The Evolution of Sustainable Materials: Six Trends to Watch

Sustainable materials — materials derived from renewable resources instead of fossil fuels — form the foundation of a brighter, healthier future for the planet and all who call it home. They’re also the core focus of our climate fund, Collab SOS, encompassing everything from textiles and bioplastics to green chemicals and construction materials.

In the year since we launched this fund, the sector has rapidly evolved to meet the demands of a swiftly changing world. Regulatory tailwinds and buy-in from large corporations have been balanced by higher costs of capital and trepidation among investors. Yet, scientific breakthroughs – including improvements in AI-based modeling and the falling costs of both renewable energy and gene editing – have accelerated progress and unlocked new pathways to scale-up.

Here are some of the top trends we’ve noticed in recent months:

1. Diversifying Feedstock Companies are forgoing refined feedstocks, such as sugar, and are increasingly diversifying their feedstock choices when producing valuable materials. We are now seeing an uptick in companies using agricultural crop waste, food waste, fabric waste, municipal waste, and CO2 or CH4 gas waste (e.g., flue gas from industry combustion or gas from wastewater treatment plants). Not only are these feedstocks often less costly, but these re-engineered workflows can often comparably reduce GHG emissions and land use.

2. Uniting Biology and Green Chemistry Companies are evolving beyond trying to produce products purely through fermentation. Instead, they harness the molecules that nature provides, optimize production of the best ones using a biological host, then employ chemistry to generate the final target. This approach often reduces the cost of fermentation and downstream processing and exponentially increases the number of possible chemical targets and applications.

3. Optimizing Downstream Processing Costs In the current environment of steep capital costs, companies are placing a heightened focus on cost optimization. This involves finding abundant and affordable feedstocks and streamlining downstream processes, which are often energy-intensive and yield-limited. By tackling these cost drivers head-on, sustainable material companies can enhance their competitiveness and pave the way for widespread adoption.

4. Championing Ingredients Over Brands Companies are much more focused on B2B go-to-market strategies, versus creating their own consumer brands. At Collab, we see a lot of value in capturing as much vertical value as possible by building end-to-end processes (or as close as possible). However team skills, especially at the early stage, often align better with creating ingredients versus vertical brands. And this strategy can allow for faster scale-up.

5. Exploring Tunable Materials Companies no longer offer just one material. Today, they have the ability to adapt materials for specific characteristics. This is often done through the exploration of potential enzyme activities and innovative green chemistry platforms. We have especially seen this in companies producing alternative leather and in those producing fabric treatments such as alternatives to PFAS for water resistance.

6. Maturing Cell-Free Systems and Applications Cell-free technologies, which allow for biological reactions to occur outside the confines of a living cell, are maturing rapidly. Re-invigorated by reasonably priced, novel and tunable resins that extend the lifetime and stability of enzymes, companies can now apply this technology to producing sustainable materials and chemicals. Once primarily used in pharmaceuticals, these systems now serve broader applications, including the creation of fibers from CO2, recycling hard-to-process plastics, and synthesizing complex chemicals. Cell-free systems permit precise regulation, optimization, and enhanced yields of biosynthetic pathways with the additional capability to create materials with unique, tailored properties.

This sector is undergoing a transformative period, marked by rapid advancements and evolving strategies. The first wave of biomaterials never quite lived up to the hype, but we’re extremely optimistic about the future for this latest group of innovators. The trends outlined above highlight the sector’s determination to innovate and address critical challenges. As investors and advocates for a more sustainable future, we must continue to monitor these trends and collaborate with companies leading the charge in innovation.