Bio-based chemicals are the unexpected beneficiaries of the North American shale gas boom, according to a report by market research organization IHS.

Because the switch to lighter feed is tightening supply of conventional feedstocks such as propylene, isobutylene, butadiene and isoprene, plant-derived feedstocks such as sugars or glycerin are emerging as economically competitive starting materials for a range of commodity chemicals, the report says.

"Production capacity for renewable chemicals is significant, even though it accounts for a small share of overall chemical production capacity," said Marifaith Hackett, director of specialty chemicals at IHS Chemical and the report's lead author. "In 2013, total annual production capacity for renewably sourced chemicals was approximately 113 million t including nearly 89 million t of ethanol capacity."

Of the bio-based chemicals now in commercial production (excluding ethanol), fatty acids accounted for 46% of total global bio-based chemical production capacity in 2013, followed  by sorbitol at approximately 16%, glycerin at 14 % and fatty alcohols at 11%. Lactic acid, furfural and several other small-volume chemicals round out the list.

"As the process technologies for these chemicals evolve, the gap between bio-based and fossil-fuel based production costs is shrinking," Hackett said. "The key is that, increasingly, processes based on renewable starting materials provide a critical alternative source of 'on-purpose' production for certain chemicals that are in short supply, such as butadiene."

"Tire and rubber producers in particular want to ensure stable long-term supplies of the key chemical precursors for their products, and bio-based chemicals have the potential to address that need along with offering greater price stability," she added.

In addition to supply chain considerations, Hackett said consumer demand and corporate sustainability initiatives are driving the increased use of bio-based chemicals. Employing bio-based chemicals helps manufacturers respond to consumer demand for more sustainable products, and supports efforts to reduce its carbon footprint. Bio-based chemicals usually have lower cradle-to-gate greenhouse gas emissions than their fossil-fuel-based counterparts.

As bio-based chemicals are derived from agricultural products, the value chain for the bio-based chemicals sector differs significantly from that of the chemical industry, the HIS report notes. Hackett pointed out that nontraditional players - notably industrial biotechnology firms and start-up companies with focused expertise in chemical catalysis - are emerging as chemical producers. In many cases, these companies are partnering with established agricultural processors and chemical manufacturers to gain access to capital, fermentation or chemical processing expertise, proprietary technology, or feedstocks.