The Cellulose Gap

1

The Cellulose Gap

Franz Martin Haemmerle

“The Cellulose Gap”

(The Future of Cellulose Fibres)


Updated: Sept. 2011

2

The Cellulose Gap


Population Growth

Need for Food and Textile Fibres

Availability of Arable Land

0%

21%

42%

63%

84%

0%

12%

24%

34%

43%

0% 6%

11% 16%

20%

0%

-1.2% -2.5% -3.7% -4.9% -15%

0%

15%

30%

45%

60%

75%

90%

2010 2015 2020 2025 2030

Gro

wth

re

sp

. D

ec

lin

e in

%

Textile fibres demand

Food demand

Poulation

Arable land

3

The Cellulose Gap


Thomas Robert Malthus: “The Principle of Population“

In 1798, Malthus (*1766, 1834), an English economist, wrote in his “Essay on the Principle of Population”: “Population, when unchecked, increases in a geometrical ratio, but subsistence increases only in an arithmetical ratio.“

Point of crisis

(hunger beyond

this point?)

Food production rate:

arithmetic growth

Population growth rate:

geometrical or exponential growth

4

The Cellulose Gap


Thomas Robert Malthus: “The Principle of Population“

This publication roused a storm of controversy. Malthus failed to foresee the astonishing development of transport and colonisation which took place in the 19th century and which increased so enormously the area from which foodstuffs and raw materials could be drawn. With the advent of the progressive agribusiness (“Post-war Green Revolution”), the use of synthetic fertiliser, pesticides, state-of-the-art irrigation systems and today the genetic engineering were the driving forces for the exponential growth of the food production.

5

The Cellulose Gap


But today, 200 years later, Malthus’ theory wins a certain confirmation, because the number of malnourished people is growing. The world population growth is outpacing the food supply.

Source: United Nations Statistic

Percentage of Population affected by Undernourishment by Country

Malthusians Misery’s Comeback

6

The Cellulose Gap


Today more than 1 billion people are hungry

Asia and the Pacific, 642

Sub-Saharan Africa, 265

Latin America and the Caribbean,

53

Near East and North Africa, 42

Developed countries, 15

Source: FAO

2009: in million people

In 1996, world leaders attending the World Food Summit in Rome committed themselves to half the number of undernourished people by 2015. In 1996 we had 825, but today we have more than a billion undernourished people.

7

The Cellulose Gap


Arable Land

Of the earth’s 149 million km² of land, approximately 17.3 million km² are cultivated.

Arable land: 10.6 % = 15.8 mill. km² Planted with permanent crops: 1.0 % = 1.5 mill. km²

Arable land is land cultivated with crops that are replanted

after each harvest, like all sorts of grains, sugar or cotton. (= annual plants)

Permanent crop land is land cultivated with crops that are

not replanted after each harvest, like citrus, coffee or rubber. (= perennial plants)

The remaining 132 million km² are permanent pastures, forests, barren land and built-on areas.

8

The Cellulose Gap


12.60

12.80

13.00

13.20

13.40

13.60

13.80

14.00

14.20

19

61

19

62

19

63

19

64

19

65

19

66

19

67

19

68

19

69

19

70

19

71

19

72

19

73

19

74

19

75

19

76

19

77

19

78

19

79

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

Arable land (in million ha)

moving – 5 years – average

Source: FAO

9

The Cellulose Gap


Loss of Arable Land

Arable land is currently being lost at the rate of 10 to 20 million hectares per year, caused by desertification, salinisation and urbanisation. Urbanisation alone is responsible for about

3 - 4 million hectares

In 1960 worldwide approximately 4,400 m² of arable land per capita was available, 30 years later merely 2,700 m² and in 2025 most probably only 1,700 m².

Agricultural land is constantly losing soil and fertility,caused by wind and water erosion, nutrient depletion and chemical pollution..

4,400 m²

per capita

2,700

m² p.c.1,700

m² p.c.

3.0 billion5.3 billon

8.0 billion

1960 1990 2025

To secure food production more arable land would be necessary !!

10

The Cellulose Gap


Agricultural Yields

Future production increases can only be reached by an enhancement of the yield per area and not by an expansion of the area.

Intensification of the production requires a much higher input of inorganic fertilisers and pesticides as well as a substantial improvement of the irrigation systems. But ironically all these efforts decrease the yields in the long run.

With an ecological cultivation the inputs of synthetic fertilisers and pesticides can be reduced or avoided, but the yields will be much lower.

