NexantECA has been engaged with Origin Materials (Origin) and its investors and customers in various capacities for about 10 years, since shortly after the genesis of its platform technology to produce para-xylene from biomass. Recently, NexantECA was engaged to perform independent technical due diligence on the Origin platform in advance of going public via a merger with the Artius Acquisition SPAC. In this Project, NexantECA evaluated the technical theory, process design, feedstock selection, competitiveness, commercial deployment plans, and production economics behind the Origin platform. NexantECA has been released from certain confidentiality clauses and is pleased to share some highlighted results from its independent due diligence.
Origin Materials is a novel biomaterials technology developer that was founded in 2008 under the name Micromidas, with the original goal of commercializing biopolymer production from wastewater. During R&D for its wastewater valorization technology, Origin discovered the platform that has since become its primary focus and platform technology. This platform technology converts cellulose, the structural component in the primary cell walls of green plants, into chloromethyl furfural (CMF) and lignin (another plant structural component) into hydrothermal carbon (HTC). Origin has also developed technology to convert CMF into para-xylene (PX), a key intermediate used to produce PET, the polymer used for beverage bottles, other food and beverage packaging, textiles, carpets, etc.
Origin’s PX is a drop-in material, chemically identical to conventional materials. PET produced from Origin’s process can therefore replace conventional PET (which has a global market of nearly 100 million tons) in common applications. Origin is well-positioned to enter this market and leverage the sustainability advantages of its material, as single-use PET applications have fallen under intense scrutiny because of sustainability concerns. Origin is also planning to target production of FDCA, PEF, and PET/F from its CMF which it views as having higher value potential, though NexantECA notes that these are unproven markets and thus higher risk.
Origin’s technology begins with the controlled acid degradation of biomass into CMF. The control and optimization of this reaction is Origin’s primary value addition and core innovation. The reaction producing CMF also produces a carbonaceous byproduct, hydrothermal carbon (HTC), in quantities on the order of twice that of CMF (depending on feedstock), as well as several other byproducts. As a result, monetizing HTC is important to Origin’s economics. Origin plans to use HTC as a fuel and target renewable energy markets in the near-term but plans to develop higher value end-uses in the future.
Origin’s CMF is converted to 5-methyl furfural (MF) via hydrodechlorination, which is converted to dimethyl furan (DMF) via hydrogenation, and then PX via a Diels-Alder reaction. The PX will then be used in conventional systems to produce PET.
Block Flow Diagram of Origin’s Process
Origin has been extensively piloting and performing laboratory research on the CMF production step of the reaction since 2012, focusing on optimizing yields, reducing batch cycle times, and optimizing its process. It has done more limited piloting of the hydrogenation reactions but is currently in the process of implementing additional pilot work which will help to de-risk this part of the process. Origin’s secondary technical focus at pilot scale has been in its Diels-Alder reaction (more focus than the hydrogenations, but less than CMF production), and it has focused its work on optimizing the process and yields.
In novel applications, such as Origin’s, where there is not a strong understanding in industry of process phenomena, an empirical approach to scale-up is the lowest risk. Origin’s approach to scale-up has been largely empirical for CMF production. It has taken a more theoretical / empirical hybrid approach for the conversion of CMF to PX. In line with best practice empirical scale-up, Origin has made a strong decision in scaling CMF production to its Origin 1 demonstration plant prior to attempting commercialization; knowledge gained at this scale will help to inform and de-risk the Origin 2 commercial plant.
Origin has studied the economics of using its technology for producing PX to target the PET market at commercial scale (Origin 2) and is actively working on Project deployment. NexantECA has examined these estimates and finds that operating costs for biomass through to PET could be about 25 percent higher than anticipated. Discrepancies between NexantECA’s and Origin’s cost estimates include both pricing and consumption factor differences. Most notably, NexantECA finds pricing assumptions for ethylene and hydrogen to be underestimated. Operations at Origin 1 should help to clarify commercial economics.
As with any novel process, Origin’s technology has inherent risk (both technically and economically). In addition to following best-practice scale-up techniques, it is mitigating this risk by learning from other developers that have come before and has taken a proactive approach to address the challenges others in the sector have faced in commercialization.
Targeting a large, existing, and stable market is a key strength of the Origin Materials platform. Market acceptance has been a key roadblock in the commercial success of a number of developers in the renewable chemicals industry. Companies have developed technologies for the production of sustainable, novel materials that have a multitude of uses but that do not have existing markets. Creating the markets for these materials while also scaling-up a novel technology has proven very challenging. For example, bio-succinic acid technologies received a lot of attention in the early/mid-2010’s and all of the developers in the space have since shifted focus, gone out of business, or otherwise appear to have exited the space.
Using wood as a feedstock mitigates a lot of the feedstock risk that cellulosic ethanol players faced in targeting agricultural residues. In theory, agricultural residues, like corn stover, should have been a low-cost feedstock that did not compete with food resources. Much of the material remained on the field, un-used, and industry players expected farmers would be eager for a value-added end-use to the otherwise “wasted” material. However, getting buy-in from farmers was challenging, and farmers were required to not only change their practices but also invest in the infrastructure to collect, bale, and store material. A strong and secure feedstock sourcing strategy is therefore crucial for economically viable agricultural residue feedstock. Opting for a feedstock with an established market and collection infrastructure is therefore a strength for Origin.
Selecting wood feedstock also mitigates some of the solids processing challenges that plagued the cellulosic ethanol industry. While equipment and practices for turning wood into chips of various sizes is widely available and understood, the same equipment cannot easily be used on softer feedstocks that bend rather than break under mechanical pressure. Softer feedstocks, like wheat straw and corn stover are, as a result, difficult to process and are prone to clogging equipment, and this caused issues with cellulosic ethanol commercialization.
From a technology perspective, Origin’s catalytic approach mitigates some of the challenges that developers with fermentative and thermolysis platforms have faced but is not without its own inherent set of risks. Importantly, Origin has learned from others to follow best practice scale-up. In industry, more ambitious scale-up approaches have resulted in challenges at commercial scale.
Overall, Origin is rigorously developing a technology that is well positioned to meet the growing demand of the undersupplied green polymer market. It is an early-stage technology that is not without inherent risk, but the company is taking a proactive approach to mitigation by following best scale-up practices and learning from the challenges others have faced in the industry. If Origin continues to implement best practice techniques and follow mitigation steps as we have highlighted, its scale-up targets for the Origin 1 and Origin 2 plants appear to be reasonable and achievable.
The findings included herein are provided on a nonreliance basis. The full public report on our findings is available by contacting Sarah Boisvert at SBoisvert@NexantECA.com.
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