Feeding the Chemical Market

Ethanol serves as not only a liquid transportation fuel but also as a feedstock for biobased chemical production
By Erin Voegele | March 05, 2012

Although ethanol is generally associated with the transportation fuel market, it is in no way limited to use as a liquid fuel. It can also be converted—via known technology—into biobased chemicals, the most predominant being the common platform chemical ethylene. Once an ethanol molecule is processed into ethylene, it can be further refined into a plastic material known as polyethylene.

While using ethanol as a feedstock to produce ethylene is relatively new, the finished chemical itself is not new, as it has traditionally been derived from crude oil. In fact, recent statistics show it is the most produced organic compound in the world. Information published by the National Petrochemicals and Refiners Association notes that the colorless, flammable gas is one of the most important olefin chemicals on the market. It is used extensively in chemical synthesis and in the production of plastics.

Steam cracking is the common method used to create ethylene using a crude oil feedstock. The vast majority of ethylene that enters the market is produced using this method. Ethanol can also be used to produce the chemical via a process that involves dehydration and heating ethanol with concentrated sulfuric acid or a catalytic method. While a minority of ethylene entering the market is produced this way, several companies in South America are actively producing biobased ethylene using sugarcane ethanol as a feedstock, proving there is room in the market for a biobased alternative.

Ethylene can be used to produce a wide variety of other chemicals and materials, including polyethylene, a widely used plastic in packaging film and plastic bags. At least one company in Brazil, Braskem S.A., is working to bring sugarcane ethanol-derived biobased propylene to market. Propylene is considered the second most important platform chemical produce in the chemical industry, after ethylene. It is has also traditionally been derived from crude oil and is used to manufacture a wide variety of products, including fibers for clothing and carpeting.

Market Analysis
A  December Lux Research report on the biochemical industry addresses the growing biobased chemical market in South America. That report, titled “Global Bio-based Chemical Capacity Springs to Scale,” notes that by 2016, consolidation—both within the biomaterials and biochemical sector, and regionally—is expected to occur. According to the analysis, momentum derived from existing production capacity will influence regional specialization. In fact, Kalib Kersh, a Lux Research analyst and lead author of the report, says the South American biochemical market is primarily being driven by the abundance of ethanol and the conversion of ethanol into ethylene and polyethylene. The companies pursuing biobased ethylene production are large Brazilian chemical companies, he says. “They make huge quantities of petroleum-based ethylene and other chemicals. Now, they are sort of putting their feet in the water to establish this technology, and show brand owners that it is available.” Some brand owners have been using polyethylene from Braskem for more than a year already, Kersh continues. While petroleum-based ethylene is relatively inexpensive, the biobased alternative is currently more expensive. That said, Kersh notes that most brand owners are likely to prioritize biobased materials for particular projects. To date, he says Braskem has been known to receive hefty premiums for the renewable polyethylene it produces, demonstrating many brand owners are willing to pay a premium for biobased alternatives.

Statistics published by the Renewable Fuels Association show that Brazil produced 6.9 billion gallons of sugarcane ethanol in 2010. While final numbers for 2011 are expected to be down, Kersh says the production of ethanol-derived biochemicals should not be impacted, as those projects take in a small fraction of Brazil’s yearly ethanol production. He also notes that in the long term, however, limits to ethanol yield could impact the overall rate of growth of the biochemical sector in South America. Kersh points out growth in the ethanol-to-chemical space will probably come at a faster rate than some similar materials, such as polyhydroxyalkanoate (PHA), another form of biobased plastic.

Kersh also stresses that the future of ethanol-to-biochemical products is in no way expected to remain exclusively in South America and is expected to find a home in the U.S. “I think that there is going to be a general trend for conversion from ethanol,” he says. “So, wherever you have ethanol, I think that you are going to see ethylene and other chemicals being made from that.”

Considering the U.S. is the world’s largest ethanol producer, it only makes sense that ethanol-derived biochemical production will eventually find a home here. The U.S. Energy Information Administration estimates that U.S. ethanol plants produced nearly 13.3 billion gallons of ethanol in 2010, the vast majority of which was derived from corn. As more advanced and cellulosic biofuels enter the market, the production of ethanol-derived biochemicals could provide an economically feasible option for ethanol producers to increase market demand for ethanol while producing a higher-value commodity.