11

The Cellulose Gap


Yield / Genetically Modified Crops

The only practical method to reduce the input of pesticides and to increase the yield at the same time is the use of genetically modified crops. Several of the important crops are already genetically engineered

soybeans, maize, cotton and canola (a variety of rapeseed).

Genetic engineering is an absolute necessity for the nutrition and for the environment !!

12

The Cellulose Gap


Global Adoption Rates for Principal Biotech Crops (2010; in % and in million ha)

Over the last years the area planted with gene-modified crops is growing by 10 million hectares p.a. and has reached 148 million hectares in 2010.

73

21

46

7

17

12

112

24

0

20

40

60

80

100

120

140

160

180

81%Soybean

64%Cotton

29%Maize

23%Canola

mil

lio

n h

ec

tars

Conventional

Biotech

Source: ISAAA

13

The Cellulose Gap


Genetically Engineered Crops

Genetic engineering offers faster crop adaptation as well as a more biological, rather than a chemical approach to yield increases. Refusing genetic engineering makes the food problem even more daunting. People have been genetically modifying plants for more than 10,000 years.

“Genetic engineering is nothing else as the shortening of the evolution.”

14

The Cellulose Gap


Conclusion

In the near future we will have a desperate shortage of fertile farmland.

Arable land on which non-food crops are growing today has to be used more and more for food crops in the future. Food crops should be used for feeding people, not for

animal feed or bio-fuels.

15

The Cellulose Gap


Cotton: Harvested Area 1945/46 – 2010/11 Over the last 60 years the area – on which cotton was grown – fluctuated between 29 and 36 million hectares. The area will be dependent upon the prices for food and cotton, but will certainly shrink in future.

28 million ha ?

Source: USDA

36.0

29.3

35.9

20

22

24

26

28

30

32

34

36

38

million hectars

= 1.8 -2.3% of arable land

16

The Cellulose Gap


Cotton: Decline of planted areas

In many countries the cotton growing area is declining; e.g. in the States.

Source: USDA

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,00019

83/8

4

19

84/8

5

19

85/8

6

19

86/8

7

19

87/8

8

19

88/8

9

19

89/9

0

19

90/9

1

19

91/9

2

19

92/9

3

19

93/9

4

19

94/9

5

19

95/9

6

19

96/9

7

19

97/9

8

19

98/9

9

19

99/0

0

20

00/0

1

20

01/0

2

20

02/0

3

20

03/0

4

20

04/0

5

20

05/0

6

20

06/0

7

20

07/0

8

20

08/0

9

20

09/1

0

20

10/1

1

mil

lio

n h

ec

tars

Cotton farmers in the US, in China and in Europe can only survive with the help of subsidies.

17

The Cellulose Gap


Cotton: Yield 1945/46 – 2009/10

For the next two decades the yield will certainly increase, because of the intensified cultivation of genetically modified cotton.

925 kg/ha ?

China

India

US

Pakistan Uzbekistan

Brazil

12.0%

31.6%

22.7%

9.5%

5.4%

3.8%

%

Yield in 2009/10

and share (%) of

global production

Source: USDA

18

The Cellulose Gap


Cotton: Production 1896/97 – 2010/11

Source: USDA, ICAC

26.5

0

5

10

15

20

25

30

million metric tons

19

The Cellulose Gap


Future Production of Cotton

arable land is declining or deteriorating

land loss and soil degradation

area for food has to be expanded the cotton production sinks because more and

more farmers decide to cultivate plants which contribute to the nutrition and bring higher and primarily safer incomes

In future less land will be available for cotton growing !!

20

The Cellulose Gap


Assumption of Cotton Production for the next two Decades

Year Area mill. ha

(assumption)

Yield kg/ha

(assumption)

Theoretical maximum production

mill. metric tons

2015 31.0 850 26.35

2020 30.0 875 26.25

2025 29.0 900 26.10

2030 28.0 925 25.90

When the planted area drops to approximately 28.0 million hectares until 2030 and the yield increases to 925 kg/ha, the maximum possible production of cotton will be around 26 million metric tons per year.

Cotton Year

2009/10

2010/11

2011/12

Production (in mill. tons)

22.0

24.9

26.9

Consumption

25.3

24.4

24.7

Source: ICAC projection (Sept. 1, 2011)

21

The Cellulose Gap


Cotton Price

During the last two years the price has risen strongly. With the stagnation or with the decline of the production the price will even out certainly above the 10-year average of 60 cents/lb.

