Hello, and welcome to this Argus Chemicals Conversation Podcast. The first in our biochemicals/bioplastics series.
I am your host James Elliott, and I am joined by a special guest today: Kelly Knopp, CEO and Co-founder of Citroniq joins us.
Hi Kelly,
How are you doing?
Good! I’m glad to be here.
(Q1) Kelly, it’s great to have you with us on the Argus Chemicals Conversation podcast. Please can you introduce yourself – and can you give us an overview of Citroniq?
Yes, I’d be happy to. First, I’d like to thank Argus for the opportunity to share the progress we’ve made at Citroniq Chemicals. My partner, Mel Badheka, and I started the company over 5 and a half years ago with a goal to do something transformational in the petrochemical space around sustainability or circularity.
We developed what we call Citroniq’s E2O process, taking ethanol - a great bio-feedstock readily available in the US market - and repurposing it from the fuels market to a higher-valued use in plastics.
Our plan is to build a 3-plant platform in Nebraska, bringing manufacturing jobs back to rural America and creating new domestic demand for corn, an important agricultural product for US farmers.
(Q2) Can you talk more about your feedstock, technology and process?
We decided it was important for us to keep our process as a “pure play” with no comingling of our product with conventional fossil fuel-based polypropylene. That way we can prove that our product is 100% biogenic through direct testing, reducing “greenwashing” concerns and avoiding reliance on material balance calculations.
Our process is pretty straightforward: 100% ethanol in, and bio-polypropylene pellets and water out. There were two important factors that we considered in our process design: commercial scale and proven technology. We worked backwards from a world-scale polypropylene design capacity (600 kta) because we wanted to be operationally competitive with conventional polypropylene.
From a technology standpoint, we have a great partnership with Lummus Technology, our exclusive technology provider, who is also an investor in Citroniq. All of the processes licensed from Lummus have been built at a similar size, with over a decade of commercial operations under their belt.
(Potential related follow up question – You have opted for ethanol to PP rather than other products – is there a reason for this?)
We selected polypropylene over other plastics, such as polyethylene, PET or vinyls, because of the variety and breadth of consumer products that are specifically looking for sustainable solutions – everything from packaging to clothing fibers, to medical and automotive uses. That doesn’t mean we won’t look at some of those other plastics in future projects to expand our bio-based plastics portfolio.
(Q3) Do you see any legislative support for biochemicals/bioplastics in the US or other regions around the world? Do you see this as important for demand of your product?
We wanted to develop something that we could build upon for the long-term – multiple sites, multiple products - and not be dependent upon government subsidies that might be here today, but gone with the next administration. Many of our customers and their downstream customers are multinational corporations that are dealing in both regulated and unregulated markets around the world. Our goal is to produce sustainable, carbon negative products that can help these companies reach their Net Zero goals globally.
(Q4) Companies can use products from different sustainable pathways to reach their sustainability targets. What kind of role do you see biochemicals/bioplastics in this?
We think we have an important role in both sustainability and circularity. Today, while we see many benefits to using recycled plastics, they are still ultimately produced from fossil fuels. Our polypropylene starts with sustainable virgin material, which makes for a lower carbon footprint throughout the entire product life cycle. Because our products are completely “drop in” alternatives to conventional polypropylene, customers can dial in the right carbon footprint and price point for their application by blending our product with their traditional resin.
(Q5) Last year September (June 2024) Citroniq closed its Series A funding. Is there appetite from the investment community in bio/sustainable projects?
Yes definitely, we have seen strong interest from private equity and climate funds for potential investment, especially as we get closer to a Final Investment Decision. The low-risk nature of our project, using proven technologies and producing at full commercial scale, is attractive to our investors.
(Q6) Polypropylene goes into automotive parts, durable goods, fibres and packaging applications. Are there any particular end use sectors which you think are showing strong demand for your product?
We see interest across essentially the entire range of applications, so our opportunity for the first plant is to focus on a few key sectors that have the greatest need for the associated carbon reduction. We see automotive, food packaging and hygiene products as several of the key sectors for us.
We’ve already seen sufficient interest to justify our second plant, so our goal is to get it operational as soon as practical to provide reliable backup supply and to broaden our product mix.
(Q7) Other biochemicals assets which have come online have tended to sign offtake agreements and then worked on co-marketing the product, supply chain and end use product together.
One major advantage that our configuration provides is that we don’t require any new development of supply chain or offtake infrastructure. Outside of our plant gates, we don’t require any adjustments from our suppliers or customers: ethanol moves by rail just as it does today, polypropylene customers receive the exact same physical product with the same product specifications and most importantly, we do not have to develop new markets – we fit within the existing polypropylene product mix. The marketplace already understands the benefits of sustainability and carbon reduction. We’re not trying to teach them something new. Using our Bio-Polypropylene is an easy way for plastics consumers to generate a Scope 3 reduction, supporting their existing Net Zero objectives.
That’s all we’ve got time for today. It’s been really interesting to learn about the Citroniq project in Nebraska, and to hear your perspective on the global biochemicals/bioplastics industry, Kelly. Many thanks for joining us. Goodbye
