The Edge SME Forum 2018: Converting greenhouse gases into bioplastics

This article first appeared in Enterprise, The Edge Malaysia Weekly, on July 16, 2018 - July 22, 2018.
-A +A

When people talk about greenhouse gases, they usually see a problem. Mark Herrema, who had read Marcus Aurelius’ Meditations while he was laid up with an unexplained condition, was particularly struck the Roman emperor’s assertion that everyone had the free will inside to shape external events and what they mean to us. So, he started wondering how he could turn greenhouse gases into a solution.

“The journey started in September 2002. Something was happening to my body and what had started as just a pain in my side eventually kept getting worse. I was just starting my junior year in college at Princeton and within a couple of months, my body really started to deteriorate,” says Herrema.

He was delivering a presentation on “Greenhouse Gas as a Natural Resource” at the IBM Think technology conference in Las Vegas, the US, in March.

Herrema says he lost 25 pounds and was getting so tired that he stopped going to class. He was seeing a “ton” of doctors, travelling to New York and back, and everyone was stumped. They just did not know what was happening to his body.

“I used to sit in the university chapel and just sort of say, ‘What the heck is going on?’ And it was around this time that I picked up Marcus Aurelius’ Meditations, a book that became very important to me. And after reading it, I started to wonder if there was a reason for all this, if something good was happening to me and if there was something I could take away from it all,” says Herrema.

His tipping point came when a doctor confirmed that he had internal bleeding and prescribed iron supplements to treat the symptoms. Herrema flipped. “I said, you know what? Forget this! I don’t want iron supplements. I want to solve the problem.”

Fed up with the whole medical establishment, he started doing his own research. It was during this time of intensive research that he came across a newspaper article, “Getting Cows to Cool It”, on methane emissions from cattle.

Herrema learnt two interesting facts about this. First, 95% of the methane is emitted in burps rather than farts. And second, each cow emits about 600 litres of methane a day. “Well, this was the lightbulb. Because if you know how much methane each cow is emitting, you can start to do some maths right? If you have a 1,000-cow farm down the road, you can figure out precisely how much methane is emitted from that farm every single day.”

This was important because methane has an actual market value. From there, he started thinking about other places where methane would go straight into the air, such as landfills. Places like North Dakota and Texas were just flaring vast amounts of methane.

“We hear about climate change and global warming and all this stuff. And sometimes, they do not seem very real. But if you go to, say, a power plant, there are numbers. This is carbon that has a weight and it is going into the air in a massive way. That is incontrovertible!” says Herrema.

He points out that everybody was talking about carbon emissions like they were the enemy. But what if we flipped the paradigm and saw these emissions as a resource? “Trees that are 100ft are made pulling carbon dioxide out of the air. Beautiful coral reefs are made pulling carbon out of the water. So, we talk about greenhouse gases doing bad. But in nature, it is the basic building block,” says Herrema.

He wondered how it would be if, instead of demonising carbon emissions and talking about taxing them or putting them underground, we could harness them? “What if we could create a paradigm where we started using greenhouse gas emissions as a resource the way nature does? Imagine if people were competing to use carbon emissions with the same ferocity they are currently using to pull oil out of the ground and you harness the market to do that? For us, that is a scalable approach. That was the beginning of our mission.”

Herrema decided to name his company Newlight Technologies. He came up with the name “Newlight” looking at how the sunlight hit the trees when he came home in the evening. “There is this image where the sunlight is hitting the leaf of a tree and it takes carbon and turns it into something good. That was our founding mission, our basic concept. Take carbon that is in the air and turn it into a material. Now, we have the carbon capture process and theoretically, it is cost advantaged and we are harnessing an abundant resource,” he says.

What Herrema wanted to do was convert carbon emissions into a bioplastic, more specifically a biodegradable material that would be called Air Carbon. It was a radical thought, but he was not the first to have it. Others had tried to do it before, but there were two main problems — price and performance.

“Basically, it was just too expensive and the stuff they made did not work very well. We had similar challenges,” he says.

How does one make Air Carbon? “People were growing micro-organisms and using them to convert greenhouse gases into bioplastics,” says Herrema.