Source: National Cotton Councils of America

Season average: 2008/09 62 cents/lb

2009/10 78

2010/11 164

64.13

37.22

76.77

48.60

81.54

51.50

229.6

114.1

20

70

120

170

220

Jan

-01

Ap

r-01

Jul-

01

Oct-

01

Jan

-02

Ap

r-02

Jul-

02

Oct-

02

Jan

-03

Ap

r-03

Jul-

03

Oct-

03

Jan

-04

Ap

r-04

Jul-

04

Oct-

04

Jan

-05

Ap

r-05

Jul-

05

Oct-

05

Jan

-06

Ap

r-06

Jul-

06

Oct-

06

Jan

-07

Ap

r-07

Jul-

07

Oct-

07

Jan

-08

Ap

r-08

Jul-

08

Oct-

08

Jan

-09

Ap

r-09

Jul-

09

Oct-

09

Jan

-10

Ap

r-10

Jul-

10

Oct-

10

Jan

-11

Ap

r-11

Jul-

11

US cents/lb "A" Index (Jan 2001 - Aug 2011)

22

The Cellulose Gap


Cotton Price – FAO Food Price Index

The FAO Food Price Index (2002 – 2004 = 100%) shows a similar trend.

Source: National Cotton Councils of America

20

70

120

170

220

Jan

-01

Ap

r-01

Jul-

01

Oct-

01

Jan

-02

Ap

r-02

Jul-

02

Oct-

02

Jan

-03

Ap

r-03

Jul-

03

Oct-

03

Jan

-04

Ap

r-04

Jul-

04

Oct-

04

Jan

-05

Ap

r-05

Jul-

05

Oct-

05

Jan

-06

Ap

r-06

Jul-

06

Oct-

06

Jan

-07

Ap

r-07

Jul-

07

Oct-

07

Jan

-08

Ap

r-08

Jul-

08

Oct-

08

Jan

-09

Ap

r-09

Jul-

09

Oct-

09

Jan

-10

Ap

r-10

Jul-

10

Oct-

10

Jan

-11

Ap

r-11

Jul-

11

US cents/lb

80

100

120

140

160

180

200

220

240

in %

23

The Cellulose Gap


World Population Prospects

Growth of World Population (2005 – 2030)

Source: World Population Prospects (Medium Variant);

United Nations, Population Division;

The 2008 Revision Population Database.

During the next 20 years the world population will increase by 1.4 billion people.

1.4 billion

24

The Cellulose Gap


Fibre Consumption per Capita (1900 – 2010)

2nd World War

in 10-annual steps in 5-annual steps in annual steps

Economic Crash

25

The Cellulose Gap


Future Textile Fibres Consumption 2010 -2030

(assumption for 2015 – 2030)

Future Per Capita Textile Fibres Consumption 2010 - 2030

(assumption for 2015 - 2030)

Income and population growth are the major factors driving increases in textile consumption. Over the next 5 years the per capita fibre consumption will grow around 2.5% p.a., in the following years the growth rate will decline to 1.5%.

26

The Cellulose Gap


Historical and Future Development

of Fibre and Filament Consumption

Year Wool Cotton Man-made

cellulosic fibres

Synthetic

fibres

Total %-age of

cellulosic fibres

Historical Data

1900 0.7 3.2 0.0 0.0 3.9 82.1

1920 0.8 4.6 0.0 0.0 5.4 85.2

1940 1.1 6.9 1.1 0.0 9.1 87.9

1960 1.5 10.1 2.7 0.7 15.0 85.3

1980 1.6 13.8 3.5 10.8 29.7 58.2

2000 1.4 18.9 2.8 28.4 51.5 42.1

2005 1.2 24.8 3.3 37.0 66.3 42.4

2010 1.2 21.8 4.2 45.3 72.5 35.9

Future (assumption)

2015 est. 1.2 26.4* 6.2 53.6 87.4 37.2

2020 est. 1.2 26.3* 10.3 65.0 102.8 35.6

2025 est. 1.2 26.1* 14.8 76.1 118.2 34.6

2030 est. 1.2 25.9* 19.0 87.4 133.5 33.6

* Possible peak production

27

The Cellulose Gap


Share of Fibre Production

(in %)

1900 - 2030 (assumption for 2015 – 2030)

0

20

40

60

80

100

120

140

1900 1920 1940 1960 1980 2000 2005 2010 2015est.

2020est.

