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Michael Saltzberg, CEO at Covationbio, discusses the transition towards a future of sustainable materials, including the current bottlenecks facing adoption, and their potential solutions.
Through the development of renewable biochemicals and biomaterials, Mike and his team are solving critical issues for industries as varied as packaging, cosmetics, apparel and carpeting, all facing the challenges of offering high performance choices to their downstream customers while making their supply chains more sustainable.
Where are we on the journey towards using more sustainable materials in the goods we use every day? Are we where we should be? Are the technologies we need to accelerate our progress available today? And if not, what’s missing?
“If we look at actual adoption rates today – for instance, the percentage of petro-based materials that have been replaced by biobased or recycled alternatives — we are clearly still at the very beginning of the journey. In contrast, if we look at the development status of these alternatives, we are a bit further along. Many viable choices with better environmental profiles now exist to replace traditional petro-based materials with acceptable or even superior technical performance. However, the sustainable materials industry is still struggling to reach scale and cost positions that make their economics competitive with existing materials.
When we say “more sustainable,” what we mean is materials that are made from renewable resources like plants instead of finite resources like oil; those that extend the usefulness and durability of end products; those that can be reused, recovered, and recycled at the end of their useful lives; and those that result in fewer emissions to the environment.
More sustainable materials address the root issues that cause existing materials to be unsustainable, and that help the industry move toward a circular model, that will not create waste and emissions.
I believe the single biggest barrier we need to overcome is the huge incumbency advantages that the petro-based supply chains enjoy, mainly because the external costs these materials cause, e.g., effects on climate change, are not built into the economics of their use. Consumer demand for products with less negative impact on the environment, and brands’ response to this demand, is helping to slowly tip the balance towards new sustainable materials, but CovationBio believes to truly accelerate this shift, government policy changes will be needed.”
How can key value chain players work together better to overcome the barriers to commercial acceptance of more sustainable new and drop-in materials?
“One of the biggest barriers to adoption of either new sustainable materials or more sustainable drop-in versions of existing materials is the stacking of extra cost/margin as products made with these new materials make their way through extended value chains. Certainly, the details of this situation vary case-by-case, but the basic idea is that at every step of the chain, each company demands a higher margin to use sustainable materials than the materials they traditionally use. This happens because converters have not optimised the cost of their manufacturing processes to use the new materials, which means that it costs them more to process the new materials, and/or the companies see an opportunity to increase their profit margins with a more sustainable offering.
One example can be seen in our Sorona® PTT business: the cost of the polymer is a small fraction of the final price of a garment purchased by a consumer. Thus, swapping out the incumbent material (e.g. PET) for Sorona® should result in a small cost increase at the garment level.
In reality, by the time the polymer has made its way through fiber spinners, fabric mills, dyeing houses, cut-and-sew operations, and finally the brands and retailers, that small extra cost to use a more sustainable material in a garment has typically ballooned into a much larger price differential at the finished product. To combat this effect, CovationBio and other material suppliers work with brands and converters throughout the value chain to reduce the additional cost and risk that converters see in their operations when using new materials. The likely next step will be the need for “radical transparency,” that is more trust and communication throughout the whole chain so all members of it can make a reasonable profit while driving accelerated use of sustainable materials without creating unnecessary additional cost.”
What changes do industry leaders need to make to their business models to further transform their value chains? What is the role of policy in helping to accelerate the transition to sustainable alternatives?
“There are many changes that need to be made. First, it would be beneficial if companies throughout the value chain became more specialised in and dedicated to the production and processing of sustainable materials. Today, companies like CovationBio are fully focused on providing new, more sustainable materials. However, many important technologies and capabilities for sustainable materials are owned by companies that today are mostly in the business of providing traditional petro-based materials. It can be difficult for the relevant businesses within those companies to compete with larger existing businesses for investment, due to the difference in the time for their ROI versus existing operations. This dynamic can slow their progress.
In the same way, most converters spend most of their time and effort processing traditional materials rather than more sustainable materials. The result is that they are not able to fully optimise their operations and marketing approaches to drive adoption of sustainable materials. Some converters could choose to become specialists in the use of biobased and/or recycled materials, and thus create a competitive advantage for their companies as the demand grows for sustainable alternatives. Finally, brands need to commit further to the adoption of products made with sustainable materials including substantial product development/design efforts and concrete purchasing support to the converters and materials suppliers in their supply chains.”
What do you see as the greatest opportunity for those applying new technology to sustainable/circular materials? Where do you see white space for innovation?
“From our perspective as a materials supplier, we are excited to see the technical innovation happening in synthetic biology and thermochemistry approaches to production of sustainable materials. Progress continues in the use of traditional sugar-based fermentation approaches similar to CovationBio’s process for making BioPDO and fermentation routes are being extended to other feedstocks like biogas. There is also a lot of great work going on to process waste biomass, post-industrial waste, and even municipal waste into valuable chemical blocks. In many cases, this is being done using innovative thermochemical catalytic approaches.
We think it will take innovation in all these areas—fermentation from traditional sugars, fermentation of gases and other non-traditional feedstocks, and thermochemical approaches—to find sustainable alternatives to the myriad of functional petro-materials that are used today.
The other obvious area for innovation lies with product designers. In addition to specifying more sustainable materials in their products, designers can reduce the amount of material that is needed to provide the desired functionality and design their products to be more durable and last longer. This requires a shift in mindset. Specifically, moving away from driving consumers to purchase more volume to now encouraging them to spend more on each purchase on fewer but higher quality, more durable items.”
You’ll be joining is for the summit in London in May. What topics on the agenda are you most looking forward to hearing, and are there any connections you’re looking to make from a networking perspective?
“It is energising to be working alongside many passionate industry leaders who understand that the only way we will continue to make an impact is if we all work together to deliver a suite of more sustainable materials at scale and at reasonable cost. I hope that through these discussions, we can drive better cooperation and transparency through our value chains to overcome some of the barriers mentioned above.
I also hope to engage with other materials suppliers, converters, and designers and product development people from brands to talk about how we can work together to increase the durability and useful life of products since this is so critical to making our economy more circular. An example that is important to our Sorona® business is to move away from “fast fashion” towards more timeless garments that can perform and look great for longer.”
Michael joins the summit as a keynote speaker, with a presentation: ‘Transitioning Towards a Future of Sustainable Materials Now’ on Day One.
View the full agenda and book your place to join us in London on May 16-17.