Executive Speeches

Nicholas C. Fanandakis
Group Vice President - DuPont Applied BioSciences
Remarks as Prepared for Keynote Address to EuropaBIO
Brussels, Belgium
September 15, 2008

As I consider the future of the bio-based economy, I can't help but wonder will today be remembered as an important moment in history?  Will some of us in this room be seen as revolutionaries?  From my vantage point at DuPont, looking across global economies and major markets - I think the answer to both questions is "yes."

I say that because I firmly believe that the beginnings of an industrial biotechnology revolution are already underway.  And while many things could be done to slow it down or hem it in, there is very little, realistically, that could be done to stop it.  That's because the potential inherent in the new biology offers a realistic way to address critical global needs such as feeding a global population and reducing reliance on petroleum in a sustainable manner, on the scale required, with the resources available.  Investors, governments and consumers around the world are coming to this same realization.

To formulate a vision of where the industrial biotechnology revolution is taking us, we could draw an analogy with one of the great industrial developments of the last century.  At the beginning of the 20th century, if some association had held a similar conference of minds to discuss the needs and challenges of the decades ahead, I doubt any one of them in that moment could have guessed what the impact of the internal combustion engine would have been, to use one example.  

The automobile shrank the world.  Asphalt streets paved the way for something fast and sleek, and offered a new freedom and a new way of life.  The culture of the automobile changed the patterns of daily living, the plans of cities, and businesses large and small. 

In hindsight we know the car has its disadvantages.  Nearly 100% of transportation energy comes from oil, and in our time that brings serious supply security issues.  Automotive exhaust contributes greenhouse gas emissions, and that affects climate change.  And oil provided global society with another important product: petrochemical-based materials. But this technology shaped a century of growth and development around the world.  We could not imagine modern life being what it is without cars. Now in the 21st century, we are looking for ways to make automotive technology a more sustainable technology.  And - no surprise - industrial biotechnology is going to help us do that.

I chose the automobile not as a random example, but precisely because some of the shortcomings associated with automotive technology will be addressed by biotechnology.  In fact, chief among the potential impacts of biotechnology overall is its ability to address the shortcomings of the industrial transformation of the 20th Century - identified as it was with fossil fuels and waste generation - by providing cleaner manufacturing processes and renewable products and resources.

I came across the quote which I thought relevant to today's discussion, "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel." Sheikh Rashid bin Saeed Al Maktoum, Emir of Dubai - someone I would deem knowledgeable in the area of the future of oil said this in the late 1980's amid concern that Dubai's oil would run out in a decade or two.

This is my first and perhaps most important point: The industrial biotechnology revolution is here; it is not optional - in fact, it's inevitable Modern biotechnology is just starting and there is very high technological headroom that will include the integration and blending of biology, chemistry, and engineering in new and valuable ways.  This is integrated science.

For example, while new biological innovations enabled the production of renewably sourced propanediol, or Bio-PDO™, the success of our renewably sourced polymer, Sorona®, can be credited to the company's expertise in chemistry and materials science to make monomers, polymers, fibers, packaging and household applications and our market access to bring these products to the global market.  Another example of integrated science at work is biofuels.  I believe that plant and process design will be one of the great challenges we face as we scale up to deliver the large volumes of biofuels needed to meet world demands.  And that will be solved by engineers.

Industrial biotechnology has a lot to offer to Europe in particular.  Europe has an excellent biotechnology research base, the world's largest chemical industry infrastructure and knowledge base, and solid development and production of bio-specialties. Cellulosic feedstocks in the European Union provide significant opportunities to produce renewably sourced products from non-food sources. Europe has strong political support for advanced concepts of sustainable production and a supportive regulatory framework.  The European Commission has called for concerted action to quickly foster the emergence of six lead markets where Europe has the potential to become a world leader. The commission considers bio-based products as one of them, and it has committed to stimulate the development, production and uptake of bio-based products in Europe.  I believe it is fair to say that Europe could be a leader both on policy and on adoption of industrial biotechnology.

My second point builds on the first. Biotechnology is adding new raw materials and new process technologies to address the needs of the 21st century by providing cleaner manufacturing processes and renewable products and resources.  Our lead scientist likes to say that today's petroleum-based petrochemical industry is populated by the Darwinian survivors of more than 70 years of synthetic chemistry, and I agree.  They will not be displaced anytime soon.  However, biotechnology will allow the utilization of a whole new range of feedstocks that will take their place along side classic petrochemicals.  In some cases they will coexist as a ready and preferred option, in other cases as a tough and direct competitor.  So don't expect sweeping changes where renewably-based processes push out petroleum-based processes overnight.

Rather, biotechnology and classical chemistry and chemical engineering will be coordinated and integrated with results being more effective together than either technology path could produce alone.  Even though a lot of the glory goes to our biologists, our miracles of science continue to require the expertise of our chemists and engineers. 

Which brings me to my third point: To succeed in world markets, new biomaterials cannot be simple substitutions.  They must result in products that are more environmentally sustainable with cost parity and performance superior to petrochemical-based equivalents.

