IKEA joins advanced bioeconomy via Newlight deal
In Sweden, IKEA and Newlight Technologies have entered into a supply, collaboration, and technology license agreement that will supply IKEA with Newlight’s AirCarbon and enable IKEA to produce AirCarbon thermoplastic under a technology license.
Under the agreement, IKEA will purchase 50% of the material from Newlight’s 23,000 tonne per year plant in the United States, and subsequently IKEA has exclusive rights in the home furnishings industry to use Newlight’s carbon capture technology to convert bio-based greenhouse gases, first from biogas and later from carbon dioxide, into AirCarbon thermoplastics for use in its home furnishing products.
The technology
Newlight’s technology aims to transform the economics of PHA-based plastics, since low yields and high production costs have kept PHA from competing strongly with petroleum-based plastics.
The AirCarbon production process begins with concentrated methane-based carbon emissions that would otherwise become a part of the air, rather than fossil fuels that would otherwise remain underground, including air-bound methane emissions generated from farms, water treatment plants, landfills, and energy facilities.
Due to the high heat-trapping potential and superior thermodynamics of methane compared to carbon dioxide, the company’s primary focus is on sequestering methane-based greenhouse gases, which have over 20 times the heat-trapping impact of carbon dioxide (20 carbon dioxide capture plants would be needed to match the impact of 1 methane capture plant). Newlight is now using the company’s patented, award-winning greenhouse gas-to-plastic bioconversion technology to produce plastics from air and methane-containing greenhouse gas emissions generated at a farm.
The Partnership
IKEA’s long-term ambition is for all the plastic material used in their home furnishing products to be renewable or recycled material. The company is starting with their home furnishing plastic products, representing about 40% of the total plastic volume used in the IKEA range.
Both the companies will work together to identify and select the low-cost carbon sources and development of the technology to use a range of renewable substrates, with a long-term goal to develop capacities up to 453 KTA or 1 Billion pounds per year. The AirCarbon plants are initially intended to run using biogas from landfills as their sole carbon feedstock inputs, with expansion into other AirCarbon feedstocks over time, such as carbon dioxide.
The Newlight backstory
Over the course of 10 years of research and development, Newlight developed a biotechnological process to produce a material called AirCarbon: a family of high-performance polyhydroxyalkanoate (PHA)-based thermoplastic materials made from carbon emissions that are able to match the performance of a range of oil-based plastics while out-competing on price. Following commercialization in 2013, AirCarbon was named “Biomaterial of the Year” by the Nova Institute in 2013, “one of the 100 most technologically significant innovations of the year” by R&D Magazine in 2013, and 2014 “Innovation of the Year” by Popular Science.
Today, Newlight is working with over 60 Fortune 500 companies across 9 major market segments to launch AirCarbon products. Newlight’s focus today is expanding production capacity, and the company is currently working to expand to 50 million pounds per year capacity to meet demand.
Last year, Newlight signed a 20-year take-or-pay off-take agreement with Vinmar International for 1 billion pounds of AirCarbon PHA — the first cost-competitive, carbon-negative plastic that will be available at scale. Made, by the way, from greenhouse gas and thin air. You can see it in action here.
In 2014, Dell announced new sustainability initiatives including the introduction of carbon-negative packaging, through a partnership with Newlight Technologies, inventor and manufacturer of AirCarbon.
In May 2014, Sprint announced it would be one of the first companies to use AirCarbon, a new carbon-negative material made from greenhouse gas, instead of petroleum, to create plastic products. The material will be used in black and pink cell phone cases for the iPhone 5 and iPhone 5s sold online exclusively on Sprint.com. Sprint is the first telecommunications company in the world to launch a carbon-negative product using AirCarbon.
In April 2014, Newlight Technologies, a company changing the way we think about carbon emissions by using greenhouse gas as a high-value resource to produce cost-effective, carbon-negative AirCarbon plastics, has successfully completed a Series C financing round, raising $9.2 million from both new and existing investors, and bringing the company’s total capital raise to $18.8 million.
Reaction from the stakeholders
Minh Nguyen Hoang, Category Manager of Plastics at IKEA of Sweden says: “IKEA wants to contribute to a transformational change in the industry and to the development of plastics made from renewable sources. In line with our sustainability goals, we are moving away from virgin fossil based plastic materials in favor of plastic produced from renewable sources such as biogas, sugar wastes, and other renewable carbon sources. We believe our partnership with Newlight has the potential, once fully scaled, to be an important component of our multi-pronged effort to provide IKEA’s customers with affordable plastics products made from renewable resources.”
Added CEO of Newlight, Mark Herrema: “IKEA’s partnership with Newlight marks an important shift in how the world can make materials: from fossil fuels to captured carbon, from consumption to generation, from depletion to restoration. IKEA is a leader in the concept of harnessing its operations to improve the world, and we are proud to be a part of
that effort.”
The Bottom Line
This IKEA partnership is the real deal — big volumes from a product now produced and sold at commercial-scale. With IKEA’s 333 stores in 28 countries and 771 million visitors and 1.9 billion online — the volumes predicted in this news cycle are no laughing matter. Carbon negative indeed is turning into an everyday reality.
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