1

**1. GLYCEROL**  **i. Projection on Market and Demand for Glycerin from 2006 to 2022**  Supply o f glyc erin as a pure by-product (since the sy nthetic production has now been ceased) is entirel y determined by external factors. Gl yc erin demand has no influence on the glycerin output instead the prices adjust to bring the demand into line with supply . The growth of oleochemical gl yc erin has been dwarfed by the volume of glycerin that has been produced by the biodiesel in the past decade. Figure 1. projecting crude gl yc erin availability f orward to 2020, is striking in its depiction of the volume growth that is expected in the next decade. Crude gl yc erin volumes are forecast to grow from 1.08 million tonnes in 2004 to 5.45 million tonnes in 2020, predominatel y as a result o f increased output as a by-product of biodiesel production (Fry, J., 2010) . In assessing glyc erin volume forecast to be generated by i ncreased oleochemical production, assumption has been made that after 2009 any additional fatty

alcohol capacity

that may be built will utilize fatty acids as their primary

f eedstock and therefore not generating any further supplies of gl yc erin.

Source: Fry, J., (2009), Report: The Outlook for Oleochemical to 2020: Opportunities in a Changing Sector, LMC International, 200 9

Figure 1: Global Crude Glycerin Production by Sector, 1980

– 20202

Shown in Figure 1, biodiesel has already grown sufficiently to outstrip the gl yc erin volumes derived from oleochemicals and this structural shift is not expected to reverse itself. On the contrary, crude gl ycerin volumes generated from biodiesel are forecast to grow almost three fold, from 1.4 million tones in 2008 to 4.3 million tones in 2020 (Fry, J., 2010) . In comparison, combined fatty

acid and alcohol related crude glyc erin supply i s only expected to grow by

0 .2 million tonnes in the same period. It is this explosion of crude gl yc erin production that will pose the greatest challenge for the gl yc erin sector in the coming decade. Potentially, in the shorter term out to 2013, there could be a glut of crude gl yc erin before the new technical applications can consume large volumes. However, the stalling of biodiesel production in Europe in 2008 has eased that prospect. It is estimated that, in 2008, in the region of 125,000 - 150,000 tonnes of gl yc erin were used in the sy nthesis of epichlorohydrin and propylene gl ycol. These volumes are projected to rise to 700,000 tonnes in 2012, assuming current plans are implemented in full and the global recovery has begun (Fry, J., 2010) . It is these anti cipated that over the long term, substantial increases in both crude and refined gl yc erin volumes will be consumed by increased markets in gl ycerin’s traditional enduses as a food, personal care and pharmaceutical ingredient and novel chemical application s. The new applications are made more attractive b y removing the need to refine the gl yc erin. **ii. Current Application of Glycerin and Their Products**  Glycerin is not poisonous to humans, so it is widely u sed in foods, pharmaceuticals and cosmetics. Some of the current reported applications are:  Solvent for preparation of concentrated flavor extracts, texture improver, emulsifier and sugar substitute. It also functions as conditioner in wine gums, fondants, soft creams and pastilles.  Glycerin is als o applied as fruits and vegetables preservatives to keep them in fresh conditions.  Esters of gl ycerin with acetic and tartaric acid are used as emulsifiers in bread production.3

 Inc osmetic formulation especiall y in skin lotion to give moisturizing effect and relieve chapping. It functions mainly as emulsifier, emollient, and conditioning agent.  Hair shampoos utilize glyc erin to make them flow easier when poured from the bottle. Glycerin may

