The company thus expects
• Includes patent-protected eco-surfac-
tant ingredient its APC market share to continue to grow and its sales to expand beyond green consum-
• pH-neutral (skin friendly) ers. Branding and awareness actions to improve consumers’ “perceived” performance of
bio-based cleaning products are also starting to pay off in the same direction. Planned
supply-side changes include the switch to feedstocks from waste streams, a topic Ecover
is currently researching. Prospects for the APC product are positive, with the recent ac-
quisition of Ecover by a large market player, internationally and in the European market.
Ecover now has the opportunity to tap into additional resources that will allow it to reach
new markets.

43
 HISTORY Drivers of success
»» Recognition of the need to improve product performance to
Ecover was founded in 1979. During its first 20 years, the reach a larger market and management willingness to invest
company’s strategy focused on providing alternatives to con- »» The ability to convince the company’s management to
ventional cleaning and washing products, such as products pursue the R&D to prove the practical feasibility of the
free from certain environmentally harmful ingredients (e.g. eco-surfactant theoretical concept
»» Establishing a partnership with the University of Ghent for
phosphate). Their products, including the all purpose cleaner the development of the eco-surfactant
(APC) product, were orginally targeted towards niche green »» The availability of public EU and local funding for R&D
consumers. However, the company ran into financial difficulties »» Advice from Ecover’s owner (Skagen) and external experts
on IP valorisation, and subsequent licensing agreement with
in the early 1990s, and realised that the cleaning performance
a supplier that took on the large-scale production of the
of their products needed to be at least on par with that of eco-surfactant
fossil fuel-based products. This was seen as necessary in »» Branding and awareness actions to improve consumers
order to expand beyond the niche customer segment they “perceived” performance of bio-based cleaning products
originally targeted.
proof of concept effort. The R&D phase benefitted from EU
In 1992, private investment company Skagen took over Ecover. FP7 and national public funding. In 2008, Ecover was awared
The company was relaunched with a focus on innovations in a patent for the use of eco-surfactants in cleaning products.
plant-based, renewable ingredients for its products, and eco-
logical production processes. Their strategy was re-orientated Despite this breakthrough, the next phase proved more chal-
to a stronger emphasis on cleaning performance, while still lenging. This phase aimed to scale up the production of the
retaining the focus on green innovation. eco-surfactant ingredient to a commercial level, which would
allow Ecover to produce the APC in volumes sufficient to enter
The development of the Ecover APC product is an exam- the market. Typically, Ecover co-develops ingredients in part-
ple of this strategic shift. The company set out to develop nership with ingredient suppliers. This is seen as a good way
a bio-based key ingredient for its APC product that would of ensuring the basis for the subsequent scale-up. However,
ensure good cleaning performance: an ‘eco-surfactant’. This the path towards the development of the eco-surfactant
is a surfactant derived solely from renewable raw mate- had not involved such a cooperation. Thus, Ecover was faced
rials instead of fossil fuels. The basis for this R&D project with a risk that they would not be able to enter the market
was a theoretical concept found in a 1960’s scientific article. and hence to harvest from investments made in R&D. The
Ecover’s R&D manager succeeded in building support within challenge was overcome by a concerted effort to identify and
the company’s management as well as externally about the reach a licensing agreement with an ingredients’ supplier, who
concept’s practical applicability. The company then partnered could take on the production of the eco-surfactant at a large
up with the University of Ghent and pursued a 7–8 year R&D scale. Ecover entered into discussions with several potential

SWOT ANALYSIS FOR ECOVER ALL PURPOSE CLEANER

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

IP for eco-surfactant and No involvement of Growing consumer interest Influx of competing

EU-Ecolabel ingredients‘ supplier at the in green cleaning products ecological products on the
beginning of the process market
Ability of R&D manager to
build support for pursuing Higher price compared Feedstock sustainability
R&D in the eco-surfactant, to fossil-based cleaning could be questioned in the
resulting in fruitful R&D products future
partnership with Ghent
University
Company owner support
from the outset
New company owner is a
large cleaning products
manufacturer with
substantial resources that
Ecover can capitalise on
44
A bio-based all-purpose cleaning product

suppliers. In parallel, the company sought advice from their market share in 2013 while there were also more than 100
owner at the time, Skagen, and from external experts on how other players with less than 1 % of the market. SC Johnson,
to commercialise and license the generated eco-surfactant the new owner of Ecover, ranked 6th with a market share of
intellectual property. This process helped in eventually reach- 7.2 %. The total retail value of APCs in seven EU countries
ing an agreement with their current eco-surfactant supplier, (France, UK, Italy, Germany, Netherlands, Denmark and Poland)
specialty chemicals company Evonik. was EUR 1.954 million in 2013. The total retail value of all
hard surface care cleaning products in the EU was estimated
The eco-surfactant together with other plant-based ingre- at EUR 4.232 million in 2013.15
dients are combined in the company’s ecological production
facility in Malle, Belgium to produce Ecover’s APC product. Since 2013, there has been an upward trend, and the company
Today, the product can be commonly found in supermarkets currently estimates the Ecover APC sales to represent about
across Europe and has seen its market share increasing at 1 % of the European market, a tenfold increase compared
a rate of up to x1.15 per year in key markets. The segment to 2013 estimates. For key European markets (UK, Belgium)
of bio-based green cleaning products has attracted financial Ecover estimates its market share to be close to 5 %. In the
interest, and Ecover was acquired at the end of 2017 by pri- future, it expects its market share to continue to grow, reaching
vately held SC Johnson, a global manufacturer of household by 2022 an estimated 5 % in Europe, and 10 % in key markets.
cleaning products.
ECOVER TOTAL APC MARKET SHARE IN EUROPE,
FUNDING 2013–2022

The investment for setting up the commercial production line 10 %

2022 5%
for the APC was funded through Ecover’s internal finances.
The R&D phase was funded through a combination of inter- 5%
2017
1%
nal financing and external financing through EU and local key markets (Belgium, UK) EU
2013 0.1 %
funding (grants).
0% 2% 4% 6% 8% 10 %

Ecover together with partners has received national and Eu- Source: Based on company estimates and JRC (2014)
ropean support for various research projects on the topic. Note: No available estimate for key markets in 2013

These funds allowed deepening of knowledge and expertise

on the new eco-surfactant and its applications. Ecover has
received an estimated EUR 1 million in grants for the APC REGULATORY ASPECTS
product specifically, of which the large majority were in EU
Ecover APC is a consumer product. Thus, initiatives and reg-
support from the EU FP7 research and innovation programme.
ulations pertaining to labelling have an impact on sales. The
Ecover APC product has been awarded the EU Ecolabel. This
MARKET INFORMATION helps European consumers distinguish it as an environmentally
friendly product when making purchase decisions. On the other
Ecover is positioned as an environmental brand. Their products,
hand, the company considers the Regulation on the classifi-
including the APC product, are marketed to green consumers.
cation, labelling and packaging of chemical substances and
The company is undergoing what they consider a successful
mixtures (CE 1272/2008) to constitute a challenge: the symbols
shift from the niche green consumer segment to mainstream
that should be used on labels according to this Regulation
green consumers. The core markets for Ecover’s APC are in
leave an immediate impression with consumers of a product
the (western) EU, and the US, while there is also a small
that one should be cautious about, and consumers may pay
market share in Asia.
little attention to the actual meaning of the different labels.
The APC product is sold directly to end consumers, either online
or via supermarkets. Its price is about 10–20 % higher than TECHNOLOGY INFORMATION
conventional products. This price premium stems from more
Ecover’s APC product has been produced commercially
expensive, bio-based bulk ingredients that are currently not
since 2009. The Technology Readiness Level (TRL) is thus
produced at a large scale and are therefore more costly when
TRL 9 (actual system proven in operational environment).
compared to traditional fossil-based ingredients.
The APC core innovative ingredient is a yeast-based eco-sur-
In 2013, Ecover’s APC was estimated to have a modest share
factant, developed in a cooperation between Ecover and
of the total (fossil- and bio-based) market of 0.1 % in Europe.
Ghent University. They invented an innovative new process
However, it was recognised to be amongst the most prominent
using a special ‘bioreactor’, which provides the breeding
‘green cleaning’ brand. The European hard surface cleaning
ground for yeast cells. This in turn provides for harnessing
market was heavily dominated by a few well-known and
the yeast’s unique ability to combine water-soluble sug-
globally recognised manufacturers: the top six organisations in
ars and non water-soluble oils to produce what Ecover
the European market for surface care had about 59 % of the
has termed an ‘eco-surfactant’. The collaboration proved
15
45
JRC (2014), Revision of European Ecolabel Criteria for All-Purpose Cleaners and Sanitary Cleaners.
 successful and Ecover and Ghent University were jointly in relation to competition with food supply. The company is
awarded a patent for the use of eco-surfactants in clean- already carrying out R&D in this direction: for example, under
ing and washing products. The eco-surfactant together an ongoing project they are exploring the use of waste alcohol
with other plant-based ingredients are combined in the produced as a by-product of zero-alcohol beer production.
company’s production facility in Malle, Belgium to produce
Ecover’s APC product. The company is paying particular attention to packaging,
which accounts for a significant part of the product’s total
ENVIRONMENTAL IMPACT footprint. The currently used APC bottles are a mix of 75 %
bio-based plastic and 25 % postconsumer recycled plastic.
The eco-surfactant production process is a low-energy bio- By purchasing and using recycled plastic, Ecover provides
chemical process based on natural fermentation. Conventional demand for recycled materials that helps drive the recycling
methods for the production of surfactants – be it bio- or economy. Ecover is also looking at fibre-based structures for
fossil-based – typically require a chemical process involving packaging such as grass, potato peel or paper.
high pressures and temperatures. In contrast, Ecover’s process
operates at a low temperature of 30 °C and only requires Supply chain decisions such as the sourcing of ingredients
ambient atmospheric pressure, thereby saving significant and packaging are guided by a company internal tool that
amounts of energy. The eco-surfactant allows for a cleaning measures the environmental and health impacts of products.
performance of the bio-based APC on par with that of pet- Based on this tool, Ecover has set itself minimum standards,
rochemical-based products, and at the same time allows for for example that all surfactants be biodegradable and that
the complete biodegradability and low toxicity of the product. all products be at least 80 % bio-based.

In addition, Ecover’s bio-based products use Northern-Eu- Besides producing an ecological product, Ecover operates
ropean-sourced feedstocks. The eco-surfactant – the APC from sustainable manufacturing facilities located in Belgium,
key ingredient – uses local rapeseed oil as feedstock, hav- France and since 2015 in the US (Chicago). Finally, Ecover’s
ing switched away from the palm oil previously used. In the APC has been awarded the EU-Ecolabel, recognising that it
medium- to long-term, the aim is to switch to feedstocks is in the top 10–20 % of products on the EU market in terms
from waste streams to address possible future concerns of its environmental performance.

THE WAY FORWARD

The Ecover APC product responds well to key market drivers that beyond price include cleaning performance, health
considerations and environmental sustainability. Moreover the price differential compared to conventional cleaning
products, which currently results from the use of more expensive bulk ingredients, is expected to get narrower as
some ingredient suppliers scale up production of bio-based ingredients with low ecotoxicity.

While the actual performance of Ecover’s APC is on par with that of conventional products, consumers often judge
performance based on “perceived” performance (e.g. this is where characteristics such as fragrance come into
play). Ecover will continue carrying out branding and awareness efforts to inform consumers about the value,
performance and quality aspects of bio-based cleaning products thereby improving their “perceived” performance.
Through such efforts and through tapping additional resources of its new owner, Ecover’s expects to reach new mar-
kets and expand sales beyond green consumers. The company expects its APC market share to continue to grow,
reaching by 2022 an estimated 10 % in key markets (UK, Belgium), and an estimated 5 % in the EU.

