Cellulose Nanomaterials: The Road to Commercialization

Opportunities and Recommendations for Researchers, Producers, and End Users

Presented by:

Jack MillerPrincipal Consultant,

Market-Intell LLCNovember 13, 2017

Agenda

• Types of cellulose “nano” materials

• State of the industry: capacity, commercial development highlights

• The road to commercialization

• Applications, potential volume, and forecasts

Agenda

Highlights from

• Nanocellulose Producers, Products, and Applications: A Guide for End Users

• Nanocellulose: The Road to Commercialization: End User Insights

Thank you

• TAPPI NANO End User Panel: 3M, Cabot, Ford, L'Oréal, Schlumberger and Hamdy Khalil, Emily Cranston

• Jo Anne Shatkin and Vireo Advisors for their contribution on EH&S

• Technical Advisors: Robert J Moon, World L-S Nieh, Hiroyuki Yano

Types of “nano” cellulose

Is it nano?

Is it cellulose?

Types of “nano” cellulose

• Cellulose nanofibrils (CNF) vs. Cellulose nanocrystals (CNC): quite different

• Microfibrillated cellulose: MFC• Cellulose filaments (CF)• Different forms of CNC • Different forms of CNF • Different forms of MFC• CNF vs MFC: how different are they?• And… MCC, CMC, etc.

What is nano?

• What is “nano”?

• Less than 100 nm in any one dimension…

What is nano?

• What is “nano”?

• 1 - 100 nm in at least one dimension…

• But…

• What percent of the material has to be nano before you can consider it “nano”?

• At what percent nano MUST you consider it nano?

• What if it is agglomerated?

What is nano?• In the U.S. the “EPA Nano rule” requires one-time reporting and recordkeeping when manufacturing,

importing, or processing nanoscale substances. A reportable chemical substance is: (1) solid at 25°C and standard atmospheric pressure; (2) has particles, aggregates, or agglomerates in the size range of 1–100 nm in at least one dimension (present at concentrations above 1% by weight); and (3) is manufactured to have “unique and novel” properties as a function of its size (meaning it has different properties than conventional material).

• In the EU, the Biocidal Products Regulation defines a nanomaterial as “a natural or manufactured active substance or non-active substance containing particles in an unbound state or as an aggregate or as an agglomerate and where, for 50% or more of the particles in the number size distribution, one or more external dimensions is in the size range of 1–100 nm.”

• Furthermore, the EU-recommended definition of a nanomaterial also states that when warranted by EHS concerns, the size distribution threshold of 50% or more may be replaced by a threshold between 1% and 50%.

Source: J Miller, Nanocellulose Producers, Products, and Applications: A Guide for End Users, TAPPI press, 2017; U.S. EPA Toxic Substances Control Act (TSCA) [FRN 2017-00052], https://www.gpo.gov/fdsys/search/pagedetails.action?granuleId=2017-00052&packageId=FR-2017-01-12; Hansen, S.F., Review and Discussion of Recent Regulatory Developments in Europe When it Comes to Nanomaterials, NanoWorld Conference, Boston, April, 2017; https://www.gpo.gov/fdsys/pkg/FR-2017-01-12/html/2017-00052.htm

What is nano?

• What is “nano”?

• 1 - 100 nm in at least one dimension…

• But…

• What percent of the material has to be nano before you can consider it “nano”?

• At what percent nano MUST you consider it nano?

• What if it is agglomerated?

• Are MFC and CNF the same thing?

• TAPPI, FPL, ISO others developing definitions and standards.

CNF and MFC Comparative Specifications(particle diameter in nanometers)

Source: J. Miller, Nanocellulose Producers, Products, and Applications: A Guide for End Users, TAPPI, 2017

Which of these characteristics matter for each application?

Powder, paste, gel, slurry, aqueous dispersionDispersibility

CompatibilizationAspect ratioCrystallinityChemistry

Degree of fibrillationElectric charge

PurityIs it nano?

Is it cellulose?

Commercial Development Highlights

Several hundred companies have

tested cellulose nanomaterial,

possibly more than 1,000.

Yet, only a few commercial

applications reported to date.

Capacity, 2017(tonnes)

CNF* 1,774MFC/excl FiberLean 1,835CNC 475CF 6,000Total 10,084

FiberLean 8,000Total 18,084

Source: Nanocellulose Producers, Products, and Applications: A Guide for End Users

* Includes Turners Falls, 520 tonnes. Mill currently idle

Commercial Development Highlights

• CelluForce: CNC 1 tpd, January, 2012. Development in oil and gas with Schlumberger. Strategic partnership with Fibria.

