Biobased Chemicals and Products: A New Driver for Green Jobs

I. OVERVIEW

Historically, the U.S. chemicals and plastics industry was the envy of the world. At its peak in the 1950s, the industry was responsible for over 5 million U.S. jobs and a $20 billion positive trade balance for the United States. Jobs associated with the industry were typically among the highest paid in U.S. manufacturing.

Over the last two decades, competitive advantage for chemicals and plastics manufacturing has shifted towards the Middle East and Asia, as has the industry. U.S. employment in the sector has dropped over the last decade and is projected to shrink further as capital investment for the petroleum-based industry has essentially shifted away from the United States.

Biobased chemicals and plastics represent a historic opportunity to reverse these trends through the creation of a new generation of renewable, sustainable products developed and produced in the United States. Biobased chemicals and plastics — often referred to as biobased products— are virtually the same as their petroleum-based counterparts, but are manufactured from renewable resources. Recent advances in biotechnology are now making it possible to manufacture many traditional chemicals — and many promising new alternatives— from renewable biomass instead of petroleum.

Biobased products can supplement or replace a wide variety of petroleum-based products, and the United States has a substantial potential competitive advantage in their manufacture:

• We are home to much of the world’s leading industrial biotechnology, which enables the creation of a wide range of biobased products;
• We have a very strong agricultural sector with the largest amount of arable land in the world;
• We are the largest chemicals and plastics market in the world; and
• Much of the downstream industry for biobased products (e.g., converting, logistics, warehousing) is already in place.

A growing number of early stage successes across a wide range of biobased products indicates this sector has tremendous potential. Even in its nascent state, the biobased products industry accounts for over 5,700 direct jobs, and is likely responsible for over 40,000 jobs economy wide. Achieving the industry’s full potential could create tens of thousands of high-paying green jobs in the United States within the next five years.

The biobased products sector should be nurtured so that its benefits can be realized in the United States. Economic development impacts will include the creation of high-valued green jobs, an improved trade balance, the reduction of greenhouse gas (GHG) emissions and enhanced energy security through reduction of dependence on imported foreign oil.

To foster growth of the biobased products sector in the United States, federal policy should provide strong support for research, development and commercialization of innovative biobased products, including grants and loans for construction of biorefineries, a strong biobased markets program, and tax incentives for pioneering commercial production.