TAGS: Sustainability / Natural Solutions Additives for Packaging
Avantium N.V., and Origin Materials, Inc. announces a partnership to accelerate the mass production of FDCA and PEF for use in advanced chemicals and plastics. The partnership aims to bring the technology platforms of both companies together in order to produce FDCA from sustainable wood residues on an industrial scale.
FDCA (furandicarboxylic acid) is the key building block for the biopolymer PEF (polyethylene furanoate. PEF can be used in a wide range of applications such as bottles, packaging, films, fibers and textiles, which represent major end-markets.
Bridging Two Complementary Technologies
This new partnership brings together Avantium’s proprietary YXY® Technology that converts plant based sugars into FDCA, with Origin’s patented technology platform which turns carbon found in sustainable wood residues into useful building-block chemicals such as CMF (chloromethylfurfural). Bridging these two complementary technologies creates a route that can convert sustainable wood residues via CMF into FDCA.
Avantium is currently constructing the world's first commercial-scale FDCA Flagship Plant in Delfzijl, the Netherlands. Avantium has signed offtake agreements for the supply of FDCA and PEF to major brand names and industry leaders for a range of applications, including Carlsberg, LVMH and AmBev.
Origin Materials has recently reported that it has mechanically completed its first commercial manufacturing plant Origin 1 in Canada. This plant is anticipated to produce materials including CMF from sustainable wood residues, which can subsequently be converted into high-performance products used in packaging, textiles, apparel, automotive, and other applications. For Origin 1 and future plants, Origin has signed numerous capacity reservations and offtake agreements with well-known brand owners.
Industrial technology license agreement the technology partnership between Avantium and Origin includes a non-exclusive industrial technology license agreement, providing Origin Materials access to relevant parts of Avantium’s process technology to enable the conversion of Origin-produced CMF derivatives into FDCA at a 100 kilotonnes per annum scale facility.
Process Technology to be Incorporated in Supply Chain
Avantium will also execute a development program under the license agreement to establish a bridge between Origin’s and Avantium’s technologies. Origin Materials expects to incorporate Avantium’s process technology into the supply chain for product from its future plants. In support of the industrial technology license agreement, Avantium and Origin Materials have made ancillary arrangements to develop the market for FDCA and PEF applications.
Under the technology license agreement, Avantium grants Origin a non-exclusive license to use certain parts of Avantium’s proprietary YXY® process (including certain patent rights) for the purpose of designing, constructing and operating the licensed facility and producing, using, selling and converting FDCA manufactured at that facility.
Financial terms Under the terms of the transaction, Avantium received an upfront payment of €5 million in 2022. As a result of signing the industrial technology license agreement, Origin Materials will pay Avantium a milestone fee of €7.5 million.
Agreement to Pay Subsequent License Fees
Origin agreed to pay Avantium subsequent license fees dependent upon achievement of different development milestones. Following the commercial operations date of the licensed facility, Avantium will be eligible to receive royalties for each metric ton of FDCA produced at the licensed plant.
The license fee milestone payments and overall royalty rate are in line with industry practices and with previous guidance provided by Avantium. Offtake agreement In support of the industrial technology license agreement, Origin Materials and Avantium have also entered into a conditional offtake agreement (“COA”), whereby Avantium will sell FDCA and PEF to Origin Materials from its FDCA pilot plant in Geleen (the Netherlands) in 2023 and from its FDCA Flagship Plant in Delfzijl (the Netherlands) as from the commercial operations date in 2024.
During the term of the COA, Origin will purchase a gradually increasing minimum annual volume of FDCA on a take-or-pay basis, which has the potential to enable Origin to accelerate market adoption of FDCA and PEF. Avantium continues to pursue its dialogue on additional offtake and industrial license agreements with other industrial partners to further expand and diversify the market for FDCA and PEF applications.
Source: Avantium