On the supply side, planned changes in the medium term include a switch to waste biomass feedstocks, the use of
which Ecover has started to investigate through dedicated research projects. The company anticipates that the use
of a particular such ingredient to be technically proven in 2020, and that it could make the complete transition in a
further 8 years thereafter, by when waste-biomass feedstock supply can be expected to become more established
and commercially viable.

The company employs a culture of continuous innovation and for the longer-term development of its cleaning
products they are paying increased attention at the concept of biomimicry. This could mean a transition to probiotic
cleaners encompassing living micro-organisms as the active ingredient, which are active in the presence of dirt but
benign otherwise.

This factsheet has been compiled from information collected in April 2018.
46
Lumir® Spray
by Acoustics isolation in spray
Lumir Oy

PRODUCT NAME
Lumir® Spray
PRODUCT DESCRIPTION
Sound proofing spray for interior walls
FEEDSTOCK
Wood pulp from FSC-certified forests in
Finland
ORGANISATION
Lumir Oy
EMPLOYEES
14
COUNTRY
Finland

R&D START
2009
PRODUCT
MARKET ENTRY DATE
2013 for its first cotton-based coating. Lumir® Spray is an indoor sound absorption solution. It improves indoor acoustics through
Gradual transition to wood fibres as a reduced reverberation. The product is a 100 % bio-based wood-fibre coating that is pro-
feedstock between 2015 and 2017 duced from wood pulp. It further serves as an alternative to glass-wool based indoor sound
PRODUCTION CAPACITY absorption. Lumir® Spray contains colour pigments. It therefore eliminates the need for
600 m² of Lumir® Spray per day; potentially fossil-based acrylic paints and the production of plastic packaging waste. It can
Investment into material for larger
capacity on-going be applied directly to any surface that is not sensitive to water with minimal preparative
work. This saves the use of other building material required for indoor walls and ceilings,
PRODUCTION VOLUME
100 m² of Lumir® Spray per day per site. such as fillings, wall plaster or the like.
Total capacity is utilised by 17 %
SUCCESS
SALES (GLOBAL)
EUR 1.1 million
Lumir has succeeded in introducing its product on the market. As of 2018, it has been
applied in more than 100 construction projects. Accordingly, Lumir demonstrates a growing
INVESTMENT
Not disclosed turnover. The product is produced on a commercial scale, utilising Lumir’s current production
capacity by 17 %. Lumir is not yet profitable, but anticipates to break even during 2018. The
PRICE
Ca. EUR 60 per m² company succeeded in securing private financing early in its foundation phase. Lumir has
further managed to secure national funding to shift its feedstock away from cotton fibres.
EARNINGS
EUR -864,000
PROSPECTS
Lumir is engaged in developing the next feedstock generation, of which waste fibres from
CHARACTERISTICS the paper production are under consideration. Lumir seeks to enter its first market outside
• 100 % bio-based
Finland, and considers Denmark, Sweden and the Netherlands as possible candidates.
• FSC certified feedstock
• Patent protected The company continues to develop the value proposition of its products with new product
• Low VOC emissions variations, moving away from offering only sound alteration solutions towards making
(M1 – RTS Standard) building and construction processes more efficient.
• Highest possible European class for
fire retardant wood products (BS1D0
according to EN 13501-1)

47
 HISTORY Drivers of success
»» Involvement of a dedicated investor already in the compa-
Lumir was founded in 2009 with the aim of providing an al- ny’s founding phase. This secured the financial means and
ternative to glass-wool sound insulation solutions, with which ability of company founders to fully focus on the develop-
Lumir’s founder worked in the past. The aim was to improve ment of the product.
existing solutions’ visual quality, potential health impact and »» Lumir adapted its management competences as need-
ed along the development path by contracting additional
ease of installation. experience in developing a new feedstock and to focus on
establishing Lumir more solidly on the market.
Convinced of the market potential of Lumir, Takoa Invest, a »» The co-development of a product version together with a
well-known player in the construction and sound insulation
venture-capital firm, invested in the company. Accompanying
industry. This contributed positively to consumers’ confidence
this early investment, the investor took an active role in the in the product.
company by filling several positions on the company’s board »» National funding (Tekes) enabled the necessary research to
as well as the initial Managing Director position. This enabled change the feedstock from cotton- to wood fibers.
the founders of Lumir to focus on product development and
utilise their technical and market insights and expertise.
Lumir® Spray is exposed to the risk that it needs to generate
The first versions of Lumir® Spray used cotton as a feedstock. a credible reputation with users as a quality and/or price
This was imported from China and Kazakhstan. Lumir conducted competitive product. Improper installation can involve higher
small-sized trials with this version from 2011 and onwards costs and/or reduced quality. Purchasing the product includes
and entered the market with this version in 2013. Challenges installation by a Lumir team, to remain in full control of
with cotton fibres as feedstock, such as variable fibre quality the quality of the installation. In order to cover the growing
and unsustainability, however led Lumir to change to wood demand, Lumir has also contracted a partner firm for the
fibres as a feedstock in 2015. installation, and is negotiating contracts with additional firms.
As of 2018, Lumir® Spray has been installed in more than
This resulted in the contracting of Lumir’s current product 100 buildings in Finland, including notable public buildings
director in 2015, who brought in experience with cellulose such as the National Library of Finland.
and nanocellulose chemistry, among others from working at
VTT Technical Research Centre of Finland Ltd (VTT). The wood Lumir’s primary customers are in the building and construc-
fibre development took place in collaboration with Lumir’s tion sector, primarily architects. The company operates in
feedstock provider Stora Enso, one of the world’s largest the business-to-business domain. Lumir states that there is
paper and pulp producers. The wood fibre content of Lumir® some reluctance in the building and construction sector to
Spray has increased gradually over time reaching 50 % in apply new products offered by small suppliers on the market.
2016 and 100 % in 2017. Accordingly, it requires sustained effort to convince architects
and construction companies to use Lumir.

SWOT ANALYSIS FOR LUMIR® SPRAY

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Ability to adapt Difficult to demonstrate National support schemes Conservative and

(management level) that the product has a helped to finance the established market
and re-orientate where better environmental change of the feedstock and relations between
necessary performance than glass- suppliers and buyers,
and mineral wool Paper and pulp industry in which is hard to enter for
Flexible feedstock allows search for new business a small company with a
production in wood pulp- models to hedge against novel product
scarce areas declining demand for tradi-
tional paper products Bigger companies could
Strong internal R&D skills try to out-compete the
in wood chemistry Possibility to use paper company
production by-products as
Patent protected feedstock, could help the Sustainability of feedstock
paper industry to be more (wood pulp) may be
‘circular’ questioned in the future
48
Acoustics isolation in spray

A key break-through in this regard was that Lumir managed to part, this is because Lumir gradually developed its product
co-develop a product with a major German building material further (e.g. the mentioned change of the feedstock) while
supplier, Knauf. Lumir sells Lumir® Board, in which the spray already selling the product on the market. Lumir expects
is combined with a sound absorbing gypsum board by Knauf. to break even in 2018.
While this cooperation did not enable Lumir to enter foreign
markets, cooperation with this large player in the market MARKET INFORMATION
contributed positively to the credibility in the market about
Lumir® Spray’s qualities. The company states that the price of a Lumir® Spray acous-
tics installation matches that of competing products, such
In order to promote and focus more on growth, a new Man- as glass and mineral wool panels. While the price of Lumir®
aging Director was recruited in 2017. This brought in expe- Spray is EUR 60 per m², compared to some EUR 15–65 per
rience from the buildings and construction sector. Further, a m² of competing, non-bio-based, products (depending on the
Sales Manager was brought in with previous experience as sound absorption capability),16 Lumir states that the higher
a technical product manager for acoustic ceilings at Knauf. material price is off-set by less installation time and lower
material consumption.
FUNDING
The company’s overall value proposition is that its products
Lumir has been mainly privately financed by the investment make building processes more efficient: necessary building
firm, Takoa Invest. Takoa Invest invested in Lumir when the components like paint are already included in the coating.
company was founded. Next to the large market potential of
the product, Takoa Invest’s motivation was that the founder The bio-based feature is not a driving factor of the prod-
of Lumir had a strong track record with working on different uct demand. Rather it is the product’s quality, durability and
start-ups in the past. Takoa Invest maintains a significant customisability (e.g. in terms of colour) that are determining
share in the company and holds four out of six board seats demand factors. Overall, the company states that product
and retains the board’s chairmanship. Prior to the hiring of quality and price are the main decisive factors in the building
the current Managing Director, Takoa Invest filled this posi- and construction industry.
tion as well.
REGULATORY ASPECTS
Lumir has obtained national funding and a loan from Tekes, a
public Finnish business development fund, for the development Lumir reports that the fire classification of the material ac-
of the wood fibre feedstock, and has further initiated a second cording to the European classification standard (EN 13501-1)
application process for research on wood fibres. Lumir has was a regulatory challenge. A low classification would have
otherwise financed the rest of its research expenses internally. led to limitations on the amount of material allowed to be
used in a construction. This would in effect expose Lumir®
To date, Lumir has not received EU funding. Lumir is currently Spray to the risk of not being competitive to the competing
however preparing an application for Horizon 2020 funding glass- and rock wool based products which generally have
for its first application outside of Finland. the highest fire classification possible (class A1). To ensure a
sufficiently high classification, Lumir was required to add fire
retardants. Although the company had sufficient knowledge
TURNOVER AND PROFITS OF LUMIR ON THE to develop those retardants internally, the development took
COMPANY LEVEL several attempts. Still, the effort resulted in the highest possible
European class for fire retardant wood products (class B). As
2013 2014 2015 2016 2017
a result, Lumir® can be used in any building space, with the
Turnover 145 95 631 752 1,082 exception of fire exits.
(EUR 1,000)

Profit - 757 - 549 - 415 - 571 - 846 TECHNOLOGY INFORMATION

(EUR 1,000)
Lumir emerged from the pilot stage and entered the mar-
ket with its first cotton-based version in 2013. Over time
the product has gradually changed to a 100 % wood fibre
Lumir has a growing turnover (see above), which indicates based version in 2017. With +100 applications and a growing
that the demand for Lumir is growing. Particularly since turnover, Lumir® has achieved Technology Readiness Level
the change in feedstock was initiated in 2015, turnover (TRL) 9 (actual system proven in operational environment).
has increased, though no profits have been generated. In

16
An example is Rockfon®, which provides ready-made rock wool panels that can be installed on walls on ceilings.
49
 Lumir is available with varying features, but the basis of the ENVIRONMENTAL IMPACT
product, Lumir® Spray, consists of wood fibres. While Lumir
does not reveal the exact type of wood fibres, it reports that it The wood pulp for Lumir® Spray originates from domestic
is more novel than the recent developments of nanocellulose and FSC-certified forests in Finland, provided by Stora Enso.
fibres. The technology uses a patented 3D sound absorbing
structure and contains colouring pigments. This effectively The production of wood pulp is generally a material and energy
substitutes the need for paint, which is typically made of intensive industry. The Finnish forest industry has shown strong
acrylic (i.e. plastic). improvements in their environmental impact over the past two
decades, for example in reducing its CO₂ emissions by 60 %
Lumir produces the spray mainly on-site and has a production between 1990 and 2012. Lumir’s feedstock supplier fits in
capacity for 600 m² of Lumir® Spray per day. Currently, the this general development, and has reduced its energy-related
proportion of work required for preparatory work limits however carbon footprint by 24 % between 2013 and 2017. The energy
the actual production volume to 100 m² per day. Overall, the consumption for the production, however, accounts only for
company’s production capacity is utilised by 17 %, and Lumir one tenth of the company’s carbon footprint, whereas nearly
is in the process of expanding its on-site production capacity. two-thirds of the carbon footprint is indirectly along the value
The company works continuously on possibilities to improve chain (e.g. harvest and transport).
the production efficiency and hence production volume.
Lumir® Spray can be applied on the bare cinder rocks of
buildings, which saves the use of material resources, as fillers,
paint, wall plaster, or other elements to walls and ceilings
are no longer required. As Lumir® Spray contains colouring
pigments, fossil-resource consumption in the form of paint
and the production of plastic packaging waste (e.g. paint
containers) is reduced. Lumir’s products can thus eliminate
certain building processes and reduce resource consumption
and waste production.

