IENICA REPORT: UK

Executive summary

The focus of this report is organisations engaged in research, development, growing, processing, production, and utilisation of materials derived from crops for industrial applications - defined as renewable raw materials.

Major market opportunities and potential applications fall into 4 main areas - chemicals, speciality chemicals, industrial fibres and industrial oils:

Chemicals: Polymers and Plastics, Dyes, Paints & Pigments, Pharmaceuticals

Speciality Chemicals: Adhesives, Agrochemicals, Personal Care Products, Soaps & Detergents, Specialised Organics

Industrial Fibres: Paper & Board, Composites, Textile Fibres, Bulk Fibres

Industrial Oils: Two Cycle Oils, Transmission Fluids, Lubricants

15 potential market priorities were ranked in an earlier report (3) according to a scoring of demand, cost of R&D, risk and benefits (to UK farming and UK balance of payments).

The UK view is that potential markets for renewable raw materials are significant and global. Surfactants have a worldwide potential of £7 billion and the European potential alone for biodegradable lubricants is in excess of £1 billion (refer to Tables, pages 13,14)

Usage of crop-derived materials for all the applications mentioned in point 2 is driven by a number of key factors: These include potential performance of the materials, their sustainability, "cost of use", politics, consumerism, the green movement and global climate change.

Manufacturing industry (see, for example, a paper by ICI, 21) recognises the benefits of crop-derived products as raw materials in that they are more sustainable, non toxic and biodegradable. Such materials must be competitively priced and be available in sufficient quantities to meet market needs in addition to meeting functional specifications.

Today the market is immature - industry lacks knowledge of and links to the supply chain and processes which can automatically utilise alternative crops cost effectively. Equally industry needs to understand environmental, regulatory and IPR considerations.

Global production of crop-derived materials for industrial use is estimated to be in the region of 51 million tonnes, valued at £20 billion today (refer to Table, Appendix 2). Of this, UK production represents a modest 360,000 tonnes. Actual penetration of the global potential is however minimal.

In reality, crop-derived products hold little short term financial promise in bulk production today, but speciality chemicals "tell a different story".

Environmental and consumer considerations, as well as cost drivers, are focusing increasing attention on crop derived products as sources of sustainable raw materials, by an increasingly diverse range, scale, size and spectrum of organisations. This trend will continue to drive the development and increased utilisation of such materials in the future.

Given this trend it is anticipated that the global market will grow from 51 to 71 million tonnes, valued at £28 billion by 2003: a growth of 39% (refer to Table, Appendix 3).

The first detailed reviews of UK’s industrial crops arena were undertaken by ADAS (3) and POST (5), in 1994 and 1995, respectively. The latter contains a comprehensive analysis of environmental and economic factors, which is supplemented by more recent information in this Report (for example, concerns about damage to SSSIs) and within Nix’s Pocketbook (28), published annually. A combination of life-cycle assessment (LCA) and cost-benefit analysis (CBA) has been applied to several case-study products (44, 46), but there is a continuing need for further research in this area.

A strength of UK is the diverse science base, with:

wide-ranging expertise underpinning all the major market opportunities

academic-academic and academic-industry linkage through various Government-funded initiatives (funding mechanisms are listed in a MAFF document, (62)

skills ranging from basic agronomy through to economic and life-cycle assessment

an extensive research programme in oils, fibres, starches and speciality chemicals (Appendix 9)

The extensive bibliography of events and publications in the period since 1994 demonstrates that UK is developing a key strength in "technology interaction" i.e. a two-way dialogue between industry and the science base.

In the period 1995-1998, MAFF and HGCA have commissioned major reviews of industrial markets in the following areas:

UK-produced Oilseeds

UK-Grown Crop Polysaccharides

Oilseed Rapemeal

Fibre from UK-Grown Crops

Essential Oils

A planned series of workshops and seminars focussing on key market areas have been held recently within UK, alongside ACTIN’s own ‘in-house’ events, for example (a more extensive listing is included in the Bibliography):

Surfactants (LINK/BACS/ACTIN/RSC)

Speciality Chemicals (LINK)

Paints & Coatings (CTVO-net)

The importance of crop-derived feedstocks to UK industry has been reinforced by Chemical Industries Association, the Foresight Panel (Agriculture, Natural Resources and Environment) and Royal Society of Chemistry, Speciality Chemicals Sector:

This area was specifically highlighted as a, perhaps the, major long-term opportunity for the chemical industry, in the 1995 CIA report for Foresight, "Chemical Industry Research Priorities"

"Crops for Industry" will feature as a key component in one of only ten Sectoral Panels for the next round of Foresight (Foresight 2000, beginning in April 1999).

There are particular concerns within UK about commercial confidentiality, genetically-modified crops and the impact of the Agenda 2000 reforms:

Although there are significant market opportunities for oils, fibres and carbohydrates, the markets for some specialist crops are limited and could easily be over-worked

A range of new measures designed to monitor, control and debate the commercial introduction of GM crops into the UK have been announced by the Government and, for the foreseeable future will be restricted to farmscale plantings on a strictly limited basis

UK industry groups - including NFU, ACTIN, SCOPA and HGCA - have formed the "UK Industrial Crops Action Group" calling for an EU policy specifically designed to encourage the growing of industrial crops within the Agenda 2000 proposals

At the invitation of MAFF, representatives from the industry met to discuss the future of the non-food and energy crop sectors – see Appendix 1 for a list of the issues raised.

In terms of the current UK market, analysis confirms a total of circa. 1400 organisations who are today interested/involved in alternative crop development/utilisation. These embrace the complete spectrum of users, from academia to industrial applications. Commercial organisations range from ‘boutiques’ to major internationals - including such companies as BP, Cargill, ICI, Amylum, National Starch, Courtaulds, DuPont, British Sugar, Monsanto and Zeneca – and amount to circa. 50% of the total.

Despite these market trends, the number of UK organisations involved in alternative crops is not forecast to grow significantly - requirements for primary processing, information/ data, contacts and points of reference related to such materials will however increase significantly.

Market structure characteristics (the industrial crop sector as a whole is immature) and industry requirements (the need to see a return on any investment) combine to create opportunities for organisations which:

raise the profile and increase awareness of alternative crops

can accelerate acceptance, knowledge transfer, applications, utilisation

undertake this more cost effectively and quicker than companies engaged in this sector, for whom these opportunities are currently peripheral to their mainstream activities

UK industry has been proactive in the establishment of such an independent national agency, ACTIN, to address market opportunities, supply chain issues, barriers to progress and networking. The ACTIN staff and Sponsors now provide a coherent central source of information, supplemented by the ACTIN database and wider ‘databank’, a Special Interest Group - ACTIN²⁰²⁰ - now over 110 strong, and links to EU-level initiatives.

Success for such organisations will revolve around their ability to develop, maintain and facilitate:

centres of 'knowledge and excellence'

provision of comprehensive information across the full spectrum of alternative crops which is current and accurate (technical, commercial and regulatory)

establishment of an 'environment' which encourages focus on alternative crops, their applications and utilisation through networking and other forms of communication and, which can act as the voice of the industry at a European level, but providing a global perspective.