Seaweeds seem to be a very promising raw material source with quite a lot of advantages for the use as building blocks and biopolymers. Moving this feedstock into scale especially from the sea to the marine degradable polymer PHA sounds very interesting. And here we go. Please listen to co-founder and co-CEO Michael Kingsbury with a lecture on the PHA.
lecture on the topic, seaweed derived PHAs to replace plastic at scale. A warm welcome to you, Michael Kingsbury. Thank you very much for having me.
I'm Michael, co-founder of Ulu. And yeah, I just want to say a big thanks to Polycom for inviting us to come and present today. Ulu is developing the world's first truly compelling alternative to plastic.
And I think this room is very aware, but just a quick reminder on plastics. They've provided us many benefits. They protect our food. They allow us to climb mountains with weatherproof, windproof clothing. They let us drive cars.
with light but strong materials that can even reduce our carbon footprints as a result. But plastics are harming us through their production using fossil fuels, through to their use and disposal and the leakage of microplastics that get into everything from the food we eat to the air we breathe. Ulua is developing natural materials, PHAs, as a topic for today that are biocompatible with our bodies and our planet and biodegradable. And we can use our PHAs across some of the verticals that plastics are used today including fabrics to replace things like polyester and nylon through to films injection molding into rigid products but also more rubbery illestromic type materials Ulu does three good things to the world. So firstly, we reduce plastic pollution and we believe our materials have what it takes to truly decouple the 400 million tonne per annum polymers market from fossil fuels and persistent pollution.
We secondly help to mitigate climate change and that's because we use seaweed as a feedstock Which is not only economic but also Removes a significant amount of carbon from the environment and we actually have the potential to offset more carbon than we we emit through our production process. And then finally that seaweed is also great for the ocean and waterways in which it is cultivated. You have carbon pollution, you have plastic pollution that are really affecting the world's oceans. You also have nutrient pollution caused by industrial runoff and fertilizers.
And seaweed is a marine crop that absorbs those nutrients to grow so it helps to clean up our waterways. It's a great feedstock that we really want to incentivize the scale-up of. And particularly as we...
as we start working with local communities and cooperatives in places like Indonesia, which can really bring about sustainable jobs. So how do we make our materials? Firstly, we take farmed seaweed. We work with farm, not harvested seaweed, where we purchase that seaweed currently from the market in Indonesia, which is the world's second largest producer of seaweed.
We then hydrolyse or extract the sugar from that seaweed. We break down the carbohydrates into fermentable sugars. We then feed those sugars to microbes growing in fermenters, which produce the PHA inside them.
them it's like their fat storage um and so we make them really fat it's like kind of feeding pigs as fat as possible and then we extract those phas um and finally we compound the pha materials into pellets and pellets is really the product that we sell to brands and manufacturers we want to replace the 400 million tons of plastic pellets with with ulu pellets and really uh replace the petrochemical companies upstream in the supply chain to become like like the DAO of the future. This is a short video just to give you a sense of what we do in Perth. So we're based in Western Australia at the other end of the world.
And yeah, hopefully this gives you a bit of insight about what we do on the ground here. My name is Julia Heinze. I am an oceanographer by background, originally from Brazil.
My name is Michael Kingsbury. I joined ULU after a few years of being interested in science and technology and building businesses. So at ULU in a nutshell we basically fermenting seaweed into this natural plastic-like material. And what we're very excited about this material is that it can replace plastic while being good for the world. My name is David Chiukarugude.
So what we do in the first stage is we get seaweed, cook it, that's a simple term for hydrolysis, we break it down into simple sugars and then turn that into a soup or a media, like the biologists will say, that we will use to grow bacteria. And then we get out something called PHAs, polyhydroxyalkanoids. Those are the biodegradable plastics.
And then we take this polymer, this polymer bits, and then extrude them and mold them into pellets, which you can convert into anything. Anything that can be molded from plastic can be molded from our material. The problem we're trying to solve is, a planetary challenge which is plastic pollution. Creating a material that has the potential to replace plastic at scale whilst also using a feedstock that isn't fossil fuels but something that is renewable, scalable, sustainable.