THE WAY FORWARD

Lumir considers to use waste fibres that result from the paper manufacturing processes for the next feedstock
generation, which would otherwise be incinerated as unusable waste. This next generation will most likely enter
the market by 2019. The company has also tested the use of recycled wood fibres, though these exhibited co-
louring issues of the material.

Lumir was founded with the idea of providing an alternative to glass- and mineral wool panels for the inside
acoustics of buildings. The company states that this underlying vision has evolved into generally improving the
efficiency of construction and building processes. Accordingly, Lumir has developed variations of Lumir® Spray,
such as sterilising hygiene wall coatings (Lumir® Hygiene) and coatings for cooling and warming systems (Lumir®
Coolia and Lumir® Comfort), which enables more customised applications, and therefrom deriving new market
opportunities.

The company continues its efforts to have its first application outside of Finland. The Netherlands are a favour-
able candidate country, due to its proximity to the EU’s largest market (Germany).

Lumir continues research on the acoustic properties of natural fibres. The results shall feed into Lumir’s own
knowledge, and serve to improve the academic and public knowledge on the subject matter.

This factsheet has been compiled from information collected in April 2018.

50
Melodea CNC
technology A process for extracting nano-
by structured cellulose
Melodea Ltd.

PRODUCT NAME
Melodea CNC production technology
PRODUCT DESCRIPTION
A process for producing Cellulose Nano
Crystals (CNC), used to reinforce existing
materials or produce novel materials
FEEDSTOCK
Wood pulp or waste products of the pulp
and paper production process
ORGANISATION
Melodea Ltd. with partners Holmen
and Klabin
EMPLOYEES
15 (Melodea Ltd.)
COUNTRY
Israel (Melodea Ltd.)
Sweden (partner Holmen)
PRODUCT
Melodea Ltd. has developed a production process that can extract Cellulose Nano Crystals
R&D START
2006
(CNC) from wood pulp and side streams of the pulp and paper making process. The busi-
ness model focuses on revenues via the licensing of the technology for CNC production.
MARKET ENTRY DATE
(OF RESULTING CNC PRODUCT) The resulting product – CNC - is nano-structured cellulose that is a 100 % bio-based
2017 material and is non-toxic. It can be used to enhance existing materials and produce novel
PRODUCTION CAPACITY ones. Examples of applications are papermaking additives, coatings, paints, packaging,
100 kg/day building materials, and bio-composites. In addition, the company develops technologies
PRODUCTION VOLUME for CNC downstream product applications, with a strategic focus on additives for paints
Swedish facility to reach full capacity and high-end coatings.
utilisation (100 kg/day) by end 2018
SALES (GLOBAL)
SUCCESS
Significant revenues foreseen in the Melodea has secured significant levels of investment from private sources at critical
coming two years development stages, adding to received EU funding for research and innovation. Since 2012,
INVESTMENT a Swedish-based strategic partner from the pulp and paper industry has provided part of
Above EUR 3 million the funds for technology development. In 2017, it provided financing for the commissioning
PRICE (OF RESULTING CNC PRODUCT) of an industrial proof of concept CNC production facility that employs Melodea’s technol-
Estimated future price < EUR 20/kg CNC, ogy. It is the first CNC production facility of its kind in Europe, from which significant
depending on quality, quantities and
applications
Melodea CNC quantities will become available on the market. The company successfully
attracted additional private funds from a second pulp and paper producer in early 2018.
EARNINGS
Expected to be positive by 2020
PROSPECTS
The outlook for Melodea’s CNC technology is positive. With backing from two leading
CHARACTERISTICS pulp and paper producers, the company expects to rapidly diffuse the technology in this
• 100 % bio-based resulting CNC product industry and be profitable by 2020. The CNC extraction process can be deployed on-site
• Biodegradable, natural, non-toxic
resulting CNC product pulp mills, where the feedstock, needed infrastructure, and utilities are already in place.
• Patent protected production technology The resulting product, CNC, can be used in the paper making process itself or procured to
and applications other industries, opening up new business opportunities for the pulp and paper industry
that enable it to adapt to changing market conditions. What is more, the CNC technology
can use any cellulose-containing feedstock including agricultural and food industry waste
streams, making it in the future a potentially attractive investment for such industries.
51
 HISTORY Drivers of success
»» In-depth understanding of the pulp and paper industry that
Israel-based Melodea Ltd. was founded in 2010 with the idea has direct access to large volumes of feedstock; offering of
of introducing a commercially viable production method of an attractive value proposition entailing additional business
CNC, which was previously invented at the Hebrew Universi- opportunities for this industry with minimal investment
ty of Jerusalem. Melodea’s founders obtained the exclusive requirements
»» Active involvement in the development of downstream CNC
rights for the production method and continued to develop product applications to drive CNC material demand. Ability
and optimise the CNC production process to make it viable to adapt strategies and focus first on applications with niche
for industrial scale production. Understanding CNC’s market characteristics.
»» A robust business plan on how to transform the CNC produc-
potential, Swedish-based pulp and paper producer Holmen AB
tion process from laboratory to industrial scale in an eco-
became a partner in Melodea in 2012, with almost a 40 % stake. nomically viable way, supported by external market experts
»» Availability of public research funds and capacity to success-
This strategic partnership with Holmen has been a key fully attract these; capitalising on networking opportunities
created by publicly funded projects
milestone in attracting private finance. Before reaching the »» Strategic investment partnership with a large player in the
agreement with Holmen, Melodea approached several potential pulp and paper industry with market importance, providing
financial, strategic and private investors. The proposition con- Melodea with funds and credibility on the market
cerned an investment in a new material which would require a
long time horizon to mature and generate positive returns on produced with Melodea technology to enter the European
the investment. With this long time horizon, positive interest market. Albeit being the size of a pilot facility, it is Europe’s
was demonstrated only by few investors. Public research first CNC production plant, putting Europe on the map together
funds have also played a key role, especially in the first years with North America as the world’s hubs of CNC manufacturing.
of the company. These continue to do so today, albeit to a
lower extent, as private financing financing (e.g. from Holmen In order to drive demand for CNC as an input material, Melodea
and Klabin) has been entering the scene in terms of both also engages in the development of CNC downstream product
ownership interest in Melodea, and investment for setting applications. A strategic focus was put in the first years on the
up a CNC pilot production plant. development of CNC-based foams. The foam industry proved
however to be highly cost-driven. This exposed Melodea to the
Melodea commissioned a pilot production facility in Sweden risk of depleting financial funds for an application in which CNC
with its investing partner Holmen in 2017. This enabled CNC would not be sufficiently price competitive. Melodea was quick

SWOT ANALYSIS FOR MELODEA CNC

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

A process designed to Environmental Funding and networking Competition from larger

utilise existing streams performance of the opportunities from EU CNC players or from low
of paper production to production process is not research programmes and grade cheap nanocellulose
minimise adoption costs certified national support schemes
Conservative and
Two strategic partnerships As production is licenced Paper and pulp industry in established market
in the paper industry out, the environmental search for new business and relations between
performance depends on models to hedge against suppliers and buyers
Involvement in the the individual producer declining demand for
development of specific (e.g. their sustainable traditional paper products Sustainability of feedstock
applications sourcing policies) (wood pulp) may be
Possibility to use paper questioned in the future
Feedstock flexibility allows production by-products
valorisation of waste or recycled paper as Concern/unfamiliarity
streams feedstock, could help the with the term „nano“
paper industry to be more and ambiguous
Ability to adapt social acceptance of
(management level) and ‚circular‘
nanotechnology
freedom of action, re-
orientate where necessary
Strong R&D skills incl.
of board members and
management
52
A process for extracting nano-structured cellulose

to realise the short-term limitations of this application and Based on a 2014 assessment,18 the three highest potenial
mitigated accordingly. This resulted in 2015 in a change of the applications for nanocellulose in terms of volume is paper
strategic focus towards CNC-based additives for paints and and paperboard (20,000 thousand tonnes), manufactured
high-end coatings, an application for which CNC has report- textiles (1,126 thousand tonnes), and paints and coatings
edly favourable properties and niche market characteristics. (800 thousand tonnes). The latter is Melodea’s strategic focus
in terms of CNC application development.
FUNDING
The immediate potential for the deployment of Melodea’s
The development and commercialisation of Melodea’s CNC CNC extraction process lies with the paper industry. The CNC
production technology and the development of applications produced on site a paper mill can be used in the paper making
has been financed by a combination of private investments process itself (e.g. to improve mechanical or surface prop-
and public grants. erties of paper sheet) and in the production of downstream
paper-based products (CNC can be used as a barrier material
A key milestone has been the investment of Swedish pa- to make paperboard impermeable without using plastic film
per producer Holmen in Melodea. Holmen initially provided or aluminium foil), or procured to other industries such as the
about EUR 1 million in 2012, as well as additional funds in paints and coatings industry (see figure below).
the years thereafter upon the achievement by Melodea of
agreed technical milestones.17 This paved the way towards an
increasing importance of private funds. In addition, Holmen PRODUCTION AND USE OF CNC DURING PAPER
has financed together with other funders the commissioning MAKING PROCESS OR ITS PROCUREMENT TO
of the above-mentioned CNC pilot production facility. OTHER INDUSTRIES
Paper mill
Recycling
A second financing round was succesfully completed in early Raw material
Melodea CN
2018, with Klabin – one of Brazil’s biggest paper producers production
C

