Raw material markets have shown a high degree of volatility in the recent years. Those who want to secure their future are shifting to side stream and waste feedstock wherever possible. The time to act is now when they are still available and abundant.
Turbulences have hit cotton, natural oils, glycerol, wood pellets and base metals – the list goes on and the phenomenon is global. Reasons are many, but the message is clear: this will be the new normal and we have to get prepared to raw material scarcity, complex cascading resource shifts and peculiar markets. As one feedstock gets scarce, prices skyrocket; industry shifts to another feedstock and new problems appear elsewhere.
Side stream and waste based business ecosystems require rather close physical links between production units, which means that partnerships should be established as early as possible. Nowadays, all production investments should have a close look to all possibilities for resource integration, aiming at high resource and material efficiency by closed loop production systems.
Best concepts maximize feedstock and supplier flexibility and downstream value addition as a whole. This leads to complex business ecosystems, building on heterogeneous feedstock, cascading process loops and links to many value chains and end use sectors. Although the whole ecosystem can be very complex, the individual process units may be standardized and represent established and proven technology. The complexity comes into picture when you aim to set it all up in a seamless manner.
You also need to be prepared to the ever-evolving compliance issues. Regulation on biomass sustainability, life cycle emissions and product safety may reshape the order of your production concept ranking. Some concepts have high compliance risks whereas some concepts are “safe” in all of the most probable scenarios. Careful analysis is needed to be able to pick up the best options.
Gaia has lately worked extensively in this area, helping clients to find sustainable concepts and solutions building on resource renewal. If you are planning a production investment and want to make sure, that your production plant and the entire business is well prepared for what the future resource markets and compliance demands may bring, we’re happy to help.
Tiina Pursula is business director of Gaia in the area of bio-based economy and sustainable use of natural resources.