• American Process: 100 tpy demonstration plant April 2015. Joint development with Birla Carbon, MYBiomass and Will & Co B.V., and P.R.G. B.V. .

• FiberLean Technologies, Omya/Imerys j/v; 8,000 tpy MFC = 40,000 tpy FiberLean MFC® mineral/MFC composite.

• Borregaard, Norway. Exilva: First “commercial scale” MFC. 1,000 tpy Q3 2016. Commercial development, including consortium with Unilever and several research groups. Full scale test of packaging products with BillerudKorsnäs

• Daicel: “leader in commercial MFC since 1990” with 1,000 tpy 10% to 35% paste.

• Oji agreement with Nikko Chemicals for joint development of CNF for cosmetic applications.

• Kruger: producing up to 6,000 tonnes per year

• Kyoto U. RISH with Nippon, Oji, Seiko PMC: NEDO project for CNF reinforced plastics

Commercial Applications

• Nippon Paper Crecia Co., Ltd., “ first commercial products made of functional cellulose nanofibers“: TEMPO CNF in deodorant sheets for “Hada Care Acty” adult diapers, 2015

• Nippon Paper Crecia co., Ltd., water-absorbing “Poise Sara Sara KyusuiLiner,” April 2016.

• DeLeón Cosmetics, U.S.: commercial cosmetic products with Innovatech nanocellulose for nanohydration. Products include Eye Masque, Face Masque, and Neck Masque

• Stora Enso. 100 million Elopak packages in Eastern Europe pilot market with New Natura Concept board grades containing MFC.

• Innovatech: DeLeon cosmetics and nanocellulose sheet.• Mitsubishi Pencil Co and DKS ballpoint pen ink with Rheocrysta.• CNF/MFC produced and used on site by pulp and paper mills – volumes

unknown/confidential. • Consortium of 100 companies: Nippon Paper Industries; Oji Holdings

Corp.; Toyota Auto Body Co.; Mitsubishi Motors Corp.; Mitsui Chemicals Inc.

The road to commercialization

Source: GAO

The road to commercialization

Source: GAO

The road to commercialization

Source: GAO

YOU ARE HERE

Business challenges

• Proof of concept• Need solid value proposition• Low oil prices• Funding challenges: the Valley of Death• Applications development• Who develops the applications? Who does the R&D? Who owns the IP?• It is not a “drop in”: implications for customer process• Market development• Scale up in production• Consistent quality from batch to batch• Which material is best for a given application?• What loading is optimal?• Scale up of applications• Competitive materials• Multiple sources of supply• Safety and regulatory issues

End user perspectives

• End users will need to invest in R&D to develop the applications• CNC: 16% investing in serious R&D; CNF: 24% investing in serious

R&D • 36% will not do serious work until commercial quantities are

available• 64% will not do serious work until they see data demonstrating the

value proposition • Other issues: multiple sources of supply, consistent quality,

uncertainty re future prices, EH&S/regulatory

Source: Market-Intell survey

End user concerns

• Initial lab tests with CNC were negative

• Standardization

• Compatibilization

• Difficulty redispersing dry products

• Approval for use in food/cosmetics/pharma

• Cost and supply: no verifiable value proposition

• Scale up

• “the industry as a whole is not good at product development”Source: Market-Intell survey

The road to commercialization

Source: GAO

YOU ARE HEREHOW DO YOU GET HERE?

What can producers do?

• Don’t know; no idea yet• Data on how they add value; success stories• Work with customers on application development• Regulatory• Commercial scale; availability of material• Develop material with different surface chemistry at lower price• Financial support for testing• Free samples• Strong product data

Source: Market-Intell survey

Consistent supply

• Specifications; batch to batch

• Multiple sources of supply

• Commercial scale

Source: Market-Intell survey

Specifications

• Definitions: CNC, MFC, CNF, CF

• Definitions: Nano

• Crystallinity

• Particle size

• Range of particle size

• Surface area

• Density

• Charge

• Degree of fibrillation

• Dispersibility

• Thermal stability

• Consistency from batch to batch

• Pct. solids

• Conductivity

• Viscosity

• pH

• Sulfur, sodium, calcium, lignin etc.

Source: Nanocellulose Producers, Products, and Applications: A Guide for End Users

Environment, Health, and Safety

• Is it nano?

• Is it cellulose?

• Is it safe?

• REACH, EPA, FDA, other

Source: Market-Intell survey

Applications-driven R&D

• Not a drop in!