2025est.

2030est.

millio

n m

etr

ic to

ns

Synthetic

Cellulosic

Cotton

Wool

Cellulosic: Viscose, Lyocell, Modal, Acetate, Cupro, Triacetate

33% 37%

Cellulose Gap

Fibre Production

(in mill. tons)

1900 – 2030 (assumption for 2015 – 2030)

28

The Cellulose Gap


Fibre Production

The per capita fibre consumption will grow.

The production of natural fibres will remain constant or shrink.

The growth of total fibre consumption can only be covered by man-made fibres.

Certain properties of cellulosic fibres cannot be substituted by petroleum-based synthetics (Polyester, Polyacrylonitrile, Polyamide, Polypropylene and others).

Cellulosic fibres (cotton and man-made cellulosic fibres) will

make up 33 – 37% of the fibre market.

29

The Cellulose Gap


Man-made Cellulosic Fibres as a Substitute of Cotton

Cotton and man-made cellulose fibres are hydrophilic and stand for absorbency and breathability. These inherent physiological fibre properties are ideal for the moisture management. The fibres can absorb sufficient moisture, which they then release into the surrounding air. This function ensures an adequate temperature balance on the skin, especially where textiles touch the skin. For these reasons cellulosic fibres are ideal in various fields of application in textile and garment industry for

woven and knitted fabrics

nonwovens

Man-made cellulose fibres are an ideal substitute for cotton !!

30

The Cellulose Gap


Man-made Cellulosic Fibres as a Substitute for Cotton

Viscose Viscose-

Blends

Lyocell Lyocell-

Blends

Modal

Modal-

Blends

Woven and knitted fabrics

Apparel

Underwear

Knits

Bottom weights

Active wear

Socks

Shirts / Blouses

Home textiles

Bed linen

Towels

Filling

Nonwovens

Cleaning rags

Sanitary articles

Baby wipes

31

The Cellulose Gap


Estimated Demand of Man-Made Cellulosic Fibres (assumption for 2015 – 2030)

32

The Cellulose Gap


Estimated per Capita Consumption of Cellulosic Fibres (assumption for 2015 – 2030)

Cellulose

Gap

33

The Cellulose Gap


Fibre Consumption resp. Production

Growth Rate in %

8.1

3.4 3.8

10.9

3.9

3.3

7.3

3.2 2.8

5.1

2.8 2.5

0

2

4

6

8

10

12

Man-made cellulosefibres

Petroleum-basedsynthetics

Total (incl. natural fibres)

2010-2015

2015-2020

2020-2025

2025-2030

The demand of man-made cellulose fibres will increase disproportionally.

34

The Cellulose Gap


Sustainability

Sustainability

Ecology

A sustainable fibre production tries to achieve three goals

to effect the environment in a positive way ( ecology), to be economical and profitable ( economy) and to enhance the quality of life ( social responsibility).

Economy

Social

responsibility

In all three fields man-made cellulose fibres show better results than cotton.

35

The Cellulose Gap


Sustainability of Cotton

The sustainability of cotton is strongly dependent on

consumption of pesticides and fertilisers gene-modified cotton (70%) or conventional cotton (30%)

with different cultivation system • conventional • IPM (Integrated Pest Management) • organic (<1%)

water consumption rain-fed (<40%) irrigated (>60%)

• 97% flood or furrow irrigation (20-50% water efficiency) • 2% mobile irrigation systems (80-90% water eff.) • 1% drip irrigation (90-98% water eff.)

land use (resp. yield) but in comparison to man-made cellulose fibres – like Viscose, Lyocell or Modal – cotton is not sustainable at all.

36

The Cellulose Gap


Sustainability of Cellulosic Fibres

Fibres with prefixes as “eco-”, “bio-”, “natural-” and “organic-” are not always sustainable. For example water consumption is not a criterion for the certification as organic cotton. This proves that even “bio” is not unavoidable “eco”. Life cycle analyses also show that man-made cellulosic fibres have much smaller carbon footprint compared to cotton. For the production of man-made cellulose fibres no pesticides and synthetic fertilisers are needed. The natural origin of man-made cellulosic fibres from the renewable resource wood contributes to a sustainable future.

The substitution of cotton by man-made cellulose fibres is also a contribution to environmental protection !!