To begin with, they only managed a ratio of 1:1, meaning that for every pound of micro-organisms, they got one pound of bioplastics. “The problem was that at that kind of yield, we just could not get the economies of scale. And while it was a great concept in theory, in practice, there was nothing you could do with it,” he says.

Herrema gives an example. “If your company uses two billion pounds of plastic per year — and that is not uncommon — and they sell for about US$1 a pound, it is US$2 billion in cost. You go to your boss and say, ‘Hey, I want to do good in the world. Let’s add a few billion dollars to our supply costs.’ It is just not going to happen no matter how green somebody is. That is why this was a non-starter and became the founding point of our mission.”

He put together a team and in 2004, they rented a laboratory near where he grew up in Southern California and started to work on the concepts. “We started with a reactor that you could hold in your hand and then eventually grew to reactors that were really big. Once we had gathered about a year’s worth of data, we raised our first round of capital to build out this thing,” he says.

2007, Newlight had three employees and the end of that year, it had built its first pilot production plant. “At the time, we were turning methane emissions into biodegradable plastics. But the problem was that it was still not cost-effective. So, we kept working. And I am not sure exactly what gave us that sort of crazy level of determination that we had, but we just decided that we were not going to give up,” says Herrema.

In 2010, they finally had a breakthrough. “What we discovered was that the biocatalyst that had been used in the past had a self-limiting feature. When it started to produce the polymer, it would turn itself off. Once we realised this, we tried to figure out what would prevent that from happening. If we could build the biocatalyst in a way where it did not turn itself off, maybe we could get a higher yield,” he says.

“It was a Saturday night, somewhere in the wee hours, and we had an infrared can where we could see the relative ratio of biocatalyst to polymer in our vessel. After all these years of just working this thing and trying idea after idea, for the first time, we saw that — instead of capping out at this 1:1 ratio — we had gone to 1:3.

“Now we were producing three times more polymer than had ever been produced previously. We kept going with that and eventually figured out how to make nine times the biocatalyst weight in polymer. This changed everything for us.”

Newlight’s first generation production line ran to about half a football field in length, roughly 150ft. “After the 9x breakthrough, we reduced this to about 30ft. Our capital cost dropped a factor of 5x. And for the first time, we had the ability to produce bioplastics from greenhouse gas at a cost structure that could outcompete oil-based plastics on price,” says Herrema.

He adds that this last point was extremely important. “To be a hard-core environmentalist, you need to be a hard-core industrialist. What that means is, if you truly want to compete on scale, you have to compete on price.”

To make a fossil fuel-based plastic, you start with refining the oil, then breaking it down into its components. Two of the main components are ethane and propane. Then, you run the ethane into a catalytic cracker and turn it into ethylene.

“Billions are spent on these two steps alone. This is also where most of the cost, energy and pollution come from. Once you have those monomers, you take the ethylene and propylene and run them in a solvent-filled tank and then polymerise it into a white powder. You melt that into pellets and now you have your plastic,” says Herrema.

Newlight’s process is different. “We figured out how to take a greenhouse gas and apply it directly to a polymerisation tank. That means we skip the refining step and the catalytic cracking step and go directly into a single-step process. So, not only have we reduced the operating cost but we have also reduced the capital cost. And if you can imagine the energy savings that goes with that, as well as the carbon savings, it can be pretty dramatic,” he says.

Once they had the basic process lined up, they worked to optimise it. “Performance was the other challenge. One of the earlier products that we started to make or tried to make was chairs. And when we started to make these chairs, part of the factory had to be cleared out because there were fumes and all kinds of stuff and no one knew what was happening. It was not a good day,” says Herrema.

They gradually came to a point where they actually managed to make a chair — just not one you could sit on. “It was so brittle that you could break it with just one hand,” says Herrema.

And then one day, it finally happened. Nothing went wrong. “This was the first really boring day at the plant and boring was something we were striving for. So, we sent a box of early-generation Air Carbon pellets and ran things on automatic for eight hours making furniture. It was a beautiful moment for us,” he says.

