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Who Is Buying Bio- Based? IKEA Throws Its Hat Into the Ring With a Slightly off Trend Move

On March 1, 2016, IKEA and Newlight Technologies announced that they entered into a supply, collaboration, and technology license agreement. Under the agreement, IKEA will purchase 50% of the material from Newlight’s planned 23,000 MT/yr PHA plant. In addition, IKEA secured exclusive rights in the home furnishings industry to use Newlight’s technology to convert biogas, its first target feedstock, or later, carbon dioxide into polyhydroxyalkanoates (PHAs) for its home furnishing products. According to the release, both the companies will work together to identify and select the carbon sources and develop the technology to use a range of renewable substrates, with a long term goal to develop capacities up  to 453,000 MT/yr.

IKEA’s announcement with Newlight is, in some ways, not all that surprising. IKEA established a sustainability goal that in August 2020, all plastic material used in its home furnishing products (which excludes polyurethane foams and constitutes a reported 40% of the total plastic  volume  used by IKEA) will be 100% renewable and/or recycled. According to the company’s 2015 sustainability report, IKEA sourced 23% of the plastics in its plastics category of products from renewable or recycled sources in FY 2015. Though the press release did mention that IKEA will license Newlight’s production technology, the company clarified in a follow up that IKEA “[has] no plans to produce [its] own resins and to move up in the supply chain. [IKEA’s] approach is to have long-term cooperation with [its] suppliers for mutual benefit.” Again, not a significant deviation from the company’s typical position in the value chain or industry trends.

However, what does distinguish IKEA is the kind of product they selected: PHA. Continue reading