The Lignin business – what is the way forward?

Henna Sundqvist-Andberg, VTT

Discussions on business potential of lignin have come and gone over several decades. Is this an everlasting cycle or is there something revolutionary in the air?

Lignosulphonates have established they position in the markets for decades ago in several applications, including construction, food and feed ingredients, and bitumen. So far other types of lignin haven’t been able to compete in production volumes with lignosulphonates. Kraft lignin from pulp production has been the second largest commercial lignin type but production volumes and markets have been modest. Lignin business hasn’t been lucrative enough for companies, even though there could be several viable applications for lignin (Fig. 1). However, weak signals from the industry have become stronger. Anticipation and expectations are once again in the air.

20150822 Lignin business blog price vs. volume

In 2014 Stora Enso announced a biorefinery investment in Sunila Pulp Mill Finland which focuses on extracting lignin, “the green gold of the Nordic forests”, from pine and spruce kraft pulping process by utilizing LignoBoost recovery technology. According to Stora Enso the initial markets are anticipated in the construction and automotive industries, as a renewable and sustainable alternative to the phenols used in plywood and wood-panelling glues and the polyols used in foams. Similar kind of progress is taking place in Canada. West Fraser Mills is investing in LignoForce System™ lignin recovery plant together with its partners (AB Plywood, Ecosynthetix, FPInnovations, Hinton Pulp, and Quesnel Plywood). The company is planning to use lignin as an adhesive (phenol formaldehyde resin) for its plywood and engineered wood products.

What makes the situation different this time? The bioeconomy boom is going strong with public funding available for R&D, piloting and investments. Innovation processes are advancing into piloting stage (e.g. carbon fibre (Innventia and Oak Ridge National Laboratories) and bioaromatics (Biorizon, Biochemtex)). Separation technologies for kraft lignin are commercially available (LignoForce, LignoBoost, SLRP). Environmental sustainability has become more and more important for both consumers and companies.

Even though the recent progress has been positive the picture is still not that rosy. The first step has been the production of green substitutes, like phenol formaldehyde resins. Additional commercially viable applications are needed, and the industry needs to evaluate whether lignin-based chemicals are for niche applications or if they could fully substitute petroleum-based products, and build the appropriate value network and even markets. Lignin-based chemical producers need to provide right product properties, ensure the consistent quality, guarantee the supply security, and balance with oil price development. It does become clear why it has taken a long time to reach this point, doesn’t it?

Could this still be a tipping point for lignin business? It might be that for kraft lignin, but for other types of lignin (organosolv, hydrolysis etc.) it is likely to take several more years until these truly take off. Cellulosic ethanol production and solvent pulping are further away but are steadily developing, with several pilots (CIMV, Renmatix Plantrose, Lignol Innovations’ Alcell process for solvent pulping) and start-ups are running (e.g. Abengoa, POET/DSM, GranBio for cellulosic ethanol production).

So what is the way forward for the lignin business? Two steps forward and one step back? The recent oil price development certainly might curb enthusiasm but there is no denying that there are opportunities today, if the circumstances are right: the raw material is cost competitive and available, quality of the lignin is right, performance is reliable and sustainability is taken into account, Fig. 2.

What could be the next step forward? It has been said that the best way to predict the future is to create it – so let’s continue developing new business from lignin in collaboration with the industry.

20150822 Lignin business success factors

Figure 2. Critical success factors for lignin business

20150822 Lignin business future markets

Fig. 3. An overview of prospective lignin markets.

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2 thoughts on “The Lignin business – what is the way forward?

  1. Pingback: About the Insight Refinery | The Insight Refinery

  2. jblackest Post author

    Thank you Henna for this post! I have a question that I don’t really find an answer to here or on the mentioned companies’ web sites: How is the value chain likely to look for these phenols? I guess the mills are going to focus on the extraction of quality lignin and not on the processing, though I see Stora Enso has a research centre focusing on finding market applications as well. It seems to me that this is a big (and typical) hurdle — the chemicals industry probably won’t collaborate much with the lignin producers until they can do so commercially at scale, and the feedstock owners will have a hard time making investments in the production before they have a good feel for the markets. As you know SP led the Swedish ‘Skogskemi’ project to try to bridge these industries, but I think in general the process is challenging. Perhaps new players can come in and broker these value chains with new business models?

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