Lignin derived chemicals present $242 bn market potential

Lignin, a component of lignocellulosic biomass and a common by-product stream from cellulosic conversion processes, has a potential market worth of $242 billion across 13 select products alone, but commercialisation of these lignin derived chemicals such as BTX (a mixture of benzene, toluene, and xylene) and cyclohexanol lags growing feedstock supplies, according to Lux Research.
 
Today, the commercial sale of lignin is limited. Even though the pulp and paper industry produces about 50 million metric tonnes (MT), most is burned for power with only 1 million MT reaching the chemicals market. However, the supply of lignin from other sources is set to grow. Growing production of fuels from lignocellulosic feedstocks alone is projected to process up to 2.9 million MT in 2017, creating huge opportunities for the creation of higher-value chemicals.
 
“Lignin is capable of producing a variety of straight chain, cyclic and aromatic chemicals, each with market sizes ranging from the tens of millions of dollars up to the hundred-billion-dollar range,” said Julia Allen, Lux Research Analyst and the lead author of the report titled, ‘Finding untapped value: converting lignin to higher value chemicals’.
 
She added, “But creating higher-value chemicals requires technology development to balance feedstock variability, lignin separation effects, depolymerisation, and product separation challenges, which still has significant work ahead.”
 
A predictive tool designed by Lux Research – based on historical invention-to-commercialisation pathways of major materials – found the lignin-to-chemical innovation cycle to lag that of polylactic acid (PLA) by 18 years. Consequently, the first lignin-derived chemical product may be expected to hit the market in 2021, following a significant patent inflection in 2018-19.
 
There are four major routes under development to convert lignin into smaller chemical constituents – thermal, chemical, metallic catalytic and biological. Of them, thermal depolymerisation, such as pyrolysis, is the most mature, though companies focus on fuels not chemicals. Purely chemical routes are limited in scale, while the metallic catalytic processes to higher-value chemicals have unresolved technical challenges despite being the industry leader in terms of scale, and biological routes lag in commercial development.
 
Ahead of a second patent inflection in 2018-2019 following the first in 2006-2007, opportunities abound for companies and research institutions to develop processes to convert lignin into higher-value chemicals whose markets can be in the billions of dollars. “As continued R&D accelerates, early-stage companies such as Annikki, Biome Bioplastics and Vertichem, as well as universities like the Universite de Sherbrooke and Tohoku Universities, are prime targets for collaboration,” said the Lux Research report.