Avantium’s advance and the Laws of Corporate Thermodynamics

Avantium advises that their new FDCA plant (based on YXY technology) is 70 percent complete, on track for opening next year. So, t’s time to revisit the progress of this remarkable company and Avantium’s long journey through what some call the Valley of Death but which might be better described as the Universe of Expanding Major Company Space, within which Intellectual Heat Death is occurring. With that, let’s begin with the Three Laws of Big Company Thermodynamics. They are:

First Law. The total risk in a system remains constant, you can only minimize your own risk by getting someone else to take it.
Second Law. Blame goes downhill; it can never pass from a lower corporate level to a higher; guys in the middle get blamed for failure.
Third Law. Unhappy and unhealthy levels of disorder and chaos in a corporate system approach their lowest possible level when there is absolutely nothing new going on.

Avantium’ s FDCA story

So, back to Avantium, which is a small company that is bringing forward the FDCA molecule to up-end the plastics market.  From FDCA is produced PEF, and PEF is the first real competitor that has ever come along to the clear plastic bottle made from petroleum-based PET plastic.

It’s also a challenge to the idea that the biobased industry needs to pursue drop-in replacement chemicals for the chemicals industry.

Which reminds me of the Zeroth Law of Corporate Thermodynamics:

Zeroth Law. If you make a molecule that has zero difference from other guys, and same market for zero discount to the commodity price, your sales will be zero unless you are using raw materials with a carbon intensity approaching or less than zero.

Avantium has I think these days, in the chemicals & materials pace, become the supreme student of the Laws, so I salute them. They have:

1. Pursued novel molecules. PEF is something new. At the same time, avoided the problem of chasing Zero Volume markets. Plastics are huge. So, Zeroth Law, Check!
2. Avoiding, these days, suffocating tie-ups with major companies. Consortia memberships are fine, offtakes are very welcome, investment is thankfully accepted, JVs are off the table. First Law, Second Law, Third Law, check!

PEF checks off do’s and avoids don’t-dos in three interesting ways

One. PEF is a clear plastic that substitutes for PET plastic made from petroleum and which dominates the clear plastic bottle market — a market that is really suffering on a variety of sustainability front. So, not a drop-in molecule, but a drop-in market. Check.

Two. PEF has superior barrier properties, especially when the bottles get small. So, spoilage comes later and if you’ve ever noticed, no one makes really small PET plastic bottles, small beverage servings are still generally from cans. So, added-value to that drop-in market. Check.

Three. PEF is made from FDCA and ethylene glycol (MEG), both of which can be made from sugar, and you actually use the oxygen in the sugar in the fermentation. With PET you start with a hydrocarbon (paraxylene) and you end up with a molecule that is one-third oxygen. With PEF, you start with 53 percent oxygen and end up with 43 percent. Much more efficient. 

All that — it’s efficiency argument. The infrastructure argument is still out there, there’s the fear of new molecules, the fear of reductive chemistry, the high cost of sugar So, there’s room in the market to make paraxylene from waste biomass. According to the Zeroth Law. 

Stay small, go big with other people’s money

You can be amazing, you can be big, you can’t be both unless you are Steve Jobs, and nobody is.

Jim Koch, the founder of Sam Adams beer, once remarked to me that he thought that the very best companies were the ones that found ways to stay small, and think small. This goes back a few years, but I remember he was distinctively more proud of the Sam Adams table tent promotions than he was of their television advertising. He said that they were effective, but more than that they reflected a bond between the bar and the beer — the bar owner was championing the little guy when he put the table tents out, and that meant that people were “for you”, they wanted to help the underdog, they were aware of you, they thought about how you were adding value, and they recommended you to their own customers.

I doubt that any of these exact thoughts are the reason that Avantium CEO Tom van Aken was able to share with me that, based on the 14 offtake agreements, the first small commercial (5000 ton) plant can run at full capacity, or that Origin Materials has licensed the YXY technology with a goal to produce FDCA from Origin’s CMF derivatives at a 100,000 ton scale. But deep engagement can make a tribe out of a customer base, a cause rather than a commodity, a value instead of a price. Support matters.

A word in praise of drop-ins

I’d hate to leave you with the ideas that drop-ins are a fail. Rather, not all successes are drop ins, not all drop-ins are successes.

