According to a study form Lux Research, investment and growth in bio-based material and chemical capacity continues to increase globally. Aggregating 229 sites from 217 companies that are planned, operating, or have been shuttered between 2005 and 2017 paints an interesting picture, whether considered by feedstock, product category or the geography where scale-up is strongest. Categorizing the products – 133 chemicals and classes like succinic acid and polyols – into seven main product categories (e.g., intermediate chemicals, polymers, and specialty chemicals) and 22 subcategories shines the light on the highest potential areas for producers and potential adopters:

Bio-based intermediate chemicals (e.g. adipic acid and lactic acid) is the biggest singular growth driver in the coming years, growing from 2.0 million metric tons (MT) to 4.9 million MT in 2017, while growth in first-generation facilities stalls. Adding further volume to the overall bio-based space, today’s 1.1 million MT bio-derived polymer capacity will grow at an 18% CAGR through 2017 as companies like Avantium build new sites, and production of bio-oil and its derivatives is set to grow from 1.0 million MT today to 1.8 million MT in 2017. Finally, specialty chemicals (e.g., farnesene) are set to boom at a 46% CAGR on a relatively low existing base between now and 2017. In contrast, the nascent bio-based advanced material space, comprised of products like bee silk, continues to have a negligible capacity through 2017.

As the bio-based industry matured, the pendulum moved from fuels to chemicals and companies like Solazyme, Elevance, and Amyris pushed back plans for entering the fuel market and instead focused on available chemical markets. Now that these companies are reaching commercial production volumes and are looking to set up strong downstream offtake markets, strategies are shifting even further away from fuels. As companies look to generate revenue, expect to see continued movement into existing and high-value specialty markets. A key to this on-going growth will be a continuation of the partnering behaviors already exemplified by key players in the industry. Years of collaboration and partnership have resulted in the first wave of bio-producers reaching scale and putting products on the markets. Larger patterns and trends continue to evolve, and a variety of partnership models – some focusing on strong upstream relationships and other focusing on downstream offtake – are showing success. LanzaTech, Agilyx, and Renmatix are key companies with an upstream, feedstock focus, while Genomatica, Solazyme, Gevo, Elevance, and Segetis are working on downstream business development.

Assembling the partnerships for feedstock, process and product in the right geographies will define the long term winners in this space. The masses rushing towards natural gas feedstocks are only enhancing the opportunities for thought leaders and strategic thinkers in higher carbon bio-based materials and chemicals who can position to win now as well as long after the natural gas frenzy is over.