Biobased Materials: Strengthening the US Green Economy

The U.S. must establish itself now as a center of excellence in biomaterial supply before it’s too late
By Atul Thakrar | August 22, 2011

Winds of change in consumer preference and awareness are driving companies to use materials and ingredients inside their products that are less toxic, more biodegradable and made from renewable resources. The demand for these features is driving manufacturers in the building, automotive, medical devices, packaging and toy industries to reach back to the chemical ingredient suppliers to provide solutions that deliver on both performance and a sustainable environmental profile. We are on the cusp of an extraordinary opportunity for the U.S. chemical industry, and the U.S. manufacturing industry as a whole. As a nation, we need to put our commitment to green chemistry into action and develop the infrastructure to catalyze the biobased materials industry.

Segetis, as well as others such as Natureworks, Elevance, Gevo, and Metabolix, are utilizing alternate raw materials streams to spur innovation in sustainable chemistry. Companies such as these reduce our nation’s dependence on fossil fuels by leveraging the vast acreage across America that is used to grow corn, grass, wood and other agricultural feedstocks. The primary harvest or waste streams (husks, cobs, wood pulp liquor) can be converted into biobased products that deliver superior performance, are safer for our children, better for our environment and benefit our economic viability as a nation. This infusion of new technologies is beginning to reenergize the U.S. chemical industry, which is home to some of the largest and best companies in the world, with some of the brightest and most qualified labor. The U.S. trade commission reported that in 2007, the biobased product industry employed nearly 6,000. Growth has been significant since then with jobs in the sector now in the tens of thousands. A 2009 USDA analysis predicts that with proper support, the industry could create or save tens of thousands more jobs in the future. This is a remarkable recovery from the 5.8 million jobs in the U.S. manufacturing industry and nearly 200,000 jobs in the U.S. chemical industry lost between 2000 and 2010.

The biomaterials era is an emerging industry. Starting something new and growing from a small base takes time and capital. The chemical industry in particular is capital intensive. Scale is enormous with many of the markets demanding billions of pounds. Building biomaterials volume fast and large enough is challenging. Financing this growth is the No. 1 challenge.

The biobased materials industry has seen that venture funds or private investment funds are available to spur innovation and build demonstration plants. However, fewer funding options exist to build the large-scale plants needed to put our industry on the map and realize the huge potential. Public markets are starting to become more active after the deep recession. Government funding opportunities currently available only for biofuels must be opened up to the broader biobased materials industry. Government funding serves a critical need to de-risk the first-of-its-kind capital investment. Manufacturing investment incentives would also deliver a huge boost to catalyze the bio industry. There are many other support mechanisms, but the point is that in order to realize this extraordinary opportunity, we need to do what it takes now to make sure we establish the U.S. as a center of excellence in biomaterial supply, before it’s too late. 

This is our chance. We know that dependence on oil is unsustainable in the long-term and the resources of the world are unevenly distributed. If we invest today in our biorefineries and the products they produce, we bring a bounty of benefits: we secure our future feedstocks for fuel and value-added chemicals; infuse growth needed in jobs and manufacturing output; make a commitment to environmental stewardship; and leave a legacy to our future generations.

So let’s take advantage of these winds of change and set our course to a winning solution that will strengthen the U.S. green economy.

Author: Atul Thakrar
President and CEO, Segetis
(763) 795-7200