Raw Materials Reality

"Raw material change: coal, oil, gas, biomass—Where does the future lie?" That was the theme of the 20th annual science workshop held by BASF in Ludwigshafen, Germany, late last month. It was attended by journalists from 12 countries and scientists from BASF and elsewhere.

Stefan Marcinowski, BASF board director responsible for R&D, explained that the workshops are an attempt to explore complex subjects in more detail and context than journalists normally can manage under tight time pressures.

But this year's topic of alternative raw materials took on an additional role, he added. It was an attempt to place development of new materials in a realistic light. "Reality," indeed, was a word that kept cropping up during the two-day event: What processes are realistic? What market development is practicable? What technology will be necessary to bring new materials into widespread use? How soon?

To a great extent, these questions reflect the chemical industry's reaction to what its managers see as the increasingly tight supply of traditional raw materials and the attendant price pressures on these traditional feedstocks.

In the near term, Marcinowski predicted, oil will be the main feedstock for the chemical industry. That will be true, he argued, even though "the chemical industry is the appendix" of the energy industry: Only 3% of the world's annual consumption of 10 billion metric tons of oil equivalent—oil, natural gas, and coal—is used as chemical feedstock. The remainder is used for heating, electricity, and transportation fuels.

Even so, spikes in the price of oil hit the chemical industry as hard as they do other users. The average price of naphtha has tripled in the past five years, Marcinowski pointed out, "putting pressure on us and many other companies in the chemical industry." BASF alone uses about 7 million metric tons per year of naphtha worldwide for its ethylene crackers.

For BASF, the response is research into new raw materials. For 2006 through 2008, the company has earmarked more than $1.1 billion in R&D spending on what it calls its five growth clusters: plant biotechnology, industrial biotechnology, raw material change, nanotechnology, and energy management. The first three of these clusters touch directly on alternative raw materials.

This is not to say that BASF plans to radically change how it makes chemicals. "From our viewpoint," Marcinowski said, "oil and gas will certainly remain dominant in the short term. In the medium term, coal in particular will gain importance." But coal, he cautioned, is not a "drop-in" chemical raw material. "You can't change a cracker from oil to coal overnight," he explained.

Longer term, renewable resources may offer intriguing environmental and economic benefits. "But what is limited is the available agricultural area," Marcinowski said. He cited statistics indicating that 30% of the world's arable land would be needed to grow sufficient crops to replace just 10% of oil demand by 2030. Diverting that amount of land from food cultivation would require difficult political and economic decisions.

Already, noted Stephan Freyer, a team leader in biotech chemical engineering in BASF's chemicals and research engineering unit, food pricing is becoming a problem as crops are diverted to industrial uses. He pointed out that the cost of raw sugar has more than doubled over the past four years, in large part due to rising sugar demand in Brazil for the production of fuel ethanol. And the price of corn has spiked since the beginning of this year, reflecting U.S. demand for corn-derived ethanol.

Many companies are exploring enzyme-based biorefining technology that makes fuels and chemical feedstocks from whole plants, rather than the edible, sugar-containing portions that are generally used to make ethanol today. Operation of a biorefinery "is not just a question of enzymes, it is a logistics problem, as well," Freyer said.

Producing chemicals from renewable raw materials, he added, requires a broad technology portfolio, chemical and biological catalysis expertise, chemical engineering know-how, and the development of value-added chains of products. In fact, Freyer observed, "there could be a lot more work done on chemical engineering for biomass, biorefineries, and so on in the universities."

In the realm of alternative fuels, ethanol and biodiesel are receiving the most attention and investment today. However, Stefan S. Keppeler, head of fuels services in the research body and powertrain unit of DaimlerChrysler, suggested that they are a first-generation technology, and probably only stop-gaps toward even more sustainable alternatives.

Bioethanol and biodiesel, he said, have a low potential "if you look at the acreage, as the processing of biodiesel and bioethanol use only part of the crop."

Keppeler sees greater potential for second-generation biofuels that could be made from a wider range of agricultural materials via biomass-to-liquids conversion processes. He notes that the Fischer-Tropsch technology that is now used to convert coal and natural gas to liquid fuels could be used to convert biomass as well.