“I think it’s probably one of the big stories for 2012; that conventional ethanol producers in the United States are going to start wanting other options,” Kersh says. “And, I think that other options are going to be available to them increasingly.” While Kersh notes that there hasn’t been any real movement in the U.S. market yet, he thinks that it’s only a matter of time before we start hearing about biobased polyethylene being manufactured using U.S. produced ethanol.

Brazilian Projects
Ethanol-based biochemical production in Brazil has actually been a reality off and on for more than six decades when, according to Braskem’s renewable technologies director in Brazil, Antonio Morshbacker, his country was home to two very small biobased polyethylene production facilities. Of course, Morshbacker says, the chemical wasn’t considered “renewable” at that time, as there really wasn’t any petroleum-based alternative available in the Brazilian market. Furthermore, he notes that the local market for polyethylene was very small around 1950.

Industrial-scale sugarcane ethanol production began in Brazil in the mid-1970s, Morshbacker continues. The use of ethanol as a chemical feedstock, however, was essentially over by the late 1980s, in part, because Brazil’s petrochemical industry began to mature, plus government subsidies that encouraged the use of ethanol as a chemical feedstock were discontinued. Braskem actually operated a 100,000 ton ethanol-to-ethylene plant in the ′80s. According to Morshbacker, that ethylene was used as a component to produce a PVC that was 50 percent renewable.

When Braskem made the move to get back to the biopolymers space, it was decided to go with a familiar production method. The company’s original ethanol-to-ethylene plant had long since been disassembled, so in late 2006 a new pilot plant was built. Morshbacker says that the pilot plant not only enabled Braskem to improve the production technology and train employees, it also offered a method to produce a variety of biobased polymers to seed the market.

In September 2010, Braskem brought its commercial-scale green polyethylene plant online. The facility now has an annual production capacity of 200,000 tons. Morshbacker adds it doesn’t convert all of the biobased ethylene into polyethylene, but sells a small amount to Lanxess AG. The German company aims to convert biobased ethylene into ethylene propylene diene monomer (EPDM) on a commercial scale, according to a company spokesman. The rubber is conventionally produced using petroleum-derived ethylene and propylene. Lanxess’ existing EPDM plant in Triunfo, Brazil, currently produces 40,000 tons of traditional EPDM rubber per year. However, Braskem will soon supply biobased ethylene to the facility via pipeline.

Braskem is developing other biobased chemicals via sugarcane ethanol as well. According to Morshbacker, the company plans to begin production at an ethanol-to-propylene in 2013. The propylene will be further refined into polypropylene. The capacity of that plant will be at least 30,000 ton per year, says Morshbacker, but it could be more. The final production capacity will be determined after pilot operations are concluded, he says.

Dow Chemical Co. is one another company moving forward with plans to produce biochemicals using sugarcane-ethanol feedstock. According to Luis Cirihal, Dow’s business director of renewable alternatives and business development in Latin America, Dow is engaging in a joint venture project with Mitsui & Co. Ltd. to produce biobased polyethylene.

The project is vertically integrated, and includes the production of sugarcane ethanol, the conversion of ethanol into ethylene, as well as the conversion of ethylene into polyethylene. Cirihal says that sugarcane cultivation is underway, and engineering and equipment fabrication are advancing for the new sugarcane-to-ethanol plant in Santa Vitória, Minas Gerais. That facility is expected to begin operation in 2013, Cirihal says, noting that the first ethanol plant will have the capacity to produce 240,000 cubic meters (63.4 million gallons) of ethanol per year.

Once the entire project is online, Cirihal notes that sugarcane will be converted to ethanol, which will be converted to ethylene via a dehydration process. The ethylene will then be converted into polyethylene via a poly-merization process. “Once fully operational, this back-integrated platform will be enabled to produce high-performance biopolymers to serve the packaging and hygiene markets,” Cirihal says.

Regarding the decision to locate the new facility complex in Brazil, Cirihal notes that the country has one of the strongest economies in the world and is the world’s largest producer of ethanol from sugarcane. “There is [also] availability of agricultural land, agricultural and environmental aspects, logistics, good infrastructure and access to qualified labor,” he continues. “In addition, the flexible packaging market is increasing in Brazil and other Latin America countries.”

While interest in biobased polymers is increasing all around the world, Morshbacker cautions against overestimating the short-term reach of the product. While the production of biobased plastics is growing, he stresses biobased plastic is fully expected to remain a niche product for the next 20 years, when he estimates up to 20 percent of plastics could be biobased.

Author: Erin Voegle
Associate Editor, Biorefining Magazine
(701) 540-6986
evoegele@bbiinternational.com