Increasing environmental awareness on the part of product manufacturers and the desire to reduce dependency on oil were the leading drivers behind the US$2.4 bln global market for biorenewable chemicals (BRC) in 2010. This steadily growing market has experienced a compounded annual growth rate (CAGR) of 14.8%, a growth trend that is going to increase as the world resumes a more normal production pace and new bio-based chemicals such as bioethylene come to market, as per SBI Energy. By 2015, the BRC market will be worth US$6.8 bln, a CAGR of 22.8% between 2010 and 2015. The largest region for BRC sales continues to be the U.S., which captured 21.6% of the market in 2009. The platform biorenewable chemicals (PBC) glycerin and lactic acid make up the bulk of biorenewable chemicals being sold in 2010, accounting for 79.2% of the market. There is a large range in market maturity for PBCs, ranging from mature markets such as lactic acid to nascent markets for chemicals such as succinic acid. Compared to the platform chemicals market, the intermediate biorenewable chemicals (IBC) market is much more nascent, particularly in relation to its potential. In 2010, IBCs accounted for US$574.9 mln of the BRC market; however this will grow to US$2.5 bln in 2015 and account for 37% of biorenewable chemical sales. The strongest growth will be for secondary chemicals such as polylactic acid (PLA), polyhydroxyalkanoate (PHA) and bioethylene that are used to manufacture bio-based plastics. The world market for succinic acid was approximately 66 mln lbs in 2009, of which less than 5% was produced from bio-based feedstock. Biorenewable succinic acid is just entering the marketplace, but by 2015, will account for two thirds of the estimated 200 mln lbs pa global succinic acid market. Approximately 30% of succinic acid is used for pigments and coatings, following by use in the plating industry and pharmaceuticals as the next largest markets. SBI Energy also expects to see environmentally friendly de-icers becoming an important part of the biosuccinic market. There are a number of other bio-based platform chemicals being actively researched that are near the pilot plant stage of development. SBI Energy expects to see 3-hydroxypropanoic acid (3-HPA) and acetic acid achieving production volumes greater than 45 mln lbs pa by 2015, primarily due to strong R&D programs from Cargill and WACKER respectively. Various companies (primarily in the U.S. and Europe) have moved past the laboratory to the pilot plant stage for isosorbide, isoprene, levulinic acid, and adipic acid. For these platform organic chemicals, production will continue to be a very limited affair, with volumes well below 20 mln lbs pa for the foreseeable future. Revenue of PHA worldwide reached an estimated US$107.8 mln in 2009, up 21% from US$89.1 mln in 2008, and is expected to reach US$150.3 mln for 2010. A steady increase in global production has balanced a decreasing trend in pricing for PHA, giving the PHA market a strong CAGR of 28.3% between 2006 and 2010. The largest barrier for PHA to gain market share is high manufacturing costs which are still much higher than other polymers. Manufacturing Trends: Three of the most widely used biomass feedstocks currently in use- price of corn, soybean oil and palm oil, have all stabilized since the turbulent prices experienced in 2008 and H1-2009. Average world soybean oil prices peaked at US$1283/ton in June 2008, with peaks occurring for palm oil and maize in March 2008. The recession then caused prices for all three food crops to drop precipitously, erasing a year’s worth of price gains in the last quarter of 2008. Since that time, prices have stabilized to summer of 2007 levels, with palm oil and soybean oil both selling at approximately US$725/ton and maize at US$147/ton. Production costs for biorenewable chemicals have held remarkably steady according to the U.S. Bureau of Labor Statistics production price index (PPI) for biorenewable chemical manufacturing, up only 3.4% in July 2010 as compared to December 2008. The results are similar to production price indexes for wet corn milling and soybean and other oilseed processing, which would be a significant part of any bio-based chemical manufacturer’s production costs. Steady growth in the two largest biorenewable chemical market segments, in addition to key regulatory and research developments, will spur the industry to a high of US$7 bln in 2015, more than twice the anticipated 2011 market value of almost US$3 bln. "The ever increasing price of oil is not the only driver pushing sales in the biorenewable chemicals market. In the near term, more support within regulations and legislations for funding and research and development is key to keeping the biorenewable chemicals market a lively and growing concern," says Robert Eckard, SBI Energy analyst. Pacing the industry will be the platform biorenewable chemicals segment, which will continue to be worth approximately two-thirds of the overall biorenewable market by climbing to more than US$4 bln in sales in 2015 and achieving a compound annual growth rate (CAGR) of 22% for the five year period. Slower to pick up in 2011, sales will continue to grow steadily from 2012 through 2015 for all major selling chemicals within the category. Glycerin and lactic acid will continue to be the main chemicals within the segment. Meanwhile, the intermediate biorenewable chemicals segment will see slightly stronger growth than the platform biorenewable chemicals segment, approaching US$3 bln in 2015 and showing a CAGR of 33% between 2011 and 2015. Bioethylene will be the largest intermediate biorenewable chemicals category by sales volume in 2015, although polyhydroxyalkanoates (PHA) will be the largest market by revenue due to its much higher production cost. SBI Energy estimates annual production of polylactide (PLA) will more than double between 2011 and 2015, while production of 1,3-propanediol (PDO) will triple, and PHA production will quadruple. The world biorenewable chemicals market was rocky between 2007 and 2009. After an absolutely amazing year in 2008 in which biorenewable chemicals grew an astonishing 72% to almost US$3 bln, market value dropped by 26% to US$2 bln. Global platform biorenewable chemicals were worth US$1.7 bln in 2009, down 27% from US$2.3 bln in 2008. This drop was entirely due to the bottom falling out of glycerin prices, heavily slashing overall revenue for the chemical despite a slight increase in production. However, 2010 proved to be a boon for the platform biorenewable chemicals segment, with total sales expected to reach an estimated US$1.8 bln by year’s end, up 11%. Despite the slump in 2009, the segment is managing a respectable CAGR of 12% between 2006 and 2010, primarily due to strong growth in the biorenewable lactic acid market. SBI Energy calculates that glycerin and lactic acid together will make up 96% of the platform biorenewable chemicals market in 2010. From US$232 mln in 2006, the intermediate biorenewable chemicals market grew to US$486 mln in 2008, a growth of 110% caused by unprecedented biobutanol sales. The report forecasts the intermediate biorenewable chemicals market to reach an estimated US$575 mln in 2010 as all major categories within the segment apart from biobutanol are expected to show growth. Polylactic acid and PHA are the key biorenewable chemicals in the segment, capturing 72% of the market in 2009. The U.S. and European Union were the top two biorenewable chemicals markets in 2009, capturing 22% and 19% of product sales respectively. Both regions were strong markets for almost all types of biorenewable chemicals, but it is the larger sales of polymers such as PLA and PHA in the U.S. keeping the country as the top biorenewable chemicals market. China continues to be a strong market for glycerin and lactic acid, but has yet to become a strong contender for other biorenewable chemicals segments such as bio-based polymers.