• Implications for entire supply chain

• Which is best: CNC, CNF, MFC, CF? Other? What form?

• Value proposition:

– What loading is optimal? Which material?

– Weight reduction

– Material replacement

Source: Market-Intell survey

Cost alone does not determine the value proposition

$0

$10

$20

$30

$40

$50

$60

2% 4% 6% 8% 10% 12% 14% 16%

Bre

ake

ven

nan

o c

ost

Weight reduction

1.0%

0.3%

5.0%

Source: Market-Intell LLC

loading

Applications and potential volume(thousand tons)

Source: Nanocellulose: Technology, Applications and Markets, RISI 2014; updated Market-Intell, May, 2017

Market size Potential

loading

Nano Cellulose potential

Paper and paperboard 400,000 5.0% 20,000

Textiles 50,000 2.0% 1,000

Paints and coatings 40,000 2.0% 800

Carbon black 15,000 2.0% 300

Films and barriers 9,670 2.0% 193

Composites 9,000 2.0% 180

Oil and gas 17,500 1.0% 175

Nonwovens 7,000 2.0% 140

Water treatment 4,650 2.0% 93

Excipients 4,600 2.0% 92

Cement 15,000 0.5% 75

Adhesives 500 2.0% 10

Cosmetics 300 1.0% 3

Battery separator 60 2.0% 1

TOTAL 23,063

Pulp and Paper

• Release papers

• Barrier papers

• Lightweight

• Less softwood; cheaper pulps

• Wet end strength: productivity

Source: Market-Intell survey

Paints and coatings

• Non burnishing

• UV resistance

• Scratch resistance

• Rheology: paint in fewer passes

• Eliminate less desirable materials: e.g., silicas

Source: Market-Intell survey

Films and barriers

• Lightweight

• Cost reduction

• Eliminate CFCs

• Eliminate non biodgradable, non recyclable plastics

Source: Market-Intell survey

Composites

• Lightweight

• Cost reduction

• Use of bio-based materials like PLA

• 3D printing

Source: Market-Intell survey

Oil and gas

• Schlumberger: CNC introduced to conventional gravel pack fluids extends temperature performance.1

• UPM patent application WO2011089323, Agent and composition for oilfield applications, describes the use of CNF dispersed in water as a shear thinning agent.2

• Halliburton patent application WO2013116470 Cellulose nanowhiskers in well services describes a range of potential applications, e.g., for increasing the strength of a cement, or for increasing the viscosity of a water-based well fluid, a fracturing fluid, or a gravel packing fluid.2

Source: 1. Valerie Lafitte, Schlumberger, TAPPI Montreal 2017 2. Jack Miller, Nanocellulose Technology Applications and Markets, RISI, 2014.

Cement

• Increased flexural strength up to 30%; increased hydration with 0.2% CNC

Source: Jeff Youngblood, Purdue University, High Performance Cement via Cellulose Nanocrystal Addition, TAPPI, Montreal, June 2017

ForecastsMetric tons (000) Year

Vireo Advisors, high1 56,481 potentialUSDA**2 34,000 ~2045RISI, potential3 23,551 potentialVireo Advisors, low1 18,283 potentialRISI3 450 2025Market-Intell, 2017 115 2025

$US YearMarkets and markets, 20154 $250 million 2019Research and markets, 20165 $295 million 2020Japan, METI6 $8.5 billion 2030

Notes:

1. Shatkin, J.A., presentation at TAPPI International Conference on Nanotechnology for Renewable Materials, Vancouver, June 2014.

2. Based on Vireo Advisors study.

3. Miller, J., Nanocellulose: Technology, Applications, and Markets. RISI, 2014.4. http://www.marketsandmarkets.com/Market-Reports/nano-cellulose-market-56392090.html.

5. https://www.researchandmarkets.com/reports/3606997/global-nanocellulose-market-analysis-and-trends#relb1.

6. http://www.meti.go.jp/english/mobile/2015/20151124001.html.

2018 International Conference on Nanotechnology for Renewable Materials, Madison Wisconsin

June 11 - 14, 2018 | Monona Terrace Community and Convention Center Madison, Wisconsin

Thank you!Look for

Nanocellulose Producers, Products, and Applications:

A Guide for End Users

Available from TAPPI, and coming soon from TAPPI…

Nanocellulose, The Road to Commercialization:

Opportunities and Recommendations for Researchers, Producers, and End Users

Jack MillerPrincipal ConsultantMarket-Intell LLCjack.miller@market-intell.com