37

The Cellulose Gap


Water requirement for one kg of fibres

litr

e w

ate

r

Irrigated cotton in a hot environment requires 20 - 35 times more water than cellulose fibres.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Lyocell Viscose Modal GM-cotton(1,200kg/ha)

IPM cotton(1,000kg/ha)

conventionalcotton

(850 kg/ha)

organiccotton

(700 kg/ha)

265 445 470

8,300

10,000

11,700

14,300

38

The Cellulose Gap


2.5%

Freshwater

97.5%

Salt water

1.4 billion km³

How much water is available?

0.4%

0.8%

30.1%

68.7%

0% 20% 40% 60% 80%

Lakes, rivers etc

Permafrost

Undergroundwater

Ice and glaciers

= 140,000 km³

or 0,01%

Source: UNESCO; WWAP

39

The Cellulose Gap


More than 70 per cent of world freshwater consumption is used for irrigation and 60 per cent of the irrigation water is wasted due to inappropriate techniques. Intensive irrigation, especially flood or furrow irrigation, can cause waterlogging with a catastrophic long-term effect, salinisation. Approximately one third of the world population suffers from water shortage today, up to the year 2025 this share most likely will expand to two thirds and the number of conflicts between different countries is likely to rise.

Water requirement

Water will become the oil of the future !!

40

The Cellulose Gap


One of the biggest environmental disasters was caused by cotton. The Aral Sea was the 4th biggest freshwater sea on earth, which has nearly disappeared over the last three decades, by using the water of the rivers for irrigation.

Water requirement

Kazakhstan

Uzbekistan

41

The Cellulose Gap


Areas required for one tonne of fibres

he

cta

res

The humanity needs more land for food !!

Compared to cotton cultivation, the yield of cellulose fibre from Central European beech forests and from fast-growing eucalyptus is much higher.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Lyocell Viscose Modal irrigated cotton(1,000 kg/ha)

rain-fed cotton(500 kg/ha)

0.24

0.69 0.70

1.00

2.00

42

The Cellulose Gap


Sustainability Ranking of Cellulosic Fibres

Man-made Cellulose Fibres Cotton

Lenzing

Viscose

Austria

Lyocell

(Tencel)

Lenzing

Modal

Lenzing

Viscose

Asia

Gen-modified

70%

Organic

1%

IPM

5-10% Conventional

20-25%

Environ-

mental

impacts

Use of pesticides

(+ human impact) no no no no little

no

high

huge

Synthetic fertilizer,

manure no very lttle no no synthetic fertilizer

(little)

only natural

manure synthetic fertilizer

(high)

synthetic fertilizer

(very high)

Soil degradation,

depletition, ecoto-

xicity, acidification,

eutrophication, etc

Resources Cumulative energy

demand

Land use,

yield

forest land

forest land

forest land forest land agricultural land

110 -120%

agricultural land

70 – 80%

agricultural land

80 – 90%

agricultural land

100%

Water consumption

(incl. process +

irrigation water)

rain-fed rain-fed rain-fed rain-fed rain-

fed

irrig. rain-

fed

irrig. rain-

fed

irrig. rain-

fed

irrig.

Fibre quality (spinnability, waste) excellent excellent excellent excellent good reduced good good

Sustainability Points 26 24 24 21 21 19 20 16 15 12 13 10

Ranking 1 2 2 4 4 7 6 8 9 11 10 12

rain-fed cotton <40%

irrigated cotton >60% 4 3 2 1 0

sustainable

yes no

30 – 50%

higher fibre

price

43

The Cellulose Gap


Final Conclusion

Companies which today are using mainly cotton will have to add man-made cellulose fibres to their production programme.

Man-made cellulose fibres are in contrary to cotton extremely sustainable fibres.

In comparison to cotton man-made cellulose fibres have some important assets

- no arable land is necessary, the trees (eucalyptus and beeches) for

the pulp production are growing in forests or on marginal land, - less water consumption, - no input of pesticides and fertilizers.

The substitution of cotton by man-made cellulose fibres is an

important step in order to protect our environment.

Man-made cellulose fibres are real ecological fibres !!

44

The Cellulose Gap


45

The Cellulose Gap



Arenberggasse 1/5

A-1030 Vienna /Austria

Email: [email protected]

46

The Cellulose Gap


Demand of man-made cellulose fibres (Sensitivity analysis)

World

population

Textile fibres per

head consumption

Total fibre

demand Share of cellulose

fibres

Demand for cellulose

fibres

Demand for man-made

cellulose fibres

Cotton

harvested area Yield

Cotton production

X

X X

= variables

Documents

The Cellulose Gap