It's not everyday that one comes across a technology that has the potential to create so much decarbonization impact while requiring so little changes to existing processes. I had the privilege of talking with Fredrik Malmfors, the CEO of Lignin Industries, to explore how his company sets foot in tackling the carbon footprint of one of the most ubiquitous modern day product -- plastics.
Before diving into the interview, let me first provide some context. Lignin Industries has produced a ground-breaking, carbon-negative bio-based plastic-alternative called Renol®, which is a thermoplastic version of lignin mixed with bio oil. This can be mixed in with large plastic polymer families like polyethylene (PE), polypropylene (PP), ABS and polyester, to reduce the fossil-based concentration of these plastic products. The resulting blends have stable properties, are fully recyclable, and has a disproportionately lighter carbon footprint.
You can also watch our short feature video here: https://youtu.be/iiKlnPJSDeI
Enjoy my conversation with Fredrik!
Could you share a bit about your journey to Lignin Industries and what drew you to the plastics industry?
Fredrik: My career began in management consulting at Accenture, where I focused on supply chain projects across various sectors for over 17 years. Later, I led the supply chain for a major Swedish food manufacturer, Lantmännen, for almost 10 years. My interest in sustainability and the potential for significant environmental impact drew me to Lignin Industries. The opportunity to join early in a dynamic company where I could directly influence change was particularly compelling.
What problem is Lignin Industry addressing today?
Fredrik: The core issue we tackle at Lignin Industries is to reduce the environmental impact of the plastic industry. Our solution, Renol®, addresses this by replacing up to 40% of traditional plastics with a biobased alternative derived from lignin. This not only reduces reliance on non-renewable resources but also significantly decreases the carbon footprint of plastic products.
Who are your target customers?
Fredrik: From compounders to converters, any company dealing with the plastic polymers are our target customers. Since our material can replace a wide range of plastics, it makes our potential customer base extensive. So any company in the industry that needs to reduce their Scope 3 emissions, and are looking for bio based materials, are on our our potential customer list.
How are companies in the plastic industry currently tackling their environmental issues?
Fredrik: Most companies are currently focusing on recycling efforts. While there have been attempts at scaling bio-based materials, challenges like technical difficulty, cost and low legislative pressure have hindered progress. Also, the solutions developed so far have not really delivered at the expectations of the industry yet.
Do you think things are changing? Especially in terms of regulatory pressure and the willingness to pay premium prices from potential customers?
Fredrik: The short answer is yes. The shift is happening due to multiple factors. One, bio-based materials are becoming more prevalent at scale and have the potential for further scalability. They are also catching up in terms of efficacy.
Secondly, the industry is at a turning point, largely due to increasing regulatory pressures and market demand for sustainable alternatives. Directives like the The Packaging and Packaging Waste Regulation, Green Claims Directive, and upcoming new packaging directives are pushing for a combination of recycled and bio-based materials at minimum levels, which is challenging the traditional plastic industry. This indicates a faster pace of change ahead.
Are these changes consistent worldwide, or are they more pronounced in certain regions?
Fredrik: We're seeing global shifts, though Europe is our primary focus. Interestingly, regions like North America are sometimes ahead, with initiatives from the Biden administration pushing for significant environmental reforms. Even in South America, there are movements towards reducing carbon emissions and increasing the use of biobased materials. So I think EU is actually a bit behind in terms of legislation, and much of the momentum being driven by major consumers of plastics such as the automotive industry and others.
Can you give us some examples of the end-market applications or products your company is working on?
Fredrik: The most obvious example is net zero e-commerce bags (which is the outer packaging of an e-commerce delivery), which combines the productivity advantages of plastics with environmental benefits of paper. It's based on our material Renol®, fully recyclable, has net zero emissions, and is gaining traction with customers. We started with fashion brands but will probably move to other e-commerce sectors as well.
We're also developing casings for chargers, the hard plastics on vacuum cleaners, and inner parts of heat pumps.
For Polypropylene (PP), you can by mixing in Renol® replace up to 40%, and thereby cutting more than proportionately the carbon footprint -- while retaining the intended product properties. This blend is still fully recyclable. For PP we are looking at different applications like plastic pallets, industry equipment for automated warehouses, trays and different foldable items that typically circulate in those environments.
So, Fredrik, what sets your material apart from others in the market?
Fredrik: Our focus is on replacing fossil-based plastics while adapting to the needs of the plastic industry. We aim to provide a drop-in material that maintains processing efficiency and delivers consistent, strong material properties. So processability is one of our biggest differentiators.
In fact, you can mix in between 15-40% of our material and the blend retains its expected characteristics. Contrast that with many of the other biobased materials in the market, which can only replace 2-5% of the plastic polymers before the characteristics go haywire. In this way, we can replace a lot of the fossil-fuel based plastic polymers.
Secondly, since lignin is an antioxidant, adding it to polymers like polyethylene (PE) and polypropylene (PP), it halts their deterioration and improves their recyclability in the standard recycling processes.
Thirdly, I know we haven't gotten to that part yet, but lignin is one of the most abundant biopolymers on earth. It is currently just burnt away as a waste product in paper mills. The material is highly scalable, so that is also one of our key strengths.
Interesting. Speaking of scalability, how scalable exactly is your production?
Fredrik: Our current production capacity is 2000 tons per year, and we plan to scale our business to 30 000 tonnes by 2028. We have a solid pipeline of customers across various applications. With the abundance of lignin as a raw material (>100 million tonnes), we have significant scalability potential. We plan to collaborate with external production partners initially and may consider building larger facilities in the future if needed.
How do you measure the overall environmental impact of your products? Do you have external certifications for this?
Fredrik: We have a third-party verified Life Cycle Assessment (LCA) showing a -1.9 kg / kg product (Cradle-to-Gate), which is calculated according to ISO standards.
In terms of waste in our process, since we are valorizing a waste material -- we take 90% of lignin and add 10% bio oil, we don't really have waste in our process. The only by-product is water in the form of steam, but even that is extremely low.
Land use and resource efficiency wise: land use is low as we primarily use secondary materials, and our resource efficiency is excellent (again, because we are valorizing a waste product).
Moving on to your business models, are you planning to pursue other models like technology licensing or partnerships?
Fredrik: We're keeping everything open. Our model is not capital-intensive, so we have flexibility in different setups compared to other bio-based materials that require large investments. We may take multiple paths depending on the market, polymer, and growth speed.
Understood. Looking into the future, is there any particular industry you would like to target?
Fredrik: For now, we're targeting high-value applications in the packaging industry. As the price of producing fossil-based plastics increases, we can expand into broader applications. 14% of global plastics goes into cars, buses and trucks, so automotive is an interesting area for us.
If a company wants to engage with you, what kind of support can they expect?
Fredrik: We provide thorough support, sending applications specialists to assist customers when they try our material for the first time. We have detailed documentation and samples for testing purposes, such as tensile testing and impact strength.
Great. Is there anything else people should know about Lignin Industries?
Fredrik: Our scalability and ability to incorporate a significant amount of material into end products sets us apart. We're driven by the goal of providing a highly processable replacement in the plastic industry.
Thank you, Fredrick!