To begin with, they used the pellets to manufacture chairs, furniture parts and “gadget-type stuff”. And while they were perfecting the process, others were watching and waiting to come in. “One of our first contacts was IKEA. And then it came in and said, ‘We like what you guys are doing and we would like to use some of your material. We said, ‘That is great, but unfortunately our production capacity is pretty low, so it is not going to be an option’,” says Herrema.

However, he did come up with an alternative solution for IKEA. “I asked the company, ‘What if we could find other plants and retrofit them with our process?’ Our process had become so simple that we basically just needed a big tank that could be stirred, where we could add a greenhouse gas to make our polymer. That was exactly what we did. We found a plant in central California and in August 2013, we turned the plant on.”

this time, the team had been working on this process for 10 years. “We needed it to work. We had been running our pilot plant for a long time and the question had become whether we could do this at scale. Were we industrially relevant? So, we put everything we had into this plant. All the planning, all the prayers, anything that could possibly work,” says Herrema.

They budgeted four to six months before the plant would match the performance of its pilot plant. “But within the first week of operations, we were hitting our targets. I can tell you, having worked on something for so long, there were few more special moments than standing on top of this thing and watching it work,” he says.

Herrema called his mother on the way home. He did not cry on the phone, but he came close. “This was a seminal moment because it meant that we could do this at scale,” he says.

Initially, Newlight was very focused on catching methane emissions. It goes to plants and farms that emit methane, captures and compresses the gas, then transports it to the reactor and runs it through the polymerisation process.

Now, the company has expanded into carbon dioxide. Its first Air Carbon chair was named Innovation of the Year Popular Science magazine. Then it started producing Air Carbon bags for Dell, followed Hewlett-Packard shortly after.

“When we think of packaging, we think of it as a waste material, a necessary evil. What if it could be more? What if packaging was actually part of the solution? What if it was pulling carbon out of the air? What if it was improving the environment? It is a whole new paradigm about how we think about packaging and Dell was one of the first adopters,” says Herrema.

The company was now moving up in the world. It has made mobile phone cases for Virgin and Sprint. “For the first nine years of Newlight’s life, we had no website and no public interaction whatsoever because we said that until we had a technology that worked really well, there was just nothing to talk about,” he says.

However, once the company had a product that worked, it was time to talk about it. “I remember the first talk I gave. It felt like I had been in a cave for about a decade. I was exceptionally nervous. Things have gotten better since,” says Herrema.

When companies heard what Newlight had achieved, there was a wave of demand. “In 2015, we had another pivotal moment — a contract with a company called Vinmar [which does petrochemical marketing and distribution]. It buys a lot of oil and plastics from companies such as Exxon and it took out a £19 billion contract with Newlight for Air Carbon. What that means is that most of our supply that we can produce over the next many years is already prepaid,” he says.

This started a chain of events. Newlight signed two more big contracts after that. “The second was a £10 billion production licence with IKEA. Instead of just being a buyer, it decided that it wanted to make the material itself,” says Herrema.

“Think about this for a second. This is a different supply chain model. Instead of buying plastics from others, the company is talking about making the product itself and in the process, harnessing its supply chain to do some environmental good. So, what IKEA is hoping to do with this production licence as it ramps up can actually tell quantifiably how much environmental good it is having.”

It has been a long journey, but Newlight has not lost sight of its original purpose — to address the climate change issue. “Climate change is really just a metaphor. The human story is very much about how we have these things in our lives that sometimes feel like they cannot be changed, whether it is relationships or health. And we have discovered that one of the things that is really important to us is showing that the future is not set,” says Herrema.

“People look at climate change as an example and I think if a lot of us are being honest, if we think it is happening, then we also probably wonder whether we are really in a position to stop it. Or whether we just kind of need to live with it and deal with it. And the difference in terms of how that comes to light are the choices we make. It is how we frame it.”

He is very excited about what Newlight is doing because of the potential to have a massive environmental impact. But his intentions for the company go deeper than that.

“I also hope the product can be a source of inspiration for people. If greenhouse gas, which was thought to be this villain, has something really beautiful inside that we can bring to life. What is inside of us? What can we bring to life that we did not think was possible?” says Herrema.