The world does need drop-in fuels, because of the massive infrastructure investment in existing cars, trucks, planes, ships, pipelines and refineries, and the low-carbon incentives are there. It’s been a successful set of programs. Ethanol, biodiesel. RNG, renewable diesel have come along brilliantly. SAF’s a comer.

For chemicals, the outlook is different. Infrastructure is less important, volumes are smaller, low carbon incentives are hard to find. Accordingly, the carbon market is voluntary and is popular primarily with product makers who have more value in the brand than in the material and where product volumes are small. 

So, companies like Patagonia, sports equipment manufacturers, fashion designers have been the backbone of demand. The volumes are small. With the major commodity molecules, there have been lots of pilots, consortiums, goals, Tons instead of gigatons. 

So, what about drop-ins? Tom van Aken has always found, in his polite way, to suggest that trying to make drop-ins for the chemical market, is illogical. He’s told me for years that, starting from different raw materials, look for different outcomes.

But people are stubborn. He’s regeretted to me the loyalty to polyolefins, what Anatole France might have described as un desire longue, the ancient desire to start with a hydrocarbon and add functionality. Yet, biobased doesn’t need oxygen, it needs catalysts.

The story of PGLA

The newest material that I’d like to say a word about is pretty newsy around the industry these days. Avantium has agreed to partner with Asia’s SCG Chemicals Public Company Limited to develop CO2-based polymers and to scale-up to a pilot plant with an indicative capacity of 10 tonnes per annum.

The technology: Yes, it’s Volta technology, and PLGA is the target

Now, a word about Volta, and no, it’s not the whirling, society-shocking dance sensation of the mid-16th century, during which the male partner would use his thigh against the partner’s bottom to throw her high into the air. Scandalous stuff back then, riveting, with leaps and jumps to electrify a bored Tudor assemblage into high-energy rowdies.

Not a bad metaphor for Volta’s achievements, which uses electrochemistry to convert CO2 to high-value products and chemical building blocks, up the value curve with an energy-laden thigh lifting CO2’s thermodynamic bottom. By combining glycolic acid with lactic acid, Avantium can produce polylactic-co-glycolic acid (PLGA), 

PLGA is a rarely-discussed molecule except in medical circles where it is used with enthusiasms in the implant business, for example. It’s a carbon-negative polymer with valuable characteristics: it has an excellent barrier against oxygen and moisture, has good mechanical properties, is recyclable and is both home compostable and marine degradable. 

The key here is not to create a new path to the old market, that would violate the Zeroth Law. It’s to use this established small-market molecule for new applications in bigger markets.

Think of a Starbucks paper cup. They coat those cups with polyethylene as a liquid barrier. Neither is is sustainable nor biodegradable and it makes the cup hard to recycle.

Enter PLGA. Coat the cup in it, excellent barrier properties, later it will degrade into lactic and glycolic acids, then into into carbon dioxide and water, which plants use to make new sugars, more PLGA, and so on and so on. So, circular.

The PLGA backstory

Since early 2023, Avantium and SCGC have been working together to further evaluate PLGA. To this end, Avantium has produced samples of different PLGAs, which have been evaluated at SCGC’s Norner AS facility. The two parties have now agreed to take the next step in their cooperation and establish a Joint Development Agreement. Under this agreement, Avantium and SCGC intend to further evaluate PLGA in order to subsequently scale up production of glycolic acid monomer and PLGA polyester in the next two years to a pilot plant.

And, as Tom van Aken explained to me, the benefit of being used in the medical field is that all regulatory parts are already done, all over the world. Even though Avantium’s interest is in broadening the demand into packaging — paper coating and film applications, a lot of the regulatory work is done. After all, we’re talking implants, that’s regulated carefully. 

So Avantium can work less about regulatory approval and more about tuning the product for marine degradability.

Where’s the Pilot?

Well, I can’t say for sure where exactly it will be. Have a feeling that any manufacturing at scale is likely to head back to Asia. But the pilot probably ought to be closer to the Voltarians whose process goes under the Due Diligence microscope — and that says to me, in the absence of any rock-hard evidence, that the early work will be close to Avantium in the Netherlands. Chalk another victory for Holland, then, and Avantium too. And SCG’s coming out of it looking pretty snappy too, one might add. 

The Bottom Line

PLGA – CO2 to polymers? That’s the carbon we need from the carbon we have —± so, all good. We’ll await the completion of the YXY plant and more advances on the PLGA pilot — but certainly,, Avantium’s mastered the Laws of Corporate Thermodynamics and is on a bit of tear. Good to see.