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Good morning. Welcome to the April 2023 Round-Up! The goal here is to give you a chance to look back at what we talked about last month and to revisit a couple of topics worth some extra discussion.

But before we get into it, one quick question (you'll be redirected back to this post):

What we covered in April:

• Apr 3rd: Origin's hydrothermal carbon and another blue ammonia project

• Apr 7th ($): Synthetic graphite in Saudi Arabia and Exxon is buying CO2

• Apr 10th: Immobilizing with FabricNano and Carbios is licensing PET depolymerization

• Apr 12th ($): A new polycarbonate blend and Evonik's amalgam sale

• Apr 14th ($): Lanxess' sulfur additive for lubricants and Technip's interest in PHAs

• Apr 17th: SABIC's pasta packaging solution and New Iridium and Braskem's agreement

• Apr 19th: Origin's eucalyptus agreement and Danimer and Corbion's PHA-PLA blend

• Apr 21st ($): Evonik, Linde, and methionine and Sinopec and sulfuric acid regeneration

• Apr 24th: Eastman's car gasification project and Orion's new cogeneration unit

• Apr 26th: Visolis and Gingko's isoprene and SAF deal and Agilyx and plastic-to-BTX

• Apr 28th ($): Solvay's hydrogen peroxide for propylene oxide and Ineos and power purchase agreements

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The highlights...

1. Immobilization is heating up!

It's going to be interesting to watch the three enzymatic approaches develop over the coming years: cell-based fermentation processes, free enzyme processes, and immobilized enzyme processes. Last month we talked about immobilization for the first time when FabricNano announced a partnership with Sumitomo Chemical, but other immobilizers, like Cascade Biocatalyst and EnginZyme, are also entering the scene.

These companies, in one way or another, are looking to combine the best of both worlds: the excellent selectivity offered by enzymes, and the continuous operations offered by traditional chemical catalysis. It's not a new idea—Novozymes has been doing this for a while—it's just that Novozyme's biocatalysts are too expensive to scale for non-specialty applications.

At the end of the day, because of geometric scaling laws, big chemical plants are always going to be a more efficient use of capital. So if the target molecule(s) you want to produce have large end markets, you'll need to be operating a big chemical plant to compete with the existing big chemical plants, which is what cheap and effective immobilization is looking to do. On the other hand, if you are looking to produce chemicals for specialty applications, then operating a big plant isn't as critical because you can charge higher prices.

2. Plastic waste to BTX.

We talk about the molecular recycling of plastic waste a lot in this newsletter because a lot of companies are looking to enter the space. The process we talk about the most is the depolymerization of mixed plastic waste via pyrolysis, which produces an oil that is similar in composition to the naphtha we feed steam crackers. This makes pyrolysis rather attractive in the short term, because so long as someone is depolymerizing plastic, petrochemical players can use that pyrolysis oil as a blendstock and continue operating as they have in the past.

But are steam crackers really the best place for plastic-waste-derived-feedstock to be fed back into the value chain?

Last month we saw Agilyx and BioBTX propose an alternative: they want to convert that pyrolysis oil into a mixture of benzene, toluene, and xylene (BTX). This shouldn't sound crazy—refiners typically make BTX by the catalytic reforming of naphtha—the interesting thing to watch here is whether or not plastic-waste-based BTX is more similar to petroleum-derived BTX than plastic-waste-based pyrolysis oil is to naphtha. If the upper limit for blending is higher, then BTX might be a better entry point for circularity.

One thing to keep in mind here is that the petrochemicals one makes from BTX (PS, PET, polyurethanes) are different than the olefins and polyolefins (like HDPE, LDPE, LLDPE, and PP) that trace their roots back to steam crackers. And a 10% maximum blendstock in a steam cracker might correspond to a greater total global volume than a 30% maximum blendstock in BTX separation units.

3. Recycling car waste with Eastman.

Like Fulcrum's waste gasification facility ($), Eastman's automotive-shredder-residue (ASR) gasification project is looking to tackle the far end of the recycling spectrum, where separation costs are so high that the only reasonable means of salvaging the waste is to completely destroy it prior to reassembly. Within this framework you can think of gasification as the extreme version of pyrolysis.

So why does Fulcrum want to gasify everything we don't recycle to make fuels, while Eastman wants to gasify a very specific waste stream (ASR) that we also don't recycle?

One angle worth exploring has to do with existing customers: if Eastman can sell polymers that automotive companies use, then the ISCC-certified mass balance approach to recycling means that some fraction of Eastman's polymers can be sold as "made from automotive waste", which might enable a relatively more compelling sustainability story for automotive companies. Ultimately, automotive companies can take some agency for their waste, but nobody is going to take agency for the longtail of waste Fulcrum is dealing with. So higher value material end markets exist for ASR waste, and lower value fuel end markets exist for all the other waste.

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