Seaweed's an awesome feedstock both from an economic perspective but also from a environmental perspective. It absorbs a lot of carbon dioxide from the environment and it also absorbs marine pollutants so things like fertilizers and industrial runoff that enter our waterways. and oceans. So it's a great marine crop that we really want to scale up more of and we're incentivizing that for Ulu. I am super positive about the future.
I think humanity can move very quickly in terms of change. Can't wait to create the better future and be working hard to help create that. Cool.
So we believe Ulu is uniquely positioned to solve the three key challenges related to bioplastics today and we see those being related to the feedstocks that are used, the materials that are produced and the processes in the processes that are used to produce those materials. So firstly when it comes to feedstocks, typically we use either things like, the industry uses arable crops or waste streams which can be problematic. In terms of crops, you know, things like palm oil which can create deforestation and use loads of fresh water and synthetic fertilizers, or waste which is a great next step but also can be in some cases hard to scale because it can often be fragmented and low volume so it requires lots of expensive reverse logistics to bring it together. Seaweed on the other hand we love, it gets everything it needs from the Sun and the sea, it doesn't require fertilizers or fresh water and it's scalable you can have farms that are thousands of hectares in size in places like Japan and China and it means you can start to aggregate that feedstock and build manufacturing facilities where you can get those economies of scale that are so important.
In terms of materials I think we've touched on it a bit today already but typically we have you know paper-like bioplastics that absorb water rather than repel it which are really suitable therefore for more niche markets or you have materials that are very hard to biodegrade things like PLA. unless they're in industrial composts for instance. And in contrast, we love PHAs being natural materials that nature understands, nature built them, and therefore nature can break them back down again at the end of their life, whilst providing us those properties that we rely on as a society from plastic, durability, hydrofabricity, etc. And then the third key challenge is related to cost. So bioplastics tend to be two to six times more expensive than commodity plastics due to those expensive crop feedstocks, for instance glucose, and also relatively inefficient production processes.
Through the use of seaweed, which grows very quickly, it contains lots of fermentable sugars, in combination with our saltwater production process, which I'll go through in a moment, we expect to reduce the cost. the cost to ultimately compete with conventional plastics on price. It will take us some time to get there but we have a clear path to a number of levers that we can pull along the way and ultimately get to that $2-$3 per kilogram price point. In terms of what we do relative to others, I'll focus on the top row which is Ulu. We've highlighted in blue where we're unique.
So yeah, the way we reduce this cost of production also really what's I guess centred around our sustainability is this saltwater production process and saltwater provides three key benefits. So firstly, it's conducive to using seaweed which is 90% saltwater. If you're a bioprocess engineer, you would look at seaweed and...
and think it's quite difficult because you need to dry that feedstock and wash the salt. Whereas we can actually wet mill our seaweed and take advantage of that salt for our process through hydrolysis. The second benefit is related to fermentation. So our microbes are halophiles which were isolated in very salty lakes in Europe actually and it allows us to reduce the risk of contamination.
during fermentation in contrast to freshwater processes. So it's very hard for other microbes to grow in that environment, which means we can reduce the downtime that would otherwise be incurred for sterilisation and cleaning of our reactors. Sterilisation is also very carbon intensive. It requires steam and heat energy. And that means we can increase production rate and also reduce operating cost as a result.
And then the final benefit is related to extraction of those PHAs. So our microbes love salt, but they hate freshwater. And at the end of the process, we can submerse them in a low salinity liquid.
And as Bronwyn was touching on, we have this process of osmotic shock where that water gets inside the cells and they burst open. Yeah. Which means we can eliminate the need for toxic solvents, which can obviously leave waste streams that need to be managed, but also reduce operating costs with solvents can be like 30% of your OPEX. So we think that's a really nice elegant process.
In terms of our carbon footprint These are our projected emissions profile at commercial scale production Not what we're doing at the lab currently but I think there's a really nice vision here for a process that can actually offset more carbon than we emit and that's really driven by We have firstly the emissions that we the emissions in red, but also in blue is how we kind of sequester or offset carbon. And I'll go through that in turn. So firstly, as you can see in the sort of bottom left, as seaweed grows, it's very floppy in the water.