– providing an investment of about EUR 2 million for a 12.5 % technology Procurement of CNC
to other industries
ownership share in Melodea. Application
Paper
production Paints and coatings
CNC
Before Holmen’s involvement, the company has relied on EU Composites
research and innovation funding programmes, in particu- Paper surface Etc.
treatment
lar FP7 thematic calls on nanotechnology (FP7-NMP) and
biotechnology (FP7-KBBE) that have been accessible for Is-
raeli applicants, as well as grants from Israeli agencies. EU
programmes have been a vital support in the development Melodea’s business model focuses on revenues via the licensing
of the CNC technology. The company continues to pursue of the manufacturing technology, targeting in particular its
grants today. Through already agreed grants from the EU deployment by the pulp and paper industry which has direct
(e.g. M-Era-Net and Horizon 2020 thematic calls) and Israeli access to large volumes of feedstock and established pulp
programmes, the company expects public funding of about mill infrastructures. This entails low technology adoption costs
EUR 2 million until 2020. for paper producers, with the resulting CNC production costs
estimated at only half as high as when setting up a produc-
MARKET INFORMATION tion facility outside a mill. Melodea has already successfully
licenced its technology for the CNC production plant in Sweden
The CNC pilot plant in Sweden that employs Melodea’s tech-
that paper producer Holmen has invested in. The recent ac-
nology has the third highest CNC production capacity in
quisition of part of the shares in the company by a Brazilian
the world, and the highest capacity in Europe (100 kg/
paper producer could signify a possible upcoming investment
day). Based on public literature, CNC of a comparable high
in a facility with Melodea’s CNC technology in South America.
grade by the current market leader CelluForce is positioned
at about EUR 20/kg. Melodea expects its own technology to
result in comparable or lower CNC cost, assuming it would REGULATORY ASPECTS
be produced in a facility with an economically optimal output
CNC is covered by the provisions of general EU chemical
of 3 tonnes per day.
legislation (REACH or CLP).
Market research studies have estimated the total CNC market
There are currently no explicit requirements for nanomaterials,
at about EUR 27.5 million globally in 2014, and project it
including bio-based ones; nonetheless, the European Chemicals
to grow to EUR 94.5 million in 2019 at a compound annual
Agency provides guidance on the implementation of REACH for
growth rate of 28 %. Overall, the US and European countries
nanomaterials with respect to information requirements and
are projected to be manufacturing hubs as well as major
chemical safety assessments. There are also specific provisions
consumers of nanocellulose (including CNC and other forms).
for nanomaterials in sector-specific legislation such as food,
17
Holmen Annual Report 2012, p.78
18
Miller, J., (2016), Nanocellulose: Technology, Applications and Markets, presentation at 2016 International Conference on Nanotechnology for 53
Renewable Materials, Grenoble, France
 biocides, pharmaceuticals and cosmetics legislation. Current excellent dispersant of other materials (such as pigments,
regulations do not constitute a barrier to the introduction metal oxides, or graphene).
of the technology. The potential for dedicated chemical leg-
islation pertaining to nanomaterials could, however, become As Melodea’s business model focuses on making revenues
a barrier in the future. via licensing, patents are indispensable. Melodea has been
granted two patents (patent families) and has several
Despite the absence of dedicated regulations for nanomate- additional applications in the process.
rials, several studies have been carried out to evaluate the
potential environmental and health hazards of nanocellulose. ENVIRONMENTAL IMPACT
Melodea has carried out eco-toxicity tests for CNC, showing
zero toxicity; which is line with the findings of other independ- The CNC itself is 100 % bio-based and only consists of biode-
ent toxicity tests of CNC. gradable, natural, non-toxic cellulose. The bio-based rating of
the final product depends on the product’s final composition.
Being “nano” however, CNC could suffer from the somewhat
ambiguous social acceptance of nano-technology. At large, this The current feedstock is wood pulp. The feedstock for Melodea’s
is because it is a relatively new area that is little understood and production facility in Sweden originates from nearby forest
has remaining uncertainties about potential (long term) risks. plantations. In the optimal case, a CNC plant is located at a
pulp or paper mill where the collection and handling of wood
TECHNOLOGY INFORMATION pulp already occurs, eliminating the need for transporting
feedstock. Given that Melodea’s business model relies on
CNC is extracted from wood pulp (or waste products of licensing, the sustainability of the feedstock depends on the
the pulp and paper production process), via a chemical sourcing policy of the specific mill in question.
process that breaks down cellulose fibres. Melodea’s CNC
production process encompasses a recovery method of the Melodea’s existing partners from the paper industry both have
chemicals that renders the process both cost effective and sustainable forestry practices in place. As an alternative to wood
environmentally sound. The Technology Readiness Level pulp, the waste from the pulp and paper production processes
(TRL) is 7 (system prototype demonstration in operational can be utilised as feedstock. However, depending on the waste
environment). type, the price of wood pulp, as well as the production scale and
geography, the sludge-based production process may be less
The advantage of the underlying technology stems from competitive and less environmentally sustainable compared
the resulting product’s properties, including: high transpar- to pulp-based production. This is due to higher chemical input
ency, homogenous dispersion, no forming of aggregates, needs for the pre-treatment of sludge before it can be used
self-assembly to homogenous films, smooth surface, and as feedstock, for which the cost can be substantial.

THE WAY FORWARD

The recent investment in Melodea by Klabin in addition to Holmen, signifies that Melodea’s technology faces a
positive outlook. With backing from two leading forestry conglomerates, Melodea expects to diffuse the technol-
ogy in the pulp and paper industry and be profitable by 2020.

The forestry and paper industry faces a continued decrease in paper consumption because of digitalisation.
The growth in packaging (boosted by e-commerce) provides further opportunities. However, this segment is not
without challenges as plastics are currently more competitive compared to paperboard due to, for example, low
oil and gas prices. In response, the European forestry and paper industry has set itself the goal to deliver about
EUR 3.5 billion added value in Europe by 2050 from the development of bio-based products. Melodea’s CNC pro-
duction technology enables the pulp and paper industry to adapt to changing market conditions by developing
new products and technologies and exploiting new business opportunities and models. The investment by two
players in the pulp and paperboard industry is indicative of this.

The immediate potential for the deployment of Melodea’s CNC technology lies with the pulp and paper industry,
but the technology can make use of any cellulose-containing feedstock including agricultural and food waste
streams. This feedstock flexibility makes the technology in the long term also a potentially attractive investment
in agriculture and food industries.

This factsheet has been compiled from information collected in April 2018.

54
Paptic® Bags
by
Making paper bags more
Paptic Oy reusable

PRODUCT NAME
Paptic®
PRODUCT DESCRIPTION
Flexible bag and wrapping material for e.g.
carrying bags applications
FEEDSTOCK
Primarily wood pulp; Depending on
application: PLA, Viscose and others
ORGANISATION
Paptic Oy
EMPLOYEES
12 (2017)
COUNTRY
Finland

R&D START
2015; Background technology available PRODUCT
since mid-2000s Paptic® is a wood-fibre-based flexible bag and wrapping material that aims to replace
MARKET ENTRY DATE plastic bags and wrappings made from fossil resources. Typical commercial applications
2016 are as carrying bags, pouches, sacks, banners, or shipping bags. The company is focused
PRODUCTION CAPACITY on the strategic niche application as a carrying bag. Paptic® is highly suitable for reuse,
25 tonnes Paptic® material/year; which strengthens the visibility of customers’ brands in the public domain. Paptic® is
5,000 tonnes projected in 2018
80–95 % bio-based, depending on the specific application, and it is recyclable in exist-
PRODUCTION VOLUME ing paper collection systems.
20 tonnes Paptic® material/year
SALES (GLOBAL) SUCCESS
EUR 50,000 Paptic secured seed investments from multiple private investors during its formation in
INVESTMENT 2015, when Paptic was spun off from a public R&D company in Finland. One year later,
EUR 1.9 million the company entered the market with the Paptic® carrying bag in 2016. It is available on
PRICE a small scale, and it is currently not offered at a competitive price compared to other car-
Depends on application; EUR 0.20 to 0.40 rying bags due to a small production capacity. However, Paptic has secured product-spe-
as carrying bag; Three-fold sales price
compared to standard paper cific funding from the SME Instrument under Horizon 2020 to scale up the production to
a commercial level. Consequently, Paptic projects an increase in the production capacity
EARNINGS
EUR -874,000 from 25 tonnes in 2017 to 5,000 tonnes in 2018, thereby providing for economies of
scale.

CHARACTERISTICS PROSPECTS
• 80–95 % Bio-based, depending on Paptic plans to get first commercial deliveries operational by the third quarter of 2018.
application (OK Biobased certified)
• FSC/PEFC certified wood pulp The resulting economies of scale will render the product more price competitive. As a re-
• 80 % Recyclable sult of this development, Paptic anticipates to grow to 30 employees by 2018 and break
• Biodegradable even by 2020. Following several negotiation rounds with large companies, Paptic contin-
• Can be recycled with paperboard
• 4 Patents ues its efforts to identify new equity financing opportunities. Paptic is further engaged
• Trademarked with the development of the next generation of feedstock, of which recycled fibers are a
potential source.

55
 HISTORY Drivers of success
»» Focus on niche market application. Paptic utilized the mate-
In the mid-2000s, researchers at a public government-owned rial’s characteristic of longevity to enter the market with an
R&D company in Finland, VTT Technical Research Centre (VTT), application, in which the reusability of a carrying bag has a
developed several technologies that build the foundations of marketing effect.
the product Paptic®. Recognising the market potential, Paptic’s »» Seed investment enabled Paptic to instantly focus on the
development of the production technology.
founders spun-off the company from VTT in 2015 and secured »» Paptic® material can be processed to carrying bags with
seed investments in that process. existing machinery for paper and plastic bags, which reduces
the adoption and production costs in its niche application.
In that same year, Paptic developed the first prototypes and
applications, and started a prototype production line in early
2016. By mid-2016, Paptic entered the market with carrying the material’s reusability. In the case of a carrying bag, a
bags. These were sold to a Finnish fashion retailer (Seppällä, higher re-usability results in strengthened visibility in the
which went bankrupt in 2017) and are currently sold at most public domain of a given print on the bag.
of the Finnish pharmacies and Fazer stores (bakery and leading
chocolate brand) in Finland. Paptic entered initially into a strategic partnership with a
large Finnish paper manufacturer, with whom their respec-
Paptic® carrying bags are not yet price-competitive to estab- tive products were co-developed, as their technologies had
lished materials for carrying bags, such as plastic and paper, some alignments. This partner invested into a large-scale
but at same price point compared to other reusable bags. production facility in 2016, which Paptic could have used to
This is mainly due to the current small production capacity of further develop and produce the Paptic® material. This partner
only 25 tonnes annually which provides for no economies of withdrew however and shut the production plant down when
scale in production. The Paptic® material as such competes it was not successful with its own applications.
with flexible plastic and non-reinforced paper wrapping and
bagging materials in a market that is largely cost driven. This exit of a partner with the financial capacity to incur the
This market feature entailed a risk that Paptic® would not be capital expense of establishing a production facility put Paptic
sufficiently price competitive and that it could be difficult to in a vulnerable position, as Paptic itself could not mobilise
succeed in identifying the first client to enter the market with. the required financial capacity. The company then decided to
out-source the small-scale production to an external manu-
The characteristics of the Paptic® material helped the company facturer thereby avoiding the high capital expenditure involved
to mitigate this risk. Paptic® has a higher impact resistance in establishing the production facility.
and longevity than plastic or paper bags. This makes Pap-
tic® suitable as a reusable carrying bag. Focusing on these Paptic reports that it has been negotiating with multiple po-
properties, Paptic managed to identify a niche application, tential partners since the exit of its previous partner. These
in which customers are willing to pay a higher price for negotiations most often fail due to a lack of strategic align-
ment between Paptic and the larger companies in question.

SWOT ANALYSIS FOR PAPTIC® BAGS

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Flexible feedstock allows Lack of skills to find a Attention from large Market with many old
valorization of waste financial equity partner brands (e.g. H&M & Lego), players, as well as many
streams and collaboration with new players that also
Launch of new packaging large brands (e.g. The Body offer novel materials and
Production of carrying materials to existing Shop) features
bags from the material recycling systems is
can occur on existing challenging EU funding enables the High regulatory cost to
paper and plastic bags construction of a com- enter food-packaging
production machinery Still in need for further key mercial-level production certification
partner (brand) to go to facility
Properties of bags allow market with
for a niche application Environmental impacts
Price competitiveness is from plastics is an increas-
Patent protected challenge for scale-up ing and global concern
56
Making paper bags more reusable

FUNDING As a producer of bio-based wrapping options Paptic states

to face competition from bio-plastics (like PLA, with Nature-
Paptic accumulated EUR 1.9 million worth of seed investment works and Corbion as main competitors) and starch-based
during the spin-off from VTT in 2015 and 2016. Finance was wrapping (with Novamont as the main competitor). On the
also brought in by two venture capitalist firms (public VTT Ven- domain of carrying bags, Paptic considers Billerud Korsnäs
tures from Finland and private Proxy Ventures from the United as a potential competitor who produces paper materials with
Kingdom), as well as private investors (Besodos Investors partially similar properties of Paptic®.
and seven other individuals). In return, these investors have
gained an ownership stake in the company. Major investors REGULATORY ASPECTS
further obtained a seat on Paptic’s board. As Paptic states, the
board takes an active role in developing the company further The most recent amendment of the packaging and packaging
through their existing business networks. This enables Paptic waste directive, Directive (EU) 2015/720 as regards a reduc-
to continue the development of the production technology. tion of the consumption of lightweight plastic carrier bags,
pursues the objective to reduce the consumption of lightweight
Paptic has further secured EUR 2.2 million product-specific plastic bags. While it does not promote bio-based carrying
funding from the SME Instrument under Horizon 2020 to bags as such, it requires Member States to curb the use of
build its commercial scale production facility. It will become lightweight plastic carrier bags, which can make Paptic® bags
operational in 2018. As a result, the annual production capacity a more favourable alternative.
will increase 200-fold to 5,000 tonnes per year via the interim
model and finally by end of 2019 to 40,000 tonnes per year. Paptic® can also be used for food wrapping, but it is currently
only approved for contact with dry foods. Paptic® material does
not yet have a sufficient water vapour barrier to be feasible
TURNOVER AND PROFIT OF PAPTIC OY for general food packaging applications. Paptic purposely
2015 2016 2017 de-selected food wrapping at this stage as it entails a more
strictly approval process. This in turn requires more intensive
Turnover (EUR 1,000) 0 13 50 product development to ensure regulatory compliance.
Profit (EUR 1,000) -306 -840 -874

