A first in bioplastics, after years of investing and suffering losses

At Chemiepark Delfzijl, construction machines drive to a sand plain with a large steel frame on top. Silver-colored storage tanks surrounded by protective concrete walls hint at what this should be in a year’s time: a chemical factory. And one with a first: the world’s first commercial plant for bioplastic PEF (polyethylene furanoate).

The owner of the factory and inventor of the technology to make PEF on an industrial scale is the Dutch company Avantium. This chemical company, which now employs 200 people, was founded in 2000 as a spin-off from Shell to develop catalysis systems for accelerating chemical reactions. For the time being, this activity accounts for the largest part of Avantium’s turnover, 18 million euros.

PEF is a plant-based alternative to PET (polyethylene terephthalate). This plastic is known from the PET bottle, but is also found in many textiles, for example. PET, which accounts for about a quarter of global plastic production, is, like most other plastics, made from fossil raw materials, such as petroleum. That has many drawbacks. Fossil raw materials are not renewable and can pollute the environment when extracted. In addition, most plastics are difficult to recycle, break down into minuscule particles that pollute the environment (microplastics), and remain in nature for hundreds of years. In 2021, more than 90 percent of the world production of 390 million tons of plastics made from fossil raw materials.

The factory in Delfzijl will soon produce 5,000 tons of PEF per year, approximately 0.001 percent of the world’s current plastic production. Tom van Aken (52) calls it a “drop in the ocean”. He has been the CEO of Avantium since 2005, to which he switched in 2002. He came from the chemical company DSM, where he started in 1996 after studying chemistry.

Van Aken talks at an enormous wooden conference table, in a room above one of the two pilot plants in Delfzijl. A third pilot plant is located in Geleen in Limburg, while Amsterdam houses Avantium’s head office and research laboratories.

It is no coincidence that that table, like a handful of wall decorations in the hallway, is made of wood. Avantium develops technology to make plastic from vegetable raw materials – wood chips, grain. The crucial element in it is carbon. “Now that carbon comes from the ground, for example it is in petroleum. In the next 20 to 30 years, we have to replace that completely with carbon that is already above the ground.”

High fructose syrup

Avantium sees two sources for this: vegetable raw materials, or CO₂. Using the latter as a carbon source is only a goal for the time being. Avantium is conducting research into this in its Amsterdam laboratories. But the technology to make plastic from vegetable raw materials is already ready for commercial application. Avantium has had a patent on it since 2006, and opened its first pilot plant five years later, in Geleen, where the first PEF bottle was made. With an IPO in 2017, the company raised around 100 million euros for further growth. In 2021, it decided to build the commercial plant in Delfzijl, where PEF will be made from fructose syrup from grain.

To sell PEF, Avantium has been hauling around the world for years with a demonstration case full of sample bottles and textile threads. This shows potential customers: your product can be packaged and sold in it. In 2012, for example, two big names were brought in: Coca-Cola and the food company Danone. There are now fourteen customers of PEF from Delfzijl, including brewer Carlsberg and luxury brand Louis Vuitton. Avantium does not want to say how much of the 5,000 tons will go to these companies. According to the spokesperson, it is enough for a “valid business case”. Avantium, an outsider in ‘plasticland’, had to overcome many hurdles to get to this point. According to Van Aken, the petrochemical industry is “extremely conservative” and would “prefer not to enter until all risks have been eliminated”. A commercial production process for PEF did not yet exist: the development requires a great deal of expertise and millions of euros in investments. In 2016, Avantium therefore teamed up with BASF, the world’s largest chemical company. The knowledge and experience of the Germans helped to master technical risks.

Disagreements

But that collaboration ended at the end of 2018. A plan for a joint factory in Antwerp fell apart due to differences of opinion on how to market PEF. BASF wanted to do that on a large scale, with a production that would be much larger than that coming from Delfzijl next year. Avantium preferred to focus on a smaller-scale range of high-quality products. The Avantium share, still worth about 6 euros in July, fell sharply after this conflict. At the beginning of 2019 it was only worth about 2 euros. A year later, Avantium announced that it would build its own commercial factory in Delfzijl.

Getting PEF production up and running requires a great deal of trust and patience from investors. Until now, Avantium had suffered a loss every year, last year 30 million euros. This was partly because inflation made construction of the factory more expensive, partly because the company continues to invest in new technologies. No profit is expected in 2023 either.

Avantium does have a new source of income: the sale of licenses for the PEF technology. It closed the first deal at the beginning of this year with the American chemical company Origin Materials. It wants to produce 100,000 tons of PEF from wood chips every year in North America. Origin Materials has paid 12.5 million euros so far, and will soon pay again for every kilo of PEF it makes. Avantium expects to earn 10 to 20 million euros per year per license in the future, without having to incur high costs itself.

Discarded bottles

A PEF bottle now costs four to five times as much as a single-layer PET bottle. But PET bottles sometimes need a layer of nylon as an extra barrier. PEF is stronger than PET and allows less carbon dioxide and oxygen to pass through. Fruit juice in a PEF demonstration bottle, which the spokesman estimates has been in for about a year and a half, looks surprisingly fresh. At least it’s still orange.

According to Van Aken, PEF and PET would be equally expensive if produced on the same scale. And then the PEF production is still very young; in the mass production of PET, supreme efficiency has been achieved in recent decades.

According to Avantium, unlike PET and other ‘fossil’ plastics, PEF does not leave microplastics in the environment for centuries. Those minuscule pieces of plastic are released, for example, from discarded bottles and when washing nylon tights. But PEF may be much more biodegradable due to the vegetable raw materials, consumers should “especially not think” that they can carelessly throw away products. The degradation of PEF still takes a few years. Avantium prefers to see PEF recycled properly, only then is it truly circular.

For now, however, oil-based plastics will continue to dominate the market; the factory in Delfzijl is really a start. Over the roar of a shovel, Van Aken emphasizes once again that it took an “incredible amount of effort” to realize it. The following factories must become twenty and then a hundred times as large as those in Delfzijl.