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High-Value Opportunities for Lignin: Ready for liftoff

Published: 7 May 2014

Executive Summary

Long considered a waste product of the pulping industry, lignin, a major component of biomass, is currently being used for low and medium-value applications (e.g. binding and dispersing agents), representing a market of USD 730 million. However, strong signals indicate that lignin could be set to address high-value opportunities as early as 2017, such as substituting phenol or as a component in polyurethane formulation. The development of public and private R&D projects in this field could make lignin-based phenolic monomers or carbon fibre a reality by 2020.

The industry is just beginning to scratch the surface of lignin’s potential: it could become the main renewable aromatic resource for the chemical industry in the future.

Catching this wave early could allow large industry players to hedge against the volatility of raw material prices while decreasing their environmental impact. With their support, the lignin industry could unlock opportunities in a shorter time-frame. Being the first mover on this market can assure technology leadership, strategic partnerships and a competitive edge.

The purpose of this Market Insight is to provide information on the potential of lignin. During our analysis work, we have identified key barriers and analysed different ways to address them. In particular, we explored four promising lignin applications.

What is lignin?

As the biochemical industry emerges1, it is bringing out new products and replacing existing oil-based ones. Bio-based chemicals are expected to grow significantly and increase their share to an estimated 9 per cent of all chemical production in 2020.2

The existing biofuel and bio-based chemical industries prefer to use feedstock with high sugar or starch content, such as corn, sugar cane and sugar beet. This represents the first generation bio-based industry.

So-called second generation feedstocks include wood, bagasse from sugarcane or sweet sorghum, corn stover and grasses. In contrast to first generation feedstocks, these have a slightly lower sugar content but, more critically, the sugars are more difficult to access as they are bound in cellulose and hemicellulose macromolecules. Therefore, they remain underused as feedstocks for biofuels and bio-based chemicals.

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10.3 billion tonnes of organic chemicals yearly produced by the chemical industry, Haveren et al., 2008
2The Future of Industrial Biorefineries, World Economic Forum, 2010

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