Source: Asiakastieto.fi & Paptic Oy

TECHNOLOGY INFORMATION
Paptic® is available on the market, but is so far only on a small
The table above shows Paptic’s turnover and profits. Paptic scale. The Technology Readiness Level (TRL) is 9 (actual
has not been profitable as of 2017 and wrote a loss of EUR system proven in operational environment).
874,000 in 2017, owing to extensive product development.
The company has however increased the turnover from EUR The main feedstock is the cellulose obtained from wood pulp.
13,000 in 2016 to EUR 50,000 in 2017, indicating that Paptic’s This accounts for 80 %–95 % of the raw material inputs, de-
sales are growing, yet still on a small scale. pending on the desired properties (e.g. is the material converted
by paper or plastic machines). The remaining secondary raw
MARKET INFORMATION materials are cellulosic fibres, viscose, or polylactic acid (PLA),
depending again on the desired properties.
The total, bio-based and non-bio-based, global flexible packing
market is projected to grow from 27.4 million tonnes in 2017 While the product aims to replace plastic bags, and has similar
to 33.5 million tonnes in 2022, attaining a global market value properties as conventional plastic wrapping, it can also take
of EUR 230 billion. Regarding Paptic’s current niche application on the properties of paper. According to Paptic®, the material
as a carrying bag, the European bags and sacks production stretches up to 20 %, compared to 5–7 % in typical packaging
capacity is expected to grow to 8.77 million tonnes until 2024. papers. Combined with a higher durability against water and
tear than paper, Paptic® has a 4–6 times higher tear resistance
Paptic reports that as of spring 2017, several major brands than typical paper used in packing applications.
were testing Paptic’s® feasibility as a possible new packing
material. These tests relate to different possible applications: In the application as a carrying bag, the conversion of the
carrier bags, non-food flex packing, and medical packaging. The Paptic® material to bags can occur with existing paper and
potential customers include primarily clothing retail and man- plastic bag converters. From the production angle, the transi-
ufacturing companies, in which shopping bags are widely used. tion to Paptic® only demands an investment into the Paptic®
While most companies are anonymous, possible additional material and not into new bag converter lines. This significantly
customers could be companies such as C&A, H&M, and Lego. reduces the adoption costs.

57
 ENVIRONMENTAL IMPACT
GWP OF DIFFERENT MATERIALS (PAPTIC ANALYSIS)
Paptic’s feedstock is bleached softwood pulp from PEFC and/
Material Kraft LDPE, Paptic Paptic
or FSC certified, primarily from Finnish, forests. Paptic® can Paper 10 % 2017 2020
be recycled with mixed paper streams, and where availa- recycled
ble with cardboard. This means that consumers can recycle
GWP (CO₂ eq/kg) 1.54 2.56 1.18–1.72 1.09–1.41
Paptic® bags as cardboard, even if it has the properties of
a plastic bag. Source: Paptic Oy

Paptic conducts internal LCA assessments and has compared

the global warming potential (GWP) with Kraft Paper (i.e. paper
made from chemical pulp) and Low Density Polyethylene bags
(LDPE), also known as ‘bags-for-life’ (see below). Paptic® has
a GWP interval that is partially higher than Kraft Paper, and
may thus be less climate friendly today, depending on the
product recipe and production scale. By 2020, however, this
interval is expected to completely undercut Kraft Paper, as a
result of the expected gains in production efficiency (e.g. lower
grammage of the material) and growth in production scale.
The comparison excludes lightweight plastic bags made of
High Density Polyethylene (HDPE), which tend to exhibit the
lowest GWP of carrying bags. Yet, they are not as suitable
for reuse as Paptic® carrying bags.

THE WAY FORWARD

Paptic plans to put its first commercial production facility into operation by the third quarter of 2018. This will
increase the capacity by a factor of nearly 200 to 5,000 tonnes per year. This is in turn projected to generate
significant economies of scale for Paptic®, making the product in effect more price competitive. As a result of this
development, Paptic anticipates to grow to 30 employees by 2018 and break even by 2020. Paptic has further
announced that it will increase its production to 40,000 tonnes per year by the end of 2019, paving the way for
a future large-scale production.

Paptic continues its efforts to find a new partner and obtain additional equity funds. Paptic has hired an external
financial investment advisor (MCF) to improve its financing opportunities and raise more equity funds. The equity
is intended to be used to maximise the potential financial leverage to use debt financing from e.g. the EIB. As of
March 2018, Paptic was in negotiations with three EU based specialty paper manufacturers for potential strate-
gic partnerships, which indicates that Paptic can be a new player on the paper market that offers an interesting
business opportunity for companies in the paper and cardboard market.

Paptic continues to develop the next generation of the feedstock, with recycled textile fibers as a possible feed-
stock. In addition, Paptic pursues the target to increase the bio-based content from 80–95 % to 100 %.

This factsheet has been compiled from information collected in March 2018.

58
Abilar®
by Wound ointment based on
Repolar spruce resin solution
Pharmaceuticals Oy

PRODUCT NAME
Abilar®
PRODUCT DESCRIPTION
Wound care product
FEEDSTOCK
Resin from Norway spruce (picea abies)
ORGANISATION
Repolar Pharmaceuticals Oy
(limited company)
EMPLOYEES
6 + 3 owners contributing to the R&D
COUNTRY
Finland

R&D START
2000
PRODUCT
MARKET ENTRY DATE
2008 Abilar® 10 % Resin Salve is an ointment for treating wounds and burns, in particular hard-
to-heal wounds. The active ingredient is a refined resin obtained from the Norway spruce,
PRODUCTION CAPACITY
20,000 tubes/month collected in the Finnish Lapland. The refined spruce resin is mixed with a salve base to
produce the Abilar® ointment. The share of the active ingredient is 10 %, which has been
PRODUCTION VOLUME
5,000 tubes/month found to be sufficient for the antimicrobial and anti-inflammatory effect required. The
SALES (GLOBAL)
product is used in home care, as well as by health-care professionals.
EUR 0.5 million (2016)
SUCCESS
INVESTMENT
The concept was developed in the 2000s, and supporting research conducted by a small
Not disclosed
team of scientists and doctors. They founded Repolar in 2006, using own funds and in-
PRICE
kind contributions to develop an ointment based on the resin solution. The commercial
Comparable to conventional wound
ointments: ~ EUR 1.20 per day of production of Abilar® started in 2008, and has reached a stable level of sales over the
treatment following years. The product has been profitable over the last four years, and the profits
EARNINGS are reinvested into market expansion.
Positive at product and company level in
most years PROSPECTS
Abilar® has reached a stable level of sales in Finland. The company aims to grow Abilar®
CHARACTERISTICS
in other markets. This is expected to lower relative production costs, due to economies of
• Effective (scientifically proven) wound scale. An important step in this strategy is the inclusion of Abilar® into the UK National
treatment Health Service (NHS) list of reimbursable medical appliances. The demand is expected to
• Bio-based active ingredient
be driven primarily by proven performance, encouraging use by health-care professionals.
• Patent protected
• Trademarked (2010, the EU) In addition, growing consumer consciousness about health and environmental effects of
• ISO13485:2003 certified competing products plays a role.

59
 HISTORY Drivers of success
»» Abilar® has a unique market niche in which it exhibits
Research behind the development of Abilar® ointment started
positive results on difficult to heal wounds, at the same time
in 2000, when one of the founders of the company started to being natural and safe
work as a medical doctor in Lapland. He became interested in »» Proven performance and applicability to a wide range of
the local practice of using the Norway spruce resin for wound ailments which leads health care professionals to use it
regularly
healing. Together with family and colleagues at the Helsinki »» A dedicated owner group composed of specialists willing
University Central Hospital, he formed an R&D team to study to provide in-kind contributions and reinvest profits into the
the pharmaceutical properties of the resin. This research development of the company
provided the clinical proof necessary to show that a solution »» Cultural factors: the product is based on a local Finnish prac-
tice. In particular at initial stages, this helped gain attention
made from the Norway spruce resin has antimicrobial and in the Finnish media and market
anti-inflammatory properties and is safe to use.

Repolar was founded in 2006 to produce and market res- Staff specialised in marketing, sales and quality control were
in-based products. The first two products were launched in hired to lead these activities, complementing the skills of the
2008, one of which was Abilar®. During the course of 2007 owners who are scientists and doctors.
to 2015, the founders published various research studies in
medical journals to illustrate the science behind the resin. Abilar® entered its first market abroad in 2013 and is now
They conducted clinical trials and studies to show the prac- available in five EU Member States (Austria, Belgium, Greece,
tical effectiveness. Sweden, and the UK). The product accounts for about half of
Repolar’s total annual turnover.
Consumer skepticism was seen as a potential risk. To counteract
this, Repolar aimed to demonstrate good clinical performance FUNDING
and document it in a number of formats (cases, journal arti-
cles). In addition, Repolar was able to gain media attention at Repolar has been profitable since 2013. On its way to prof-
the time of publishing the final R&D study, spurring demand itability, the company did not bring in external investors. The
in Finland. The link of the product with local Finnish practice original network of owners wanted to retain full ownership
has also contributed to initial consumer and media attention. of the company. The company obtained funds primarily from
its sales and in-kind contributions by the owners. The re-in-
The production costs of Abilar®, in particular fixed costs, are vestment has been particularly high in 2014 and 2015. This
relatively high, limiting potential margins. Upscaling produc- was used to expand office space, purchase IT equipment, and
tion would generate economies of scale, and hence render invest in marketing and quality control.
the product more competitive. However, the Finnish market is
small leaving little room for this. Thus, the company started The move from the development to the production stage
activities to expand into other markets and thereby increase required little investment. Repolar collects and refines the
its market. resin in-house, and has outsourced the mixing of the active

SWOT ANALYSIS FOR ABILAR®

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Willingness to provide Capacity/capability to “Natural” health features Competition with large

in-kind contribution which expand market are demanded by con- pharmaceutical companies
drove the initial phase sumers
No investor on board Requirement for regulatory
Well-documented high that could provide National support schemes reclassification to higher
performance additional equity in case of facilitates research for risk category (leading to
unforeseen challenges (e.g. future applications costs)
Patent protected regulatory reclassification)
Network of possible Likely to remain a niche
Wide application potential Limited internal capacity partners to build future product
Minimal/no side effects to develop novel applications
applications
60
Wound ointment based on spruce resin solution

REGULATORY ASPECTS
TURNOVER AND PROFITS OF REPOLAR, AND
APPROXIMATE SHARE OF ABILAR® Abilar® is subject to the European Medical Device Directive
(93/42/EEC), which classifies medical products in the European
2013 2014 2015 2016
Union, ranging from class I (low risk) to class III (high risk).
Turnover (EUR 1,000) 1,024 928 853 956 The categorisation depends on length of contact, the level
of invasiveness and body part affected. The classification is
Approx. Abilar® share 512 464 427 478
made according to the claim of purpose stated by the man-
ufacturer. Abilar® is categorised as class IIb, since it aims to
Net profit (EUR 1,000) 355 0 -1 88 actively heal wounds. For this category, the proof required
Approx. Abilar® share 178 0 -0.5 44
to maintain the licence to sell is the documentation of safe
use. Registering the same product as a pharmaceutical would
Source: asiakastieto.fi and company estimates have led to significantly higher cost, as the burden of proof
and required dimension of clinical trials is higher.
ingredient with the salve base, as well as the packaging. Re-
Similarly, if the classification of Abilar® 10 % resin salve was
polar did not incur high capital expenses for the production
changed to class III, this would require a significant financial
machinery or the production of the salve base. In terms of
investment. In that case, the marketing of Abilar® would re-
conformity with regulations, Abilar® is registered as a medical
quire explicit authorisation rather than inspection. The com-
device and only the proof of safe use is required to market it.
pany has met some pressure from authorities to change the
classification to class III, based on the interpretation of the
The company has taken part in several projects funded by
intended purpose of the product. This change would however
Tekes, the Finnish Funding Agency for Innovation. Most re-
be very financially demanding. Therefore, the company aims
cently, it has participated in a study of the anti-inflammatory
to maintain the description of the product purpose modest,
properties of resin (2015–18) and XBoost market study and
in order to keep Abilar® at class IIb.
expansion project (2016–18).

