Resource Chemical emerges from stealth with a big answers to the What Do We do About Plastic Bottles question

December 12, 2021 | Helena Tavares Kennedy

The entire world is aligned and charging forward on plastics, if you only consider the first two letters. REcycle, REplace, REuse, REduce. In other words, no one agrees on anything except the need for change.

What’s been missing is the REsource option — changing the way we make plastics, instead of trying to live in a world without plastic’s wonderful barrier properties and in particular the clarity that see-through plastics give to consumers, able to see the product under the packaging.

The solutions are coming — on the PET side, Anellotech is making its final strides towards a first commercial. For FDCA, Avantium is even closer to its first commercial. Both offer a REnaissance, a REnewable approach to REsourcing plastics. In the case of Anellotech, everything you liked about PET and fossil-free. In the case of Avantium, some very attractive barrier properties that, especially for small bottles, offer new options.

Not long ago, a new upstart appeared on the FDCA side of the equation, with a process that’s even more energy efficient that, at first glance, Avantium, and that means a carbon advantage. It’s pretty brand spanking new, and the world needs all the technology and REsourced plastic it can find — so, Avantium investors, quaketh not in thy boots.

Still, this is an interesting technology and everyone should know something about it. It’s ReSource Chemical, which has spun out of a Stanford Lab and, via a Cyclotron Road residency, which is the Berkeley Lab home of the the Activate program, is starting to make some waves. They just picked up the first Khosla Ventures new investment in renewable biomaterials, I believe, in more than a decade.

Here’s what you need to know

Higher Performance, Carbon Negative Plastics.
Maybe For Less.
A new Company Punching Above its Weight.

Enter, the Villain

The villain is not plastics, or rather, plasticity. The villain is the fossil-base. Let’s give some props for the incredible performance that plastics have. They really do change the world, and if you notice in this age of climate sensitivity, people were reaching for plastics at every step during COVID to offer barrier protection against COVID, from wrapped masks to the plastics used in all the online deliveries that took place in the pandemic. BUT…a carbon footprint that’s unacceptable to the modern mind, caused by a supply chain dominated by fossil raw ingredients, an explosion of usage, the predictable landfill crisis. And now a new and cruel twist, the rapid increase of plastics in the ocean.

The PEF backstory

Readers familiar with the Avantium story and to some extent the DuPont FDME story will have some background. PEF is a clear plastic, it’s biobased, recyclable, compostable and biodegradable. So far, so good.

What makes it great is that not only does it form a great see-through barrier, it works very well with small-scale liquids. Ever notice that there are lots of 16 ounce plastic bottles, but no 4 ounce ones? That’s because the clear plastic bottle incumbent, PET, doesn’t perform so well at small scale. PEF does. Bottom line, ten times as good against oxygen and 3X better as a moisture barrier. Translating into less waste, more shelf life, less plastic.

The problem to solve: making the FDCA ingredient

So, PEF is great, and where does ReSource fit in. Well, to make PEF, you need FDCA, which is combined with the widely-available ethylene glycol or MEG to make PEF. Bottom line: ReSource makes low-cost FDCA.

The $100 billion market?

ReSource mentions a $100 billion market in plastics that the new technology could disrupt. Even if the opportunity is 10% of that and there are three technologies fighting to the death for market share, there’s room for a new company.

The ReSource edge

In a word, you can make FDCA from sugar in a couple of steps, or you can make it from furfural with high yield in fewer steps. ReSource is the latter — a striking furfural-to-FDCA technology. Lot of companies already make furfural from biomass, Quaker Oats has been making it for nearly a century now, it’s one of the original Monster Molecules of the bioeconomy.

Better than anything, Resource Chemical avers that it’s carbon-negative. That would be in the “and now for something completely different” department. Overall, say the founder, they’ve reduced the number of steps by 70 percent and the CAPEX by 80 percent, compared to making FDCA from sugar. Reasons? The absence of co-products, high yields and the use of abundant and cheap water as a solvent.

The Whoa, Nelly factor

One thing we’d note — this is a great technology for investors looking for early-stage opportunities with disruptive technologies that impact big markets with big problems. However, the development from great technology to great company is a very big step. ReSource is early-stage. We’ve seen some very good steps – excellent awards picked up for development — SBIR, ARPA-E, DOE for example. Support from TomKat. A successful seed round with a brand-name lead investor. And, in The Department of Worthy Advisors, worthy they are – Tom Boussie, late of Rennovia and Cyclotron Road, Jay Koubs, who’s worked on more early-stage companies than perhaps anybody, and Vince Murphy of the very promising EnginZyme which is a singularly interesting cell-free manufacturing process developer.

The Bottom Line

Here’s a new company punching way above its weight. It’s early days, the dependence of someone else’s furfural will probably not be a problem, but strategics will ask about it. For now, let’s summarize what’s the “Great, So Far” of this company.

Working on a Big Problem in a Big Market that is Obvious to Everyone, and for which there’s Obvious Value in the Solving.
Start with a Molecule Lots of people know how to make, Get to one that Everyone Wants and Few Know How, and do it with much lower CAPEX than anyone else.
Get Carbon-Negative with a Product that is Famously Not Carbon-Negative, at a time when everyone is going to need some offsets from the small Carbon Footprint of wind and solar in order to Reach Net Zero.
Avoid having to Aggregate Agricultural Residues for Industrial Processes until Later.
Bring forward a Molecule which is Higher Performance as well as a Defossilizer, and more Cheaply than the Other Folk can do it.
Get out of Stealth Early enough that the investment asks are still pretty small for Early-stage Investors, i.e. build a pilot rather than build a first commercial.