Bionaphtha, a co-product in biodiesel or sustainable aviation fuel production, is set to see a growing market in Europe and Asia, spurred by bioplastics demand and fuel blending mandates.
Similar to biofuels, bionaphtha is derived from bio-based feedstock instead of crude oil.
As more petrochemical players gear up to their long-term net-zero targets, bio-attributed polymers, with bionaphtha as one feedstock option, could bring to the table a viable roadmap in achieving decarbonization all along the value chain.
Bionaphtha is not made as a standalone product at any single plant, nor are there plans to build plants with the sole aim of producing bionaphtha.
In fact, bionaphtha is a side product of second-generation hydrotreated vegetable oil biofuel plants. The technology uses hydrogen as a feedstock to refine waste oil streams such as used cooking oil or animal fats. Such plants often produce biodiesel or sustainable aviation fuel as the main product or products.
Global biorefinery capacity has been expanding in recent years and is estimated to grow from 19 million mt/year as of 2023 to upward of about 50 million mt/year by 2030 in output including renewable diesel, jet fuels, bionaphtha and bioLPG, based on the delivery of committed projects, according to research by the Biofuels Research and Analytics team at S&P Global Commodity Insights.
Bioplastics as a major application
Bionaphtha is currently used for two major downstream applications -- fuel blending and bioplastics production -- in major markets such as Europe.
Although fuel blending is considered the sector with a bigger market share in Europe, market participants generally expect bioplastics demand to dominate.
Bionaphtha could be used as a drop-in feedstock in naphtha crackers, producing olefins and aromatics for bioplastics production.
Bioplastics produced this way are commonly specified as bio-attributed polymers in the market, distinguishing them from other bio-based polymers using plant fiber, corn starch or sugar as feedstocks.
The mass-balancing approach
A key concept in sustainable supply chains is the concept of Chain of Custody. CoC is used to record and validate a sustainable product's origin, handling and processes. A key approach is "mass balance".
The mass balance approach encapsulates the following idea: renewable material is mixed with fossil material in current infrastructure to produce chemicals with partial renewable content, saving on the need to build new infrastructure and helping to lower barriers of entry for interested parties.
This helps to lower otherwise prohibitive logistics costs if renewable content is managed separately physically.
Renewable content is tracked through a bookkeeping approach and audited by third parties such as the International Sustainability and Carbon Certification, allowing for traceability of the renewable product along the entire supply chain.
Chemical recycling versus bioplastics
In recent years, the global chemical industry has been investing in the value chain of bioplastics and chemically recycled polymers through a pyrolysis naphtha route, because both present a solution to complement the space that cannot be filled by mechanical recycling of used plastics. The two production streams of plastics are sometimes considered in tandem as viable alternatives to fossil-based counterparts.
Sources said the two naphtha substitutes carry different ambitions. Whereas chemical recycling would help close the loop of plastic production and recycle hard-to-recycle plastic waste back to virgin-like feedstocks via pyrolysis, bioplastics focus on reducing CO2 emissions.
"Bioplastics has better carbon footprint than pyrolysis-based polymers, but the latter has the recycled tags," a sustainable polymer producer source said.
Marketing appeal and niche industry needs
European market sources suggest that bio-based plastics usually carry a decent premium over conventional plastics. Nevertheless, consumer-oriented applications may still opt for bioplastics based on a sustainability angle.
One example is the European toy sector, which is heard producing with bioplastics rather than recycled plastics because of legislative concerns about material safety for small children.
In Asia, increased interest among brand-owner groups from South Korea and Japan such as cosmetic brands have generated some demand in the field.
The future for bio-chemicals
The bionaphtha market has seen some expansion in the past few years, helped by a demand pull and a supply push, despite some potential stagnation in 2023, with many petrochemical producers expecting negative margins.
Nevertheless, major players are still seen to be investing along the bio-chemicals chain.
Advocacy efforts can also be observed regarding carbon accounting for the petrochemical world, as well as efforts to better recognize bio-based plastics for their sustainability contribution.
A version of this article appeared in the Sept. 11-18 edition of Chemical Week.
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Platts, part of S&P Global Commodity Insights, launched bionaphtha assessments in Northwest Europe, effective Sept. 1, 2023. Learn more here .