be added to give shiny

transparent effect to the soap bars.  Glycerin is also utilized as mild laxative in suppositories and applied as softener in gelatin capsules.  Glycerin derivative, gl yc erol trinitrate, is an important drug for heart disease treatment. Glycerol methacrylate is used in the manufacturing of soft- lenses to make them permeable to air.  In the production of phthalic and maleic alkyd resin and in cross - linked polyesters from mono - and dicarboxyl ic acids and pol yol.  Polyether pol yols of glyc erol in combination with propylene - and ethylene oxide are poly merized with diisocyanates to form flexible or rigid pol yurethane foams.  Glycerin also serves as a moisturizer and plasticizer in cellulose films.  Intobacco industries, gl ycerin serves as solvent for tobacco flavor compositions. It is also applied as humidifier and plasticizer for tobacco to prevent the leaves from becoming brittle and crumbling during drying.  In order to avoid contamination in foods, drugs, and cosmetics manufacturing, glyc erin is preferred as lubricant compared to oil.  Glycerin acts to reduce friction in pumps and bearings.  Glycerin is also used as lubricant in textile industries. Inks and printing colors contain gl yc erin to prolong their self - life.  Glycerin is also employed in adhesives and glues to keep them from very f ast drying. In paper industries, gl yc erin acts as humidifier, plasticizer, and lubricant. Figure 2 shows market shares of gl yc erin application. Glycerin is mostly a pplied in soaps, cosmetics and pharmaceuticals industries. These applications contribute to 37% of market share. Alkyd resin and food applications are followed with 13% and 12%, respectivel y. Eleven percent of gl yc erin capacities go to pol yurethanes industry . Tobacco application also has important role, holds 9% of total market share. Minor amount is used for explosive industries.4 

## Glycerine A**pplications**

15% 3% 9% 11%

12% 13% 37%

Others Explosive Tobacco Polyurethanes

Food Alk yd resin Soap, cosm etic, pharm .

Source: Suyenty, E., Sutanto, E. and Li e, A., (2009), Applications of Basic Oleochemicals: Old & New , PIPOC 2009

Figure 2. Applications of glycerin **iii. Substitution of Glycerin from Petro**  **- based With Natural** **- based**  Crude gl ycerin from a conventional FAME unit contains a range of impurities, most of which will have an adverse effect on downstream processes and products. They arise both from the natural triglyceride background and, more significantly f rom the methanolysis process itself. Fat splitter gl ycerin is somewhat cleaner but does contain components which can poison the ty pe of catal ys ts ty

picall y used in hydrogenation processes. There is no doubt that, whichever process is used for the conversion of gl ycerin to propylene gl ycol (PG) it will be necessary to remove these impurities at some stage as their presence in the final product would be unacceptable. The best place for removal is in the upstream. The nature of the chemistry involved in the gl yc erin -based route is such that it is inevitable that the resultant PG will be different in detailed composition to that produced from conventional prop yl ene oxide hydration. One obvious example is that conventional PG contains traces of di -prop yl ene glyc ol; where glyc erin based material does not. On the other hand, PG5

from the hydrogenol ys is of gl yc erin contains minor amounts of ethylene glycol. This is a feature common to all bio - derived products

– they m ay m eet the “headline” commodity specification, but they will be different, and therefore effort is required to introduce them into the market. **iv. New Application on Glycerin**  Some of the reported new applications of gl ycerin are:  Ethylene gl yc ol in anti - freeze  Polyols in coating resins  Monopropylene gl ycol in animal feeds  Glycerin Tertiary

B utyl Ether (GBTE) as potential additive for diesel (similar to the MTBE derived from methanol). MPOB has the process and currentl y the scale -up study is in progress.  Surfactant in microemulsion system either oil in water or w ater in oil  Solvay

w as the first manufacturer that started production of epichlorohydrin from gl yc erin in 2007. Epichlorohydrin is used as building block in epoxy resins, elastomers, and s ynthetic gl yc erol production.  Glycerin for acrolein production and applied in the preparation of acrylic acid, polyester resin, pol yurethane, prop yl ene glycol, and acrylonitrile.  Glycerin may

be converted to renewable fuels via cracking process to hydrocarbons.  Eicosapentaenoic acid (EPA), may also be synthesized from crude glycerin by enzy matic process using Pythium irregulare (INFORM, 2009) . Consequently, novel, high volume and technically b ased applications have been developed. Notable novel applications to date have been awarded the annual Glycerin Innovation Award by

the Soap & Detergent Association and National Biodiesel Board (Fry, J ., 2010) . The past three prizes are briefly outlined below:6

 2007: Solvay

w as awarded the prize for its application of gl ycerin as a feedstock for the production of epichlorohydrin. This was a radical turn around because sy nthetic gl yc erin had previously

been derived via a s ynthetic epichlorohydrin route.

