The coverage of the IEA study continues with lots of opinions, which is a good sign as it means that the work is being taken seriously.
Today we want to back a headline from earlier in the week about Coca-Cola working with Gevo on renewable-based PET. This follows up well on one of the key discussions in our ESG and Climate report yesterday. If the traditional supply chain for polymers cannot meet the recycling needs of the consumer products and consumer staples companies, they will start to look for alternates, either packaging materials that are easier to recycle or materials that are made from a renewable resource, or biodegradable polymers (where they make sense). As we have noted previously, ethanol to ethylene is a well-known, but inefficient and expensive path unless fossil fuels are expensive (there was a drive to increase capacity during the oil highs of 2012-2014, but little progress was made).
Today, some of the more sophisticated fermentation processes produce other alcohols, which opens up more possibilities. The Gevo-Coca-Cola announcement is not too surprising – while Gevo is primarily focused on biofuels, one of its core building blocks is butanol. This C4 starting point allows for conversion to C8 and C12 based fuels and the C4 molecule can also be split – leading to a mix of higher hydrocarbons. The technology to take propane and butane to aromatics – 2x propane to benzene and 2x butane to xylenes - has been around for decades, and it looks like Gevo may have found a way to get from butanol to paraxylene – possibly using a similar path, but with a dehydration step. We have no idea how expensive the route is, but if we were one of the world’s largest consumers of PET, we would want to know more.