MARKET INFORMATION TECHNOLOGY INFORMATION

Abilar® competes primarily with silver-based and honey oint- The product is manufactured on a commercial scale and is
ments and dressings used for wound healing. It is particularly available in multiple EU Member States. It has been on the
suited for hard-to-heal wounds (e.g. diabetic ulcers, burns). It Finnish market since 2008. The product is therefore at the
is sold in most Finnish pharmacies, and has reached consistent Technology Readiness Level (TRL) 9 (actual system proven
sales levels in its home market. The company has launched in operational environment).
the product into foreign markets.
The product is used in home care or by medical professionals
One important milestone in this respect is that the UK National to speed up wound healing and limit the growth of bacteria
Health Service (NHS) has included Abilar® into the approved and fungi in the wound area. It is effective in a variety of
appliances list for reimbursement. external applications where anti-bacterial and wound healing
properties are needed, such as traumatic wounds, surgical
In addition, an independent comparison of wound healing prod- wounds, ulcers, burn injuries, and bacterial, or fungal infections.
ucts by the NHS has concluded that Abilar® 10 % resin salve
is effective in wound treatment, compared to alternatives.19 The active ingredient of Abilar®, Norway spruce resin, is bio-
based. This constitutes 10 % of the product. This level has been
Based on these successes, the company expects to grow sales found to be sufficient for the antimicrobial and anti-inflamma-
in the existing foreign markets, as well as enter new ones. tory effect required. Ten freelance collectors are contracted
It continues to conduct clinical studies to continue building by Repolar. They collect the resin in Finnish Lapland forests.
international trust. The resin is then refined and a solution prepared by Repolar.
This occurs in a small production facility in Kolari, Lapland.
In terms of pricing, treatment with Abilar® was shown to take Two external partners are contracted to mix the solution with
an average of 43 days, with a mean cost of EUR 1.2 per day. the salve base to prepare the ointment. For this step, the
No comparative study has been conducted to show the costs active ingredient is shipped to southern Finland and Greece
of treatment with Abilar® compared to competing products. for mixing and packing. The salve base used as carrying agent
Direct comparison of unit costs is not appropriate, since length is largely non-bio-based.
of treatment and amounts used differ.

19
Whitehead, Dawn, 2017, Case Study: Abilar® 10 % Resin Salve in Unresponsive Diabetic Foot Wound
61
 According to World Intellectual Property Organisation data- The competing products are ointments and dressings based
base, Repolar has eight patents related to applications of the on silver, medical honey, iodine or protease inhibitor dressings.
Norway Spruce resin. Direct comparison of environmental impacts with competing
products is challenging. While for dressings the production
ENVIRONMENTAL IMPACT process is different, ointments may contain a multitude of
different ingredients aside from the active agent.
Repolar has not conducted an LCA on the production of Abi-
lar®. According to the company, the collection of the active
ingredient has almost no negative environmental impact. The
resin is collected from naturally damaged trees in Finnish
forests and does not involve harvesting nor harming the trees.
The collection only marginally impacts the trees and keeps
all ecosystem services intact.

This resin collection method is sufficient for Repolar’s current

production level. According to the company, production could
be increased by a factor of 10 using the same method. This
would be done by expanding collection in Finnish forests into
neighbouring countries, such as Sweden and Russia. Repolar
has nevertheless invested in a forest patch, in which the
company researches the feasibility of resin production on a
larger scale.

THE WAY FORWARD

R&D is at the centre of the company’s activities, and predates the company itself. Repolar is continuously working
on increasing the clinical trial base of existing products, including Abilar®.

Abilar® has achieved consistent sales in the Finnish market. To benefit from economies of scale and reduce the
currently high relative fixed costs, the company is expanding its markets elsewhere. This includes aiming to scale
up sales in exisiting EU markets, as well as enter new ones, both inside and outside the EU.

The company expects to increase its production. Looking forward, it is exploring new ways to obtain the required
active ingredient.

The anti-microbial properties of spruce resin allow a wide application potential. Thus, there is potential to develop
more products and applications. Examples include resin solutions in animal feed to reduce the need for antibiot-
ics, as ingredient in surface cleaning products due to antiseptic properties, and in cosmetics, to replace toxic sub-
stances. These applications require expertise outside of the core area of the company (e.g. animal feed, cleaning
products, cosmetics). Thus, the Repolar team is working with different partners to develop these applications. For
example, in partnership with Suominen Oy, Repolar is studying the posibilities to produce nonwowen fabrics (e.g.
wipes) with antimicrobial properties.

By 2020, the company aims to reach the levels of earnings where they can start paying dividends to investors
and/or salaries to the owners who currently provide their work in-kind.

This factsheet has been compiled from information collected in April 2018.

62
BioLite™
by
A path toward lightweight
Trifilon AB sustainable plastics

PRODUCT NAME
BioLite™
PRODUCT DESCRIPTION
Natural fibre reinforced polypropylene
FEEDSTOCK
Industrial hemp fibres
ORGANISATION
Trifilon AB
EMPLOYEES
8 employees (2018)
COUNTRY
Sweden

R&D START
2015
MARKET ENTRY DATE
PRODUCT
2017
BioLite™ is a hemp fibre reinforced heterophasic copolymer designed for injection moulding.
PRODUCTION CAPACITY
BioLite™ combines natural fibres from industrial hemp with polymers to create sustainable
Pilot-scale plant (current): 400 tonnes/
year (EU) bio-composites. BioLite™ combines lightweight and good mechanical properties such as
Commercial plant (planned): 4,000 tonnes/ high stiffness, good impact resistance and low abrasion that meet the requirements for
year (EU) (2018); 20,000 tonnes/year (EU) many products. BioLite™ is used in a variety of applications such as automotive com-
(2022)
ponents, home and garden goods, consumer products and luggage. BioLite™ is currently
PRODUCTION VOLUME available in two forms AP21 (10 % bio-based – natural fibres – and 90 % polymers) and
100 % of the current plant capacity
AP23 (30 % bio-based – natural fibres – and 70 % polymers). Currently, Trifilon AB is
SALES (GLOBAL)
testing new grades of BioLite™ that will be launched by end of May 2018.
EUR < 0.5 million
INVESTMENT SUCCESS
EUR 1.5 million Trifilon AB has developed a lightweight, price-competitive green alternative to mineral
PRICE filled and glass fiber reinforced composites with good mechanical properties and very
EUR 1.6–2.5/kg low moisture absorption that allows it to be used in demanding environments. Trifilon AB
EARNINGS successfully managed to overcome initial risks and challenges related to the novelty of the
Break-even is expected in 1 year i.e. 2019 technology and leverage private and public national capital investments for the initial
R&D and for the establishment of a pilot plant in Sweden. Currently, Trifilon AB has succeed-
CHARACTERISTICS ed in attracting 44 shareholders. Trifilon AB expects to turn profitable by mid-2019 as a
• 30 % or 10 % bio-based result of an increasing pipeline of customers and anticipated increased production capacity.
• Low carbon footprint
• Non-toxic
PROSPECTS
• Recyclable
• 10–25 % lighter than competing The commercial potential of the product is high. The market regards the product positively
compounds as a result of its properties and bio-content. The price of BioLite™ is higher than conven-
• 30 % stiffer than other mineral filled tional competing composites, produced from oil based plastics and glass fibre / mineral
copolymers
reinforcement, but lower than bio-based polymers. The product offers high-performance
mechanical properties and is 10–25 % lighter than conventional composites. Given the
various applications of BioLite™, the product has good potential on various end-markets
(including automotive, industrial and consumer goods and home furnishings) as well as
geographical markets (e.g. China). In expanding to new markets, Trifilon AB focuses on
completing performance trials for new applications that are estimated to have a time-
63
to-market of 1–3 years and on signing agreements with large customers.
 HISTORY Drivers of success
»» Joint venture with Plastal Sverige AB to develop a new light-
Trifilon AB was founded in 2012 as a spin-off from research weight bio-composite for use in exterior auto applications;
conducted by the founders of Trifilon AB with Linköping Uni- »» Trifilon AB’s capacity to leverage effectively internal and
versity. The focus of Trifilon AB was to develop natural fibre external funding and to utilize the financial support for R&D
reinforced composites as an alternative to carbon composites and commercialisation;
»» High commercial potential owing to the lightweight and
for the aerospace industry. Today, the company produces a mechanical properties of BioLite™;
range of bio-composites. »» Price competitiveness in comparison to traditional competing
materials and bio-based plastics;
»» Proximity and availability of feedstock.
BioLite™ is a natural fibre reinforced polypropylene that was
developed in 2015 through a strategic collaboration with Plastal
(one of Scandinavia’s largest manufacturers of plastics parts Currently, BioLite™ can be used for a variety of applications and
for the automotive sector). The aim of this collaboration was is commercialised in two classes: BioLite™ AP21 and BioLite™
to develop a lightweight, robust material that could be used in AP23. BioLite™ AP21 is suited to high impact applications
serial, high volume components for the automotive industry. like automotive panelling, home and garden goods, consumer
products and luggage. BioLite™ AP23 was designed for ap-
In 2016, BioLite™ passed all the tests of its collaboration plications where stiffness was critical like brackets, vacuum
partner Plastal, which resulted in BioLite™ being presented components and industrial parts.
to key Plastal clients as a new lightweight material for serial
production. In 2016, Trifilon AB was ranked by Cleantech Trifilon AB has 8 full-time employees, the majority of which
Scandinavia Nordic among the ten most promising Nordic are directly involved in the manufacturing process of the
energy and green-tech start-ups. product. In addition to in-house staff, the company relies on
the support of 10 additional consultants that provide ad-
A major break-through in terms of market access was the hoc support, including accounting, PR marketing and other
signature of a five-year exclusivity deal with EPIC Travelgear, business-related services. BioLite™ is currently produced at
a luggage manufacturer for the production of the luggage Trifilon AB’s pilot plant in Nyköping, Sweden, which has a
EPIC PhantomBIO. production capacity of 400 tonnes/year.