It doesn't contain lignin, which makes land plants sturdy and tough, but also makes it somewhat easier to extract the sugars from that seaweed. But it also means that as that seaweed is growing, some of that biomass actually gets shed off into the water. And ultimately...
gets sequestered in ocean sediments and becomes like the fossil fuel of the future. It's like the blue carbon that you may have heard of. The second key area where we can offset carbon is related to a by-product that we have.
So seaweed doesn't just contain the carbohydrates that we use for fermentation, it also contains proteins and lipids. And once we've extracted those sugars, the carbohydrates, we move from a biomass that initially contained 10% protein up to now 55% protein and that means we can use it as a vegan protein replacement for animal proteins and things like feed where you have fish meal which is very carbon intensive so we're really excited about this this vegan protein byproduct and then finally obviously you have the carbon that's locked into the the products that you produce provided they're obviously not composted and if we're not using plastic anymore we can offset the carbon that's related to that. And when you net those things out, there is that potential to offset up to five times the weight of the PHAs in terms of carbon equivalents. What we're doing right now is really focused on two things. So firstly, we recently established a joint venture or a business in Indonesia, which is all about scaling up traceable seaweed farming, working with cooperatives on the ground.
And it's very similar. To what Alec was saying about, I guess, the New Zealand log economy. In Indonesia currently, all of their seaweed, or 90% of that seaweed, gets shipped to China, where it gets processed into food additives and things like that. It's very strategic for the Indonesian government to retain those benefits within Indonesia and actually invest in downstream processing in-country. So we've received some...
fantastic support from the Indonesian government to help us do that and build our first factories in Indonesia. And then secondly in Australia today we operate a test facility so We have a nice site in Perth on the ocean which has a saltwater pump pumping ocean water into our factory. It's a pilot, oh sorry, test site we call it, which is producing around 2kg of our PHAs each week. And that's really for two things.
So firstly for customer trials where we're shipping those materials to brands in the cosmetics industry where we're producing rigid cosmetics containers. and also textiles for fashion and they're kind of more premium consumer goods markets that can absorb those higher prices initially as we reduce that cost of production over time. And yeah our focus as I kind of just alluded to is injection moulding grade pellets for cosmetics as well as fibres and I think this you know this room would be well aware that over half of our clothing is made of plastic and here we've been making some Yeah, pretty exciting progress on replicating the properties of polyester with our PHAs, working closely with Deakin University. We recently announced a partnership with Quicksilver, where we released co-branded products into the market and are working very hard on plastic-free textiles for use across their product lines, including in their board shorts, which are currently made of recycled PET. And yeah, it'll be cool to have those made of Uli one day.
In terms of our path to market, this is kind of a scale-up journey, moving from test plant through to a demonstration plant in Indonesia next year and all things going well, building that out. a large commercial facility that we expect to produce around 10,000 tonnes of PHAs per annum. And a key part of this is really being co-located with those seaweed farms in Indonesia, and also Indonesia being quite a strategic place given that a lot of the manufacturing supply chain is based in South East Asia. So yeah, this is our team.
Just to finish off, we've built out a team from around the world that have come to Western Australia to work with us. A lot of chemical engineers, scientists, and also have a number of... venture funds that are providing us with investment, including some German funds like Berta Principal Investments, which is based out of Munich and Possible, and have a number of fantastic research partners, including the University of Queensland and the work that Luigi is doing, which were...
we value very highly. And yeah, I think that's kind of it. Really keen to hear any questions that you might have.
And perhaps one of the breaks, I brought some samples along as well. So if you're more than happy, I can show you those. But thank you. Thank you. Thank you very much Michael for your exciting lecture and now we are looking forward to questions from the audience.
So thank you very much so I'm Dirk from Celturin from Rostock and I'm living in the north of Germany and And there's also one company which collect all the seaweeds, not from the ocean, but from the beaches. And so they make some house insulation stuff. But they're also looking for some collaborations, how to use it in a further processing market and so on. It would be nice to get in touch with you.