 2008: Researchers from the U.S. Department of Agriculture (USDA) were honoured for gl yc erin derived surfactants and pol ym ers, which are not only p roduced from renewable resources, but are also biodegradable.

 2009: Pittsburg State University in Kansas received the prize for research that has led to the development of a novel famil y of gl yc erin -based pol yols to be used in rigid poly urethane foams.

**v. Volume of Glycerin Production (2010**  **- 2022)**  The regional breakdown in crude gl yc erin production is depicted in Figure 3 and it is obvious that Europe led the trend in volume growth associated with the biodiesel at the start of the century . In the coming decade the regions expected to experience the most significant growth in the production are South America, South East Asia and China. This regional pattern of gl yc erin generation is a reflection of global biodiesel production as well as the shift from Western oleochemical production to Asia. Approximately 1 0 lbs of gl ycerin (also known as gl yc erol) are produced for each 100 lbs of biodiesel fuel. Crude gl ycerin contains water and impurities. Refined gl yc erin is highly purified, such as th e 99.7% pure USP grade.7

Source: Fry, J., (2009), Report: The Outlook for Oleochemical to 2020: Opportunities in a

Changing Sector, LMC International, 2009 Figure 3. Crude glycerine production by region (1980- 2020) Mean while, the overall regional suppl y of refined gl yc erine was projected to hit close to 600,000 tonnes this year, 2010, while demand would just be at roughl y half of the total, based on estimates of a major global trading firm. The demand for refined gl yc erine would grow at a slower pace of 5.8% this year to 280,000 tonnes compared to the 8.6% increase in 2009, industry sources said. Malaysia is the biggest producer of the material in Asia, with an estimated production of 190,000 tonnes this year. Indonesia comes in second with a forecast out put of 163,000 tonnes, while China ranks as the third biggest producer with a projected capacity o f 140,000 tonnes, based on industry

e stimates. The Philippines and Thailand would have a combined capacity of 50,000 tonnes of refined gl yc erine this year. Th e capacity figures do not take into account suppl y coming from biodiesel production. Biodiesel plants in Asia are currently running at just 5% of capacity, which translates to 39,320 tonnes of gl yc erine supply f or this ye ar, according to8

industry e stimates . If biodiesel plants were running at full capacity, they w ould generate 786,400 tonnes of the b y-product. Crude gl yc erin must be refined in order to be suitable for currently e stablished end-use applications in the food, personal care and pharmaceutical s ectors. Figure 4 shows that global refined glyc erin volumes by s ector out to 2020. These estimates are based on the following assumptions:

 Oleochemicals and soap associated gl yc erin production will be 100 % refined  By 2 012, an estimated 75 % of crude gl ycerin derived from biodiesel produced by multifunctional companies will be refined  An estimated 50 % of smaller biodiesel producers will refine their crude gl ycerin production

Source: Fry, J., (2009), Report: The Outlook for Oleochemical to 2020: Opportunities in a Changing Sector, LMC International, 2009

Figure 4. Global refined glycerin volumes by sector, 1980- 20209

The figure reveals that by 2 020 it is expected that an estimated 3.53 million tones of refined gl yc erin should be produced annuall y. This represents 65 % of crude glycerin production and the remaining 35 % that is not refined should arise from smaller biodiesel plants. **vi. Conclusions**  Glycerin has faced a considerable challenge since the biodiesel industry has grown in size and the industry

c ontinues to grapple with how to best apply the potential solutions. H owever, it is gl yc erin’s versatility

a s a molecule with a my riad of added value applications, as well as its ‘green’ credentials, that it should be able to reinvent itself as a margin ba sed commodity, as opposed to being merely ab iofuel waste disposal problem, which pulls down oleochemical gl yc erin prices by

association.