SWOT ANALYSIS FOR BIOLITE™

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Ability to attract private Challenges in scaling Market preferences High regulatory costs for
financing for R&D and up due to high initial – mainstreaming of testing and licensing
commercialisation investments sustainability demands
(SDG) The bio-based feature may
Joint venture with Plastal Piloting and testing not be sufficient to justify
processes are time- Market pull, especially the ‚high price‘ but once
Feedstock flexibility consuming and costly from automotive segment, scaled up the costs will be
Access to low-cost for lightweight materials reduced
Relatively small
feedstock organization in comparison Push to scale up electric Low cost carbon fiber
Low switching costs (no to other plastic vehicles, means more solution becomes
special equipment needed) manufacturers focus on lightweight commercially available
materials
Lightweight plus good No patents Nano-carbon and
mechanical properties Local flax fibres offer nanocellulose become
improved costs and economically viable
High level of technical sustainability
knowledge
Modularization of
Based in Sweden (culture production for foreign
of cooperation between production cells
companies, large OEM’s
with global reach,
sustainability in focus)
64
A path toward lightweight sustainable plastics

In 2017, the turnover of the company was approximately Polypropylene plastic accounted for 19.3 % of the EU plastics’
EUR 68,000 but Trifilon AB expects a 10 fold increase in demand, in 2016. The PP market has grown by almost 10 %
turnover in 2018 (i.e. EUR 680,000). Trifilon AB envisages an in the past 5 years. Forecasts show that in the following 5
increase in production capacity to +4,000 tonnes/year by years the demand for PP is expected to remain high. In the
end of 2018, respectively 20,000 tonnes/year by 2022. As past few years, the share of PP in the automotive sector has
a result of increased capacity and economies of scale, the increased as a result of reduced costs associated with the
company expects to break-even in 2019. material. In the automotive sector, PP is used to produce light-
weight components but BioLite™ offers an alternative to this.
Trifilon AB successfully overcame so far the initial risks re-
lated to the novelty of the technology and the difficulties in BioLite™ has a higher price than conventional competing
securing investments for the up-scaling of production. Some composites but lower than bio-based polymers produced by
challenges remain as the profitability of the company remains a major competitor. The company is aiming at lowering the
low. However, the prospects are positive as Trifilon AB has costs of the product by upscaling production and benefitting
low debt and has plans to increase capacity in Scandinavia from economies of scale.
(for the time being) and expects to turn profitable in 2019.
According to the company, the increase in capacity is a key REGULATORY ASPECTS
factor in providing for economies of scale and, hence, for an
improved price competitiveness. The evolution of the European and national regulatory frame-
work indirectly supports the development and commercial-
The business vision of Trifilon AB for the development of Bio- isation of BioLite™. At both EU and national level, the push
Lite™ focuses on replacing customers’ conventional plastics for more rigorous requirements for products concerning their
with a lighter, stronger, greener alternative. sustainability has provided a stimulus for demand for BioLite™.

FUNDING However, the commercialization of BioLite™ on new markets

(e.g. food market) is challenged by the existing regulatory
The seed financing for R&D and commercialisation of BioLite™ framewok on materials that come into contact with food
came primarily from private capital (equity, loans) comple- products. The EU list for approved materials for food packaging
mented with internal resources. at EU level (Regulation EU No 10/2011) currently contains
only one natural fibre material that is approved, i.e. cellulose.
The initial investments in Trifilon AB came from its founders, According to the company, new materials such as BioLite™
as well as support from the local development bank Almi have to pass through costly and complex procedures and
amounting to EUR 50,000. In 2015, Trifilon AB welcomed testing to be approved for use in contact with food.
new joint owners, with the major investor being Ericsson
Capital from Åland Islands. TECHNOLOGY INFORMATION
At the end of 2017, Trifilon AB estimated that the upscaling BioLite™ combines natural fibres from industrial hemp
and commercialisation of BioLite™ would require additional with polypropylene to create a bio-composite that has
investments of EUR 1 million. In the last round of investments at properties similar to conventional composites. The feed-
the end of 2017, 30 additional investors joined (consisting of a stock used for BioLite™ comes from several locations in
mix of venture capital and angel investors), raising the number Europe (Romania, Netherlands, Latvia). For the production
of shareholders to 44. The last investment round brought in of 1 kg of BioLite™, approximately 0.3 kg of hemp fibre is
EUR 1 million in external share capital. Overall, as of 2018, required. Other possible future feedstocsks for the product
Trifilon raised a total of EUR 1.5 million to finance its activities. include flax fibres.

The company estimates that with an additional EUR 4 million, To manufacture BioLite™, Trifilon AB processes raw hemp
it would be able to construct a full scale commercial plant. fibres both mechanically and chemically to ensure that an
optimal bond between the polymer and the natural fibres.
How We Do It
MARKET INFORMATION
We supply lightweight biocomposites for injection molding.
BioLite™ is currently focusing on three key market sectors, ILLUSTRATION OF THE PRODUCTION STAGES
i.e. the automotive and transportation sector, industrial and OF BIOLITE™ We call it BioLite TM

consumer goods, and home furnishings. BioLite™ is providing We source our hemp fibers from Fibers then undergo mechanical cleaning, Finally we mix the fibers with
a substitute material for common plastics used in these Swedish & European farmers chemical purification and optimization process polymers & additives

markets, e.g. polypropylene (PP). How We Do It

In 2016, 335 million tonnes of plastic have been produced We supply lightweight biocomposites for injection molding.
Trifilon Proprietary
Processing
worldwide and around 60 million tonnes of plastic has been We call it BioLite TM

www.trifilon.com
produced in the EU. Currently, bioplastics represent approxi-
mately 1 % of the total annual plastic production. We source our hemp fibers from
Swedish & European farmers
Fibers then undergo mechanical cleaning,
chemical purification and optimization process
Finally we mix the fibers with
polymers & additives
65

Trifilon Proprietary
 The primary state of BioLite™ is in granulate form. BioLite™ Low carbon footprint: Overall, the production of BioLite™ has
AP21 contains 10 % natural fibres and 90 % polypropylene a net CO₂ saving of 163 kg CO₂/tonne compared the production
and BioLite™ AP23 contains 30 % natural fibres and 70 % of glass fibre which results in a CO₂ burden of 1,700 kg CO₂/
polypropylene. The difference between the two is in terms tonne. The low carbon footprint is primarily the result of the
of bio-content and stiffness. Still, both products can be use of a feedstock that has a high carbon capture potential.
used in injection moulding using conventional equipment.

The Technological Readiness Level (TRL) is 8–9 (i.e. although

the product is on the market it is not yet at a fully commercial CO₂ FOOTPRINT OF 1 TONNE HEMP FIBRE
level). BioLite™ is not protected by patents due to the costly VS 1 TONNE GLASS FIBRE
and time-consuming processes associated with patenting. 2000 1700
1500

ENVIRONMENTAL IMPACT 1000

500 258 300
85 71 96
0
Feedstock sustainability: BioLite™ is produced with differ- -500 -163
ent contents of renewable feedstock (10 % or 30 % of the -1000
-973
content). The feedstock currently used for BioLite™ is derived -1500

Sequestrated CO₂

Planting

Organic Fertilizer

Transport

Fiber Processing

BioLite® Production

CO₂ Savings

Glass Fibre
from natural fibres from industrial hemp. However, Trifilon AB
is also looking into local flax fibre from the production of flax
oil which is currently not utilised in any production processes.
Hemp is a rapidly growing plant that sequesters more than its
weight in carbon dioxide. Additionally, as a very fast growing Source: Internal LCA Trifilon AB
plant, industrial hemp does not require pesticides or herbi-
cides, meaning it has a very low environmental impact during
its production. According to the company, as the feedstock
is grown as a rotational crop, the European industrial hemp
that Trifilon AB utilises does not compete with food crops.

THE WAY FORWARD

The overall outlook for BioLite™ is positive. BioLite™ can be used a substitute to common plastic, e.g. PP. Thus,
BioLite™ has a wide range of applications across a number of markets (e.g. automotive market, consumer goods
etc.) being a building block material in automotive parts, caps and closures and consumer goods such as luggage
and sporting goods. Given the global nature of plastic, BioLite™ has potential in geographical markets outside of
Europe (e.g. in China, USA, etc.). In driving its expansion to new markets, Trifilon AB is focused on supplying existing
Scandinavian customers that have operations in foreign markets and closing new partnerships with producers.

In terms of financial outlook, Trifilon AB is currently trying to increase the profitability of BioLite™ by scaling up
production. In the medium term, the main barrier is the issue related to increasing production capacity. Trifilon
AB estimates that the cost of scaling up production and the construction of a commercial size plant that would
enable the company to deliver lower unit costs would be of approximately EUR 4 million. Trifilon AB envisages
an increase in production capacity to +4,000 tonnes/year by end of 2018, respectively 20,000 tonnes/year by
2022. As a result of increased capacity and economies of scale, the company expects to break-even in 2019. The
demand for BioLite™ is also expected to increase gradually, in particular in the automotive industry, as a result
of the increasing demand for materials that have high resistance, lightweight and have an increased bio-content.

This factsheet has been compiled from information collected in January 2018.

66
ICCP technology
by
Technology for the production
BioBTX B.V. of BTX aromatics from biomass

PRODUCT NAME
Integrated Cascading Catalytic Pyrolysis
(ICCP) technology
PRODUCT DESCRIPTION
Technology for the production of aromatic
compounds BTX from biomass
FEEDSTOCK
Variety of solid and liquid biomass
feedstocks, e.g. wood pulp lignin residues,
used cooking oil
ORGANISATION
BioBTX B.V.
EMPLOYEES
4 direct employees and 5 researchers at
University institutes
COUNTRY
The Netherlands
PRODUCT
R&D START The Integrated Cascading Catalytic Pyrolysis (ICCP) technology has been developed by
2009 (fundamental research); 2012 (proof
of concept)
BioBTX B.V. for the production of aromatic compounds benzene, toluene and xylene (BTX)
from biomass. The resulting product is a 100 % bio-based, ‘drop-in’ alternative to con-
MARKET ENTRY DATE
ICCP patent filed in 2014, published in ventional fossil fuel-based BTX produced as a by-product in oil refineries. BTX compounds
2017; Bio-BTX produced with ICCP to enter are used as building blocks for downstream products of the petrochemical industry, and
the market in June 2018 in particular the manufacturing of polymers such as PET and other plastics. BioBTX B.V. is
PRODUCTION CAPACITY a technology provider, and their business model is based on licensing the technology and
ICCP-based pilot plant of 40 tonnes bio-
providing associated services to companies seeking to produce bio-based BTX.
BTX /year underway (EU)
PRODUCTION VOLUME SUCCESS
60 kg of bio-BTX produced in laboratory; BioBTX is among the first-movers to offer a viable technology to produce BTX from bio-
ICCP-based pilot plant production to start
in June 2018 mass. The value proposition of the ICCP technology is the decoupling of these widely
used chemicals from fossil sources. In accomplishing this, it will contribute to a more
SALES (GLOBAL)
Expected future company sales from sustainable chemicals and plastics industry. A key milestone was achieved in 2017, when
licenses and services in the order of BioBTX B.V. succeeded in attracting private finance from an investment fund to support the
several million EUR per year
scaling up the technology and enhance the professional structure of the company. A pilot
INVESTMENT plant employing ICCP – co-financed by the European Regional Development Fund – is set
Total EUR 3.5 million committed from
private and public investors; Small
to be operational in June 2018.
scale demonstration plant (next phase)
investment EUR 20–40 million PROSPECTS
The prospects for bio-BTX and the ICCP technology are positive. There is high and grow-
PRICE
Resulting bio-based BTX competitive with ing demand for BTX-based plastics, and at the same time consumers and brand owners
fossil-based BTX at approximately EUR increasingly demand lower-carbon substitutes for the manufacture of their products. The
670 per tonne availability of fossil-BTX in Europe is becoming increasingly scarce, owing to a gradual
EARNINGS decline in demand for the primary products produced in oil refineries, where fossil-BTX is
Expects to break-even in 2025
produced as a by-product. Trends toward transport electrification and higher fuel efficiency
standards will likely drive petrochemical companies to search for alternative sources for
CHARACTERISTICS
• Process results in 100 % bio-based BTX and associated ways of production.
product
• Patent protected process
• High degree of feedstock flexibility 67
 HISTORY Drivers of success
»» Patents on core and downstream technologies; an iterative
In 2013, BioBTX B.V. was founded as a joint venture between technology development approach; catalyst and engineering
KNN Groep and Syncom B.V. Building upon past R&D, they expertise
successfully developed and patented the Integrated Cascading »» Capitalising on diverse funding sources and early phase gen-
Catalytic Pyrolysis (ICCP) technology by 2014. The technol- eration of revenues from research consultancy services
»» Light and flexible company structure allowing for fast
ogy produces mixtures of aromatic compounds – benzene, decision-making processes, and encompassing a small,
toluene and xylene (BTX) – from a wide range of biomass highly-skilled in-house team, encircled by strong local part-
feedstocks (for example, crude glycerine, black liquor, wood ners from the University of Groningen and companies along
the value chain
pulp lignin residues, crude vegetable oils and fats, agricultural
»» Ongoing and upcoming regulatory changes and megatrends,
waste streams), as well as from end-of-life materials. Initial such as the electrification of transport that changes the
R&D was conducted, and continues, in partnership with the availability of petrochemicals especially in the EU, a political
University of Groningen. focus on circular economy in the EU, and the re-use and
valorisation of waste streams

The ICCP technology is based on a two-step pyrolysis process.

