Renewable Matter # 1 / Next Europe

Stages of Change

by Gianni Silvestrini

While fossil fuels for energy production have been used for the past 250 years, their utilization to generate new materials and a plethora of plastics dates back to no more than a century ago.

However, after a rapid growth, in the next decades the employment of hydrocarbons will probably slow down and fall, mainly due to the constraints brought about by climate change.

In some fields, their central role is already deteriorating. As for electricity generation, in many countries renewable sources are rapidly expanding. Their potential is colossal, and they are to meet humankind’s electricity demand in an efficient energy use scenario. 

As regards “renewable matter” – the biomaterials that have a market thanks to their characteristics and their environmental added value – the situation is not quite the same. Their current production is still less than 1% compared to that of traditional chemistry. In the long run, their role could change dramatically, albeit not along the same lines as the renewables, due to the need for the biochemical sector to share its soils with food, energy and raw material production. Today, only 0.03% of the planet’s total arable land is used for bioplastics, so in real terms this sector’s evolution margin is substantial. So, to give you some figures, during the second half of the century, 0.6% of agricultural land could meet a quarter of plastic materials’ demand.

Biomaterials can guarantee better environmental performance compared to industrial chemistry’s products. Well-managed supply chains help create a closed-cycle production and activate virtuous synergies between the biological and industrial worlds. Moreover, production often entails lower emissions. Ultimately, their utilization enables an increase in the products’ added value and their disposal is assisted by biodegradability. 

Plastic-induced environmental damage has been estimated around US$ 75 billion per year by UNEP, one third ascribable to production and 17% to the 10-20 million tons of waste that are dumped in the oceans each year.

These are the characteristics that enable biomaterials to succeed, despite production costs being often higher compared to those of conventional chemistry. Besides, rapid innovation of the processes will lead to significant technological performance advancements and to a reduction in prices, which will result in better competitiveness. In this respect, a crucial element in the comparison with chemical products is represented by hydrocarbon prices.

So, it is interesting to notice, for example, how the dramatic price reduction of methane caused by shale gas on the US market is affecting the production of biopolymers. As a result, some processes such as that of bioethylene and biopropylene have become disadvantageous, so much so that important multinationals have stopped their billion dollars investment in Brazil. In the United States, shale gas success has effectively made ethylene’s production decidedly cheaper, starting from low-cost methane.

At the same time, there are other biopolymers that are at an advantage. Some products such as isobutylene and butadiene, derived from the production process of ethylene from oil, are now dwindling. They are intermediate products used for processing important products such as synthetic rubber and nylon. This is why in the United States some biopolymers are becoming economically appealing.

Let us now think about the evolution of biomaterials in the long term, in view of a prospective serious climate agreement. 

Consequently, in 10-20 years, a drastic depreciation of fossil fuel reserves might occur, the so called “carbon bubble”. So, if following an escalation in the planet’s warming, new strict objectives for climate-changing emission reduction should be set up, a high share of fossil reserves belonging to energy multinationals or to the producing countries might not be utilized.

How would this impact on hydrocarbons’ prices? 

In addition, what kind of repercussions might the limitations of their employment as energy source have as opposed to their use as raw materials?

It is an open question. On the one hand, given the considerable investments made in explorations and drilling, the petrochemical industry’s supply price might drop, facilitating new applications substituting metals (such as in the use of composite materials for car bodywork). 

On the other, the hydrocarbons’ use restriction would take place through the recognition of a high value to CO2, as much as 100 euro/t, thus favouring the processing of biomaterials with emissions far lower than those of petrolchemistry.