The biomaterials revolution is well under way globally.  From textiles to industrial and personal care ingredients, biomaterials are entering the economy.  But at this stage I would call it a silent revolution.  It is our job to bring these products into the market with a roar, not a whisper.  

A number of companies are innovating in this area.  Products such as polylactic acid, polyhydroxyalkanoates, renewable glycols - all are being produced from renewable sources.

At DuPont we already have products like Zemea®, Susterra™, Sorona® and Cerenol™ as well as grades of Hytrel® -- everything from monomers to polyols and polymers -- that are in the market and making an impact.  As more biomaterials move in to the market, I believe we must:

• Educate the consumers on where to find biomaterials and make those locations easily accessible and trustworthy. 
• Provide consumers the tools to know what green, renewable, natural, organic and other environmental claims mean.  For this we must create a standards setting body.  ECOCERT™ has done a phenomenal job at starting this, but government agencies throughout the world must now follow suit.
• The promise of biomaterials is to free ourselves from the dependence on depletable resources.  Renewably sourced materials contain an intrinsic carbon value.  This carbon doesn't come from depletable resources but constantly renewable agricultural resources.  Not only does a renewable carbon decrease dependence on petroleum, but also has the potential to decrease the amount of carbon dioxide emissions to the atmosphere.  This industry is early in its formation, but as this industry continues to grow a standardized way of measuring carbon will be essential to our efforts to demonstrate to our customers our ability to operate in an environmentally sustainable manner. 

A couple of years ago a New York Times reporter writing a story called, "DuPont Looking to Displace Fossil Fuels," was surprised when our Chairman, Chad Holliday said that our products were not just petrochemical replacements - that all of them had improved performance compared to petrochemical equivalents.   As an industry we need global audiences to understand that biomaterials are not just about being green with renewable ingredients. I'd like to see us all make a commitment to performance in use first, with environmental performance as an added benefit.  Consider another car analogy.  Some consumers were prepared to sacrifice performance for clean technology, but automobile hybrids really took off when hybrid performance achieved parity with standard models in a similar price range and provided the added benefits of lower fuel costs and cleaner emissions.

I have mentioned sustainability several times.  Let me expand on that.  At DuPont, sustainability has become a lifestyle.  We were one of the first companies to publicly establish environmental goals 18 years ago.  We have broadened our sustainability commitments beyond internal footprint reduction to include market-driven targets for both revenue, and research and development investments like biofuels.  The goals are tied directly to business growth, specifically to the development of safer and environmentally improved new products for key global markets, including products based on non-depletable resources, like biofuels. 

Biofuels are more than a substitute technology.  We believe that industrial biotechnology's first game-changing innovation will be advanced biofuels, and the world is watching our efforts.  If we can deliver them sustainably, industrial biotechnology industry will morph into the large-scale biotechnology revolution that we are talking about today. 

We will be in a position to effect concrete transformations in other markets and sectors that currently rely too heavily on traditional hydrocarbons. 

For example, ethanol production in the United States currently offsets more than 7 billion gallons of petroleum demand.   A recent Merill-Lynch study estimates that ethanol is lowering gasoline prices by 15-20%.   But at DuPont, we see grain ethanol as only the beginning.  We believe going forward that we will see a number of new biofuels with enhanced performance characteristics.  A large number of companies are making significant investments attempting to produce a variety of renewable molecules for use in gasoline and diesel.  They are using an army of biochemical and thermo chemical approaches and numerous different bio-feed stocks. 

Biobutanol is an example of an advanced biofuel molecule that we're focusing on at DuPont with our partner BP.  Biobutanol is a fuel that is more gasoline-like than ethanol and that can be delivered through existing gasoline pipelines.  Biobutanol is high octane, low in greenhouse gas production, and compatible with today's fuel infrastructure.  And added to ethanol-gasoline blends, it has been shown to improve air quality, especially in the summer.    

Our experience with biofuels as well as with applied biomaterials underscores another critical point:  Given the complexities and specializations fundamental to biotechnology, no one company can go it alone.  There will be pathfinders and leaders, but the future of biotechnology will be a future of partnerships.  We must work together.  Large and small companies are finding common cause to work together. Very large energy companies are placing bets in this new technological revolution.  Governments and venture capitalists are priming the pump of innovation, and we can expect the result to change the fundamental structure of the industrial landscape.
One example from our own experience illustrates this.  Last spring, DuPont and Danisco announced an agreement to form a 50/50 global joint venture to develop and commercialize the leading technology for the production of cellulosic ethanol.  Cellulosic ethanol is a next generation biofuel produced from non-food sources and addresses a $75 billion global market opportunity. By combining our expertise in the various steps of pre-treatment, enzymatic hydrolysis, fermentation, scale-up and process design our goal is to derive a synergistic combination of these steps to arrive at a single integrated technology solution.  Our technology is viable right now and we intend to make cellulosic ethanol from multiple non-food sources an economic reality around the world - and to do so fast.  