It protects catalysts from minerals abundant in biomass, a
technical advantage over single-stage pyrolysis. BTX’s main
applications are in high performance, and high volume pol- An important milestone was reached in early 2017, when
ymers such as PET, PBAT, other polyesters, aramid, PUR, ABS, Carduso Capital, among others, invested in BioBTX to en-
epoxy resins, polycarbonate and nylon. able expansion. By June 2018, BioBTX plans to complete
construction of a 10 kg feed/hour (=~40 tonnes/year) pilot
BioBTX’s business model is licensing the ICCP technology to plant in the Netherlands as a further demonstration. Future
chemical and other companies. This model reduces capital plans include construction of a larger demonstration factory,
requirements and is intended for rapid-scale up. However, producing 30–70 kilotonnes of bio-BTX per year.
without an operating plant and concrete examples of applica-
tions, it has been difficult to onboard customers and investors. In the long-term, the company strategy builds on the assump-
As a solution, in 2016, BioBTX collaborated with partners tion that oil refining activities – through which fossil-based BTX
across the value chain to demonstrate the technology. They is produced as by-product – will decline. This would make it
converted crude glycerine, a by-product of the production of a priority for the European and global petrochemical industry
biodiesel, into bio-BTX to construct a 100 % bio-based PET to find alternative ways to produce BTX. In the shorter-term,
cosmetics container. This tangible, high quality end-product many petrochemical processes are moving out of Europe
facilitated a better understanding of their technology by in- and closer to extraction operations. Bio-based BTX produced
vestors, partners and potential customers. in the EU would reduce the EU’s dependence on oil refining.

SWOT ANALYSIS FOR BIOBTX ICCP TECHNOLOGY

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

Patented, more efficient Onboarding investors more Lower-carbon footprint Competition with
technology difficult without production enables production of established companies
facility ‚greener‘ final products in who do R&D on the topic
Licensing business model many sectors
is very flexible Early stage of Low oil and gas prices
development Reduced petroleum
Bio-based BTX applicable production automatically Lagging EU (and
in over 99 % of all fossil- Reliance on side consulting reduces supply of worldwide) regulations
based BTX applications may delay BioBTX progress feedstock for fossil-based on lower product carbon
products (result: increasing footprints
Vast feedstock potential External certification of
environmental benefits can prices)
Price competitive with be a costly and lengthy
fossil-based BTX under Provide EU-based oil
procedure and gas petrochemical
normal conditions
producers with bio-based
alternatives
68
Technology for the production of BTX aromatics from biomass

FUNDING licenses. As prices vary regionally and by aromatic, prices

for ICCP-based BTX can compete with fossil-based BTX when
KNN Groep, Syncom B.V. and the University of Groningen average prices for the latter hover around EUR 670 per tonne.
provided initial funding for the R&D cooperation in ICCP, which
started in 2012. Resources provided included direct funds, Worldwide, the production of BTX is over 100 million tonnes
staff, and facility resources. The founding of BioBTX B.V. in per year. This market is expected to grow by 4 million tonnes
2013 was funded by KNN and Syncom, and at later stage by each year. Some studies estimate that the total market (fossil-
Flohr Beheer B.V., a private investor. and bio-based) may reach 125 million tonnes per year by
2020. This increasing demand provides good prospects for
By 2014–2015, BioBTX B.V. required new funding to continue bio-based BTX, and BioBTX B.V. expects their technology to fulfil
R&D, technology promotion, and outreach to potential part- about half the expected demand growth in the medium-term.
ners and investors. As a solution, in-house staff carried out
side-research for various clients. This included research for BioBTX’s potential customer base ranges widely. They focus
a US-based chemical company Huntsman, also resulting in on licenses and on providing companies with feed- and prod-
an ICCP-based patent for the conversion of black liquor. This uct-specific contract research. They adapt their technology to
side-research bridged the financial gap while the company current processes. As such, they will adapt their technology
built trust and gained visibility with potential customers and on-site to convert various feedstock types and produce the
partners, thus preparing the ground for eventual investors. desired BTX to be used for making high performance/volume
polymers that will later be used in final products. These final
In February 2017, the company onboarded the investment products range from food packaging and insulation to sol-
fund Carduso Capital who provided an initial investment of vents, wire, foam, hoses, and pharmaceutical intermediaries.
EUR 0.8 million against a 35 % ownership share. These funds
allowed the continued technology scale up and recruitment REGULATORY ASPECTS
of a new CEO and a Chemical Engineer.
The bio-based BTX market in the EU, and beyond, is both
BioBTX B.V. has also benefited from EU funds. In particular, limited and enabled by regulatory aspects related to energy,
the establisment of the EUR 0.6 million pilot plant was partly greenhouse gas emissions, and agriculture.
financed by the European Regional Development Fund: the
total EU support amounted to EUR 0.4 million, of which about On the one hand, regulations aiming to decrease fossil fuel
EUR 0.2 million benefit BioBTX directly. combustion provide an enabling enviroment for bio-based
BTX. For example, EU support and infrastructure scaling-up
At present, BioBTX has achieved a total of EUR 3.5 million electric vehicle use reduces EU fossil fuel consumption and
finance committed from private and public shareholders and demand for refined oil products.
investors.
On the other hand, some regulations may result in barriers
MARKET INFORMATION to bio-based BTX. These, while modest, are mostly related
to increases in feedstock prices or decreases in feedstock
The company’s rather early stage and small scale production availability. The EU Renewable Energy Directive resulted in
is not significant compared to the fossil-based BTX aromatics a large increase in prices of feedstocks suitable for the ICCP
market. The company sees this changing with the completion process. Similarly, national subsidies for energy and heat
of the pilot plant and the subsequent sales of technology production from biomass sources, such as the SDE+ in the
Netherlands reduced feedstock availability.

ESTIMATED GLOBAL BTX SALES IN 2020 AND TECHNOLOGY INFORMATION

2025 (MILLION TONNES)
The ICCP technology encompasses an integrated two-step
10 (7%) pyrolysis which protects the catalyst from minerals often
10 (7%) abundant in biomass. This allows the conversion of low
grade biomass and end-of-life materials into BTX in a
Global BTX sales in 2020 commercially viable manner. The technology patent was
filed in 2014 and published in 2017.
Additional BTX sales in
2025 produced with ICCP Feedstock flexibility is high as the technology can use any
technology
feedstock with a water content below 30 %. The technol-
Additional BTX sales (fossil or ogy provides bio-based BTX aromatics that are drop-in
bio-based) in 2025 produced replacements for fossil-based equivalent products and
125 (86%) with other technologies can therefore be directly incorporated into existing product
streams and processes.
Source: Company estimates
69
 can be used for energy, reducing emissions further.
BioBTX’s technology has already proved itself at the labo- The ICCP technology can process many types of bio-based
ratory scale and in test line-ups, which puts the Technology and end-of-life materials as feedstocks. These range from
Readiness Levels (TRL) conservatively at TRL 5 (Technology crops grown for energy purposes to solid and liquid biomass
validated in relevant environment). The stand-alone pilot waste streams (e.g. used cooking oil) without a need for en-
plant that is to be operational in June 2018 will likely raise ergy-intensive pre-treatment. The technology’s high feedstock
this to TRL 7 (System prototype demonstration in operational flexibility allows for both availability and sustainability to be
environment). taken into account when producers choose potential feed-
stocks. This freedom in feedstock selection reduces chances
ENVIRONMENTAL IMPACT of competition with food production.

BioBTX’s ICCP process entails environmental benefits found Finally, as a complementary benefit, the ICCP technology is
across the BTX value chain, from feedstock to end-of-life also able to recycle plastic waste. For example, BTX-based
implications. The company has carried out an in-house Life plastic components from decommissioned machinery can be
Cycle Assessment. decomposed back into their original, BTX building blocks. This
further widens feedstock options.
According to this assessment, an estimated 3–4 tCO₂e are
saved for every tonne of bio-based BTX produced through
the ICCP process, when compared to fossil-based BTX. Future
plans include certification of this study by a third party. Adding
to the CO₂ savings are the avoided landfilling or incineration
emissions. Finally, the overall process generates heat which

THE WAY FORWARD

The outlook for the ICCP technology and the resulting bio-based BTX products is positive. The recent on-boarding
of private investors and the pilot plant under construction will provide further proof of concept. BioBTX is set to
significantly scale up once their pilot plant is operational in June 2018, and already plans for a larger demonstra-
tion plant in anticipation of growing demand. On the investor side, the successful on-boarding of an investment
fund is expected to act as a catalyst for other investors to follow. The produced bio-based BTX is price competitive
with fossil-based BTX at about EUR 670 per tonne, and when oil prices rebound the company stands to benefit.

The demand for BTX is strongly linked to consumer demand for plastics, their primary end-use. Worldwide, the
current production of BTX is over 100 million tonnes/year, and estimated to increase by over 4 million tonnes
each year. This expected demand growth will require investments in new production facilities, and diversification
of sources beyond fossil fuel ones. Compounding demand are megatrends such as the electrification of trans-
port in the EU, which will result in reduced oil refining activities over time.

In the mid-term future, the company expects to license its ICCP technology to cover about half of the current
BTX demand growth by deploying its technology in 2 new full-scale plants each year. In the longer-term, their
aim is to replace or adapt fossil-based BTX production processes to ICCP in existing facilities. BioBTX’s choice of
technology licensing and engineering services as a business model will allow for a fast growth in market pres-
ence, while continuing to operate as a lean organisation. It also allows for a diversification of potential customer
types, ranging from chemical companies to feedstock suppliers, brand owners and engineering companies build-
ing chemical plants.

This factsheet has been compiled based on information as of February 2018.

70
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ABSTRACT
The bio-based sector is amongst the most thriving sectors in the European bioeconomy. Industry
players in this sector use biological resources (including residues and waste) to make innovative
greener value added products. This nascent sector is somehow still small compared to more
traditional ones but it is undergoing rapid developments. Developing and commercialising in-
novative bio-based products – would they be new product types or aim to replace fossil-based
equivalents - demand pursued Research & Innovation efforts and is influenced by a certain
number of critical factors such as access to finance, market developments (including oil prices),
feedstock availability or the regulatory framework (including climate action). To progress from
the initial concept to a commercial product is thus a journey with many steps and challenges. The
aim of this study report is to analyse this journey – which was successful – for 15 EU innovative
bio-based products. These 15 success stories deliver on at least one of three following success
criteria: profitability, market entry or mobilisation of critical external finance. The 15 success
stories span over nine EU Member States, and cover a wide range of products and technologies,
most of which have been on the market for only a few years. Two-fifths of these products were
developed by large companies, an equal amount by SMEs, and one fifth by micro-enterprises.
In two-thirds of the companies, bio-based activities are at the core of their business. Each
success story is presented within the report in a factsheet, which provides detailed information
about it as well as insights on its drivers of success and on how it responded to risks it faced.

Studies and reports