Do you see also some applications? Now you produce two kilograms per week, something like this. Later it's some million tons, maybe.
Is this market, for example in Germany, is it too small for you as a resource? Yeah, we're very... We partner both upstream in terms of the seaweed supply chain and also downstream in terms of product development and customer partnerships. Germany's Europe in general is really quite exciting.
There is a lot of seaweed in Europe actually. And yeah, I think it's just getting that scale and that traceability in the supply chain. I think places like Indonesia and Southeast Asia, we have to be very cautious about where that seaweed is coming from. So we're investing a lot of time in actually mapping.
that supply chain and working directly with farmers. Yeah, so I think if there's that capacity in the places that you're speaking of to understand where that seaweed is coming from and kind of... And provided there's enough scale to kind of justify, you know, potentially building a factory one day, then it makes sense, yeah. OK, thank you very much. All right, thank you.
There's also a question coming from the digital audience. You're mentioning as well that you need to be very... careful about where to grow the seaweed and how it might harm the environment as well. How do you see that controlling that over a longer period of time? Is there any plan also with your cooperatives in Indonesia you cooperate with?
Yeah, definitely. So seaweed, yeah, it has this amazing potential. So I think we just need to be cognizant that we don't want to be farming on top of coral reefs or on seagrass beds and things like that.
And really deploying those farms in a way that benefits local communities and ensuring that farmers are being paid fairly through the supply chain, like living wages and things. So currently in Indonesia, we operate out of Sulawesi and also in... East Java, and there we're working with WWF to go through that and really build the world's, or Indonesia's first, certified seaweed supply.
And we'd like to then replicate that model across the region in Indonesia. but in other locations as well. So I think we invest a significant amount of time on that supply chain side because at the end of the day, like feedstock is everything.
So yeah, it's building it in a way that is scalable, though, is very important. Yeah. All right, thank you.
One question from the online audience. It was about a first thank you of the interesting presentation, she said, and it's a very interesting project. And she asked about which... Which material do you use exactly for your pellets?
Because she mentioned about PHB, and it is very brittle. It has a very small processing window, and she asked about the type that you use for your pellets. Yeah, sure. So we produce PHBV, so with the Valorate copolymer.
I think one exciting thing relative to other PHBV producers on the market is that our Valorate is closer to 10%. and we have control over that Valorate component where we can increase it to even 30% to 40% through the use of precursors. So, yeah.
Yeah, we have to, I think, be... For different applications, you know, you can use other environmentally friendly additives and things like that to change, like, flexibility and all sorts of things, but we're quite, I guess, happy with the default polymer that we get as well, which can minimise those things, so relative to PHP, yeah. Besides being a manager of Polycom, in real life we are compounding. And this could be a good opportunity, because it's quite a rare material as far as I understood, to increase the volume of the granules by compounding something in.
Do you have any recommendations or any knowledge how much filler or other increases? can be taken in the PHA? I think it depends. And, yeah, working very closely with Luigi's team over in Queensland on blending with, yeah, wood and things like that.
But, yeah, you can include, I don't know, it's probably between 20% to 30% filler, roughly. Which, yeah, depending on what that filler is as well, we need to be careful that also that filler is environmentally friendly and biocompatible with the world around us and ourselves. but can help to reduce the cost of production definitely. Okay, thank you.
Okay. Oh, there's a last question. Okay, so, yeah. Thanks Michael for the talk.
I have another question regarding percentage. Are you allowed to share with us the percentage or if we say it in the biotech language, the yield of your final PHA? on the feedstock you used in the very beginning? Yeah, sure. I mean, we're improving this all the time, but at commercial scale, we are modelling 10 to 1. So we're currently getting 10 kilograms of...
seaweed, dried tons for one kilogram of PHA. We also get between one and two kilograms of that protein by-product as well, which isn't insignificant. It can obviously help us reduce CO2 footprint, but also brings in a nice supplementary revenue stream that can help subsidise the cost of PHA production as well. Okay, thanks.
Good luck for the next steps. Thank you. So, thank you very much. That's it. Thanks for the lecture.
Thanks for being with us. Michael from Spurring.