Whether our partnership with Danisco on enzyme technology or with BP on the upstream of fuels science or with Tate & Lyle on carbohydrate manufacturing - we know that our success will be measured by the success of these partnerships.  We search the world continuously looking for other partnering opportunities.  We cannot and will not do it alone.

Our work on non-food sources of cellulose for ethanol leads me to another point.  Biotechnology is not just industrial biotechnology.  It is also powering agricultural productivity and sustainability.  We believe that it is imperative and feasible to meet the world's growing needs for food, fuel, feed, and materials all at the same time - and to meet those needs in a way that respects the environment and enhances sustainability.  Agriculture can meet these challenges.

Today, we have the potential for delivering safe, nutritious foods and producing more renewable energy and materials, all while reducing our environmental footprint. We need to apply science to maximize productivity from each unit of land.  Right now, we're working on drought-tolerant crops, plants that require less nitrogen or that use nitrogen more efficiently, and crops that resist insects and diseases.  Through this kind of innovation, we expect to accelerate decades of expanding agricultural productivity and increase corn yields an additional 40 percent in the next 10 years.  Substantial production increases of 40-70 percent yield are possible in Central and Eastern Europe, even without adoption of GMO crops.  Adoption of GMO would obviously allow a further increase in yield in the European fields.

With steadily expanding agricultural productivity and next generation biofuels it is not an issue of food versus fuel.  It is an issue of food and fuel.  We can and will provide both.

But we also need to end the world's overdependence on petroleum and to do so in a sustainable way.  Last month's release of Version Zero, the global principles for sustainable biofuels production from the Roundtable on Sustainable Biofuels, was an important step forward as have been the efforts of the Keystone Center and others.

DuPont appreciates the open and collaborative processes that lead to the development of these principles, appreciates the opportunity to comment on them and looks forward to their future development. We believe it is imperative to continue to evolve our analysis and policies around biofuels as our understanding of the potential impacts and solutions are realized.  We need a common approach to responsible land use practices; minimized consumption of natural resources such as water; evaluations of all fuels - not just biofuels -- and their value chains based on internationally accepted life cycle assessment tools; standards for government incentives, and fuel performance.  Today, I encourage you and those you represent to review and engage on the Roundtable's draft principles.

Looking forward to the nine decades of the 21st Century that are still to come, our ambition should be nothing less than to create a "biology-based" economy much as our predecessors created a fossil fuel based industrial economy in the last century.  If we're successful, a biology-based economy will look something like this:

• Large petrochemical refineries will still exist and products will be used for fuels and chemicals, perhaps concentrated in resource rich countries like those in the Middle East.
• Much smaller, dispersed bio-refineries in the 100-500 million-pound-size will start out being built based on specific regional and geographical advantages in farmlands throughout the world producing multiple outputs - food, fuels, and chemicals.  They will gradually dominate the industrial landscape over the next century as petrochemical supplies become more expensive and harder to aquire and concerns over climate change force greater attention to CO2 footprints.  Moreover, the inevitability of the biorefinery will also provide the building blocks for the next generation of chemicals and materials, just as the current industry is based off 'side streams' from petroleum refineries.
• Agricultural yields will continue to increase dramatically driven by biotech innovations in the developed world and adoption of modern agronomic practices in the developing world.  Overall world agricultural output can meet the multiple demands of food and fuel.
• Simultaneously, new specialty crops "biomass crops" such as switchgrass and myscanthus will redefine harvestable yields and new biotechnology tools will utilize these feedstocks for fuels and chemicals.  Fuels will be the initial products from cellulosics and in the future industrial chemicals will also be derived from biomass.
• Efforts like the Roundtable on Sustainable Biofuels and the Keystone Center will help the food/fuel debate to recede, or consensus will be reached on the long-term vision of supplying fuels, materials and chemicals from resources that are cultivated in a sustainable manner.
• Biofuels will be abundant enough to have a material impact on rural economies, national security and climate changing gases.
• Biotechnological understanding and discoveries will continue their exponential growth for a long period of time, resulting in capabilities currently undreamed of.
• We expect further marriage of chemical and biological feedstocks as well as technologies to make a wide range of industrially important fuels and chemicals.  For DuPont, that near term future (20-year horizon) will range from engineering plastics to advanced fibers and composites.  Examples of the future in biomaterials could include blends of Kevlar® and cellulose fibers and renewable nonwovens that could join the stable of our Tyvek® brand.  For fuels and other specialties, the only limits are our imagination and business models.

I started with an automotive analogy, so let me conclude with one - the vintage gull-winged DeLorean converted to a time machine in the 1980s "Back to the Future" movie trilogy.   At the end of the first film, Doc Brown, the eccentric scientist has returned from the future and is preparing to go back.  He stands beside his transformed DeLorean, and feeds the engine food waste from a nearby trash can instead of gasoline.  As he prepares to depart, the film's hero, Marty McFly observes that there's not enough road in front of him to reach the required 88 miles per hour to entire time travel.  Doc replies, "Where we're going, we don't use roads," and the formerly earth-bound DeLorean simply levitates and rockets into the future. 

Let's make that the appropriate metaphor for the bio-based economy!