Sustainable Ingredients are industrial products made from renewable, low-carbon materials. They are intended to replace fossil fuel-based ingredients and ingredients whose production has a negative environmental impact, such as deforestation. They are the core objective of Corporation’s Climate 2040 Goals.
Sustainable Ingredients were a key area of focus of Calyxt. Combined with the efforts by Cibus and the combined development agreements in this area, Cibus is a leader in this important area.
Overview: The Demand Profile for Low-Carbon Products
Sustainable ingredients are a central pillar of the global industrial Net Carbon Zero 2040 climate goals. The goal of sustainable ingredients is to lower the greenhouse gas emissions associated with fossil fuel-based or environmentally damaging products. Over 370 leading companies across many industries (source: https://www.there100.org/re100-members) and across the globe have already developed plans to reduce or eliminate greenhouse gas emissions (GHG’s) and have announced Net Zero GHG targets for dates in the short- or medium-term future such as 2030, 2040 and 2050. Examples of these companies include:
- Procter and Gamble (P&G) – P&G Accelerates Action on Climate Change Towards Net Zero GHG Emissions by 2040 (company press release 9/14/2021);
- Unilever - Reduce Scope 1 and 2 emissions by 100% by 2030 against a 2015 baseline with an interim goal to reduce by 70% by 2025.
Replace fossil-fuel-derived carbon with renewable or recycled carbon in cleaning and laundry product formulations by 2030;
- L’Oréal - the goal is to achieve net-zero emissions of CO2 by 2050, to keep global warming under 1.5°C relative to pre-industrial levels,
in keeping with IPCC trajectories;
- BP (British Petroleum) – BP are aiming to be net zero across their operations on an absolute basis by 2050 or sooner and
to be net zero on carbon in their oil and gas production on an absolute basis by 2050 or sooner.
- ExxonMobil – is targeting net zero greenhouse gas emissions by 2050. The company has identified 150 potential steps and
modifications that can be applied to assets in its upstream, downstream and chemical operations (press report January 2022).
The actions to achieve Net Carbon Zero are all about redesigning many of the ingredients or materials that comprise these products. In each case, the goal is the lowering of greenhouse emissions. The way this is achieved can be different. The most discussed is to just stop using fossil fuel-based products. This can mean moving from petroleum products to sources like solar, wind, hydrogen or electric batteries. To major consumer products companies is commonly means changing core ingredients of their products that are contain fossil fuels-based products or the production/mining of the products creates environment damage that increases greenhouse gas emissions. The key focus of the latter are products whose production results in deforestation like palm kernel oil.
Cibus’ RTDS technology has a key role in creating the next generation of low-carbon products or ingredients. It is a key technology in the development of low-carbon products that are made from plants or from plant-based processes like fermentation where the source ingredients are renewable plant-based materials. In both of these areas, gene editing is a key technology both in new processes to generate plant-based material as well as in developing of new renewable plant-based products.
The Global Scale of the Opportunities for Low-Carbon Products
The global chemical industry is a vast marketplace, estimated at $3.82 trillion in 2019 (Statista, 2020), including chemicals used in the pharmaceutical and agrochemical sectors. The majority of the chemicals produced today are made petrochemically from non-renewable crude oil. The market for renewable chemicals was estimated to be $86 billion in 2020 (IHS Markit), constituting only about 2% of the total chemical market. Renewable chemical growth rates were 10.6% from 2015 to 2020 according to IHS Markit, driven by consumer demand and corporate sustainability targets. There is clearly a significant opportunity for renewable chemicals growth and venture capitalists invested $5.8 billion in bio-based materials and chemical companies from 2010 to 2019, reflecting the drive for sustainability, performance and alternatives to petrochemically derived products, according to Lux Research.
The market for products made using fermentation is forecasted to be $80 billion (Markle and Sears, 2021) and $72 billion (Harness Global, 2021) in 2026 with a growth rate of over 5% per annum from 2020.The faster growth rates for renewable chemicals including fermentation based products, will drive renewables share growth in the chemical sector. An increased renewable share of just 5% could generate an incremental $190 billion of renewable sales and assuming a royalty rate in the range 5-10% could generate royalty opportunities of $9.5 to $19 billion.
How Cibus is Positioned for Low-Carbon Product Solutions
Cibus is developing sustainable low-carbon products using two distinct technology platforms which are linked by Cibus’ core competency strength in complex gene editing.
- Through its subsidiary: Nucelis; Cibus is using its proprietary gene-editing technologies (RTDS®) for the efficient
development of innovative traits in microorganisms, such as yeast, bacteria and algae, to produce high value, sustainably sourced
specialty ingredients for the personal care, nutrition and flavor and fragrance industries.
Nucelis’ Accelerated Strain Advancement Platform (ASAP™) is a powerful specialty ingredient development platform that combines (1) the precision of the Cibus suite of gene-editing technologies, the Rapid Trait Development System™ (RTDS®) with (2) our advanced fermentation and pilot scale facilities and experience, and (3) our proprietary downstream and purification processes, to position us as leaders in the efficient development and delivery of high-value, performance-focused, non-transgenic specialty ingredients for our partners in the nutrition, personal care, flavor and fragrance markets, and for future applications in Ag biologicals, active pharmaceutical ingredients (API’s), human health and animal health.
- Cibus’ complex trait gene editing technology capability across a wide range of crop platforms provides a significant launching
pad for the development of sustainable low-carbon products with high volumes and low-cost targets. In particular, Cibus’ ability to
use gene editing to control the types of oil that a crop can generate opens up huge addressable markets, including biopolymers,
commodity chemicals such as household detergents, personal care products and sustainable lubricants.
Cibus has been successful in developing plants with traits that allow the plant to generate oils with different and improved characteristics compared to the unedited plant. An example of this is Cibus successful development of a trait in canola that generates higher levels of oleic acid-based canola oil which has higher stability and a longer product lifetime in applications such as frying oils and industrial lubricants compared to regular canola oil as well as its work to develop sustainable oils to replace oils that are targets of the key Net Carbon Zero climate efforts.
Using these 2 proprietary platforms, Cibus is positioned to be a leader in the development of low-carbon products into many of the industrial segments where demand is most urgent. Cibus has already established relationships with a wide range of industrial partner companies. It expects to be a leading company in developing solutions to accomplish many of the important Net Carbon Zero 2040 climate goals.