The Need
Renewable raw materials are typically thought of as a source of replacement for fossil energy used as fuel. However, there is great potential to use biomass as a raw material to make many chemicals and plastics, further disconnecting our manufacturing economy from oil and natural gas. While oil and natural gas will continue to be used as feedstock for the petrochemical industry, most organic chemistry practiced today can be achieved using ethanol, seed oils and other biological sources. Take for example Dow’s project in Brazil to build a world-scale polyethylene plant using ethanol derived from sugar cane instead of petroleum. Consider that it will result in, say, a plastic milk jug that is chemically identical to a petroleum-derived jug, but which is born from an annually renewable and energy-rich crop.
Use of ethanol and other renewable feedstocks to make value-added products enhances the sustainability of renewables and can help to sustain domestic manufacturing by using alternative raw materials. While the conversion technology is relatively simple, there are a number of barriers to producing chemical and plastic products from biomass at scale. The most significant is the distortion caused by the ethanol fuel subsidy, which causes ethanol feedstock to compete unfavorably with ethanol as a fuel. There are several solutions to this problem.
Solutions
- Promote incentive parity with ethanol as a fuel.
- Support transitional imports of ethanol from Brazil when used as a non-fuel feedstock. Assure that the $0.54/gallon import tariff will not apply.
- Recognize the value of ethanol as a chemical feedstock substitute for oil and natural gas.
- Provide government R&D support to help improve yield and energy density of crops.
- Provide capital risk reduction for early adopters.