 Naturall y, some gl yc erin will continue to be disposed of in low value application, such as burning. This should only occur where the crude gl ycerin is of low quality, or is available in limited volumes, or is logistically too isolated to find customers. In all these cases, such supplies should have little influence on the wider market.

 Furthermore, it is probable that new technologies will create the means necessary to convert such ‘low value’ gl yc erin into a biofuel for use in - house.

 Prices are not expected to remain at the recent low levels and the price correction process should begin in line with the global recovery . In short term, the global recession will continue to depress both prices and demand, making 2009

– and potentially 2 010

– challenging for sellers of gl yc erin.

 Prices are under severe pressure and producers will experience a steep decline in their gl ycerine revenues over the forecast period. Price is the determining factor in the majority of end user sectors; however quality i s fundamental in the main sectors such as pharmaceuticals, personal care and food.10

 New applications are needed for both refine d and crude gl yc erin and prices need to compete with prop yl ene, sorbitol and other alternative chemicals. One possible threat to the emergence of novel chemical outlets for technical grade gl yc erin is that governments withdraw their economic and political support from the biodiesel industry . I f biodiesel output were to fall, glyc erin supply w ould follow suit, and markets would do their traditional job of rationing demand b y raising prices. However, gl ycerin is well placed to meet the more likel y challeng es of further large increases in supplies. In particular, the development of new high volume industrial applications should meet the future high suppl y of glyc erin. Although, it must be stressed that gl ycerin will always be vulnerable to short term imbal ances and the resultant price cycles. In the coming decade, it will be important to see how the demand from new technical applications matches the increases in gl yc erin supplies. Ap ossible solution to imbalances would be the creation of joint ventures between biodiesel plants and chemical manufacturers to ensure some form of equilibrium between large step changes in both demand and supply . This strategy s hould provide the feedstock supply s ecurity f or a chemical manufacturer to invest the sums needed to build a gl ycerin consuming plant, whilst ensuring the biodiesel company has a guaranteed outlet for its gl yc erin b y-product output. **References** Frost & Sullivan (2001). The Wo rld’s Fatty Acids Industry: Feedstocks, Derivatives, and Endproducts, 1997- 20 02 - 2007. Fry, J., (2010), Report: The Outlook for Oleochemical to 2020: Opportunities in a Changing Sector, LMC International, 2009 Heming, J., (2007), Wo rld Glycerine Market up to 2010, with Emphasis on New Uses for Glycerine , PIPOC 2007.11

Lawrence, R.C., (2009), Glycerin to Propylene Glycol , PIPOC 2009 Rupilius, W., And Ahmad, S. (2006). The Changing W orld of Oleochemicals . Seng S., (2010), Asian Glycerine Supply to Remain In Glut; Prices under Pressure , www.icis.com Suyenty, E., Sutanto, E. and Lie, A., (2009), Applications of Basic Oleochemicals: Old & New , PIPOC 2009 http://en.wikipedia.org/wiki/Glycerin_soap , (May 2010) http://www.soyatech.com/news_story, (May 2010) http://www.asasea.com , (May 2010)12

**Exports of Gly cerin**  **from Malay sia**  **Year Volume (Tonnes)**  **Major Destinations** 2006 216,529 U SA, China, P.R, Japan, EU 2007 246,321 China, P.R, USA, Japan, EU 2008 217,044 USA, China, P.R, Japan, EU 2009 237,589 China, P .R, USA, Japan, India 2010 (Jan/Apr) 68,825 China, P.R, USA, Japan, South Korea