Such fuels can be substituted for conventional gasoline and diesel fuels without major vehicle modifications, Keppeler said. And because biomass-to-liquids technology uses the entire plant, he pointed out, it can produce three times as much fuel per acre as current biodiesel technology. It thus offers the opportunity to eventually supply as much as 20% of European fuel demand.

He described the SunDiesel project that DaimlerChrysler has been involved with since 2002 to produce second-generation, Fischer-Tropsch-derived biofuels processed from agricultural straw, wood-processing waste, and forestry waste for diesel engines.

SunDiesel was formed in early 2002 by DaimlerChrysler and Choren Industries, a biofuels start-up based in Freiberg, Germany; Volkswagen joined the project later that year. In August 2005, Shell bought shares in Choren, and now it is optimizing the manufacturing process for SunDiesel in cooperation with Choren.

The venture has built a pilot plant in Freiberg with fuel capacity of 15,000 metric tons per year. A full-scale plant, in contrast, would have capacity of 1 million metric tons per year and would cost $500 million to $600 million, Keppeler conceded. Moreover, the logistics involved in transporting the agricultural matter needed to feed the plant would be quite challenging.

On the prospects for fuel cells as an energy source, meanwhile, Keppeler was reserved. He noted that the first fuel-cell vehicles will have a commercial launch in 2015. "It is a technically mature solution with economies of scale already, but we have to ask if it is affordable," he said. "It depends on how much a customer yearns for such a car. And the cost of producing hydrogen is still a question."

The workshop also discussed several alternative raw material projects at BASF. They are moving toward commercialization but clearly at a pace the company's researchers find frustratingly slow.

A project involving cellulose processing was detailed by Eric Uerdingen, who is working on the project in BASF's intermediates division. Cellulose is an attractive material, he pointed out: Yearly harvestable growth of cellulosic material is estimated at 40 billion metric tons, but of that, only about 200 million metric tons is used by industry, primarily for paper production. Chemically modified cellulose derivatives—fibers, esters, and ethers—account for only about 4 million metric tons, with fibers making up just over half of that.

The company's project with the University of Alabama to develop cellulose-dissolving ionic liquids aims to increase the industry's use of cellulose as a raw material. Working with Alabama chemistry professor Robin D. Rogers, BASF has developed a process by which ionic liquids—considered desirable because they are nonvolatile and nonflammable—extract cellulose from biomass with none of the environmentally unfriendly solvents such as carbon disulfide and auxiliaries currently used. The process could be used for fibers, Uerdingen said, or derivatives, such as esters.

BASF is planning a pilot plant for next year, he said, and eventually wants to scale up to an industrial process. "The major fiber producers could be interested in this," Uerdingen said. Even assuming successful commercial talks with possible customers, though, it would take a few years to get to an industrial plant, he acknowledged.

Arnold Schneller, head of biopolymers research within BASF's polymer research department, outlined the company's work on biopolymers. For the workshop, he focused on polyhydroxybutyrate (PHB), a semicrystalline polyester that he described as the only naturally occurring polymer suitable for thermoplastic processing above the melting temperature of 180 ^oC. The material can be made through fermentation by various bacteria in high yields, nearing 95%, he said, and can be used alone, in copolymers, or in blends.

But PHB's commercialization presents various challenges, Schneller pointed out.

One of the main challenges is that the product must find economy of scale in a huge market dominated by low-cost commodity polymers. For example, according to Schneller, total global consumption of polypropylene and polyethylene was approximately 70 million metric tons in 2004. He predicted that the first PHB plant to be built by BASF would have a capacity of merely 70,000 metric tons per year, but to date, no construction plans are on the agenda.

BASF is currently working with an institute in Leipzig, Germany, to develop the PHB technology and find applications for polymer blends. And the company has received a 50% subsidy from Germany's Agency for Renewable Resources to develop a process for PHB based on glycerin, a by-product of biodiesel manufacturing.

Schneller cautioned that progress on the project "is a matter of customer demand. In the future, these may be the preferred products. We are getting requests from customers that they want something based on renewable resources—not necessarily biodegradable, but using renewable resources," Schneller said. "They are willing to pay a premium for such products. However, we won't see results tomorrow, but in the future."