The Challenge

Fossil fuels are primarily associated with being an energy source, but less widely recognised is their role as the foundation of the modern chemicals industry. Around 13% of fossil fuels are used not for combustion, but as raw materials for making products such as plastics, fertilisers, and solvents (Zanon-Zotin et al., 2024).

Solvents are all around us. Ethanol is used in perfumes, acetone in nail polish remover, and butanol in acrylic paint. These carbon-based chemicals are vital to many everyday products, but they come with a cost. To produce a kilogram of butanol, 2.5 kilograms of carbon dioxide are released, while producing a kilogram of acetone releases 1.9 kilograms of carbon dioxide (ESIG, 2021). Most of this impact comes from the fossil fuels used as raw materials to make them.

The global demand for these chemicals continues to rise. By 2050, global production of the seven major base chemicals - the building blocks of plastics, fertilisers, solvents, and pharmaceuticals - could grow by nearly 70% from 2020 levels, requiring 81% more energy to produce them (PwC, 2024). Today, 95% of the raw materials to make these precursors still come directly from fossil fuels (PwC, 2024). The industry needs to completely change how it makes chemicals - from the feedstocks to the processes to the energy sources - if it wishes to meet its carbon reduction targets. PwC estimates this shift will require between $1.5 and $3.3 trillion in investment by 2050 to reach net zero (PwC, 2024). There is huge potential in the market for a greener, more circular solution to disrupt this legacy approach.

Whiskey is core to Scotland's identity and is embedded in its history, culture, and economy. Yet it produces a significant amount of waste. Producing a single litre of whiskey creates between 10 and 18 litres of residue waste (Edwards et al., 2022). This adds up to approximately 7.5 million tonnes of residue being produced across Scotland per year. Much of this is used as animal feed or fertiliser, though a small number of distilleries have permission to discharge co-product to sea under Scottish Environment Protection Agency regulation (Edwards et al., 2022). Yet this waste is full of valuable resources that should be captured and circulated within the economy. What if it could be used to make green chemicals?

Circular Solution

Celtic Renewables was founded by Professor Martin Tangney, who originated the research at Edinburgh Napier University that would become the basis for the company. Beginning at test tube scale, his team worked to revive a century-old fermentation process and reimagine it for the circular economy. The company was established in 2012 as a university spinout and has since raised over £90 million in public and private funding, building Scotland's first biorefinery - a commercial demonstrator plant on a 2.5 acre site in Grangemouth, operational since 2023 (Celtic Renewables, 2026).

ABE fermentation - known historically as the Weizmann process - is at the heart of Celtic Renewables' approach: clostridia bacteria convert sugars and starches into acetone, butanol, and ethanol solvents. Originally developed at the beginning of the twentieth century, it formed the backbone of smokeless gunpowder (cordite) manufacturing in the UK and the US during the First World War. By the early 1960s, it had been displaced by cheaper, fossil-fuel-derived alternatives as petrochemical process economics proved superior (Nguyen et al., 2018).

With growing demand for green chemicals, several companies have tried to revive the process. Celtic Renewables has succeeded where others failed by putting circularity at the core of its business model. Competitors like Green Biologics - which shut down in 2019 - relied on conventional feedstocks such as corn starch and sugar, where high raw material costs made it impossible to compete with fossil-fuel derived alternatives on price (Bomgardner, 2019). Instead, Celtic Renewables uses waste streams such as whiskey residue and rejected potatoes as the food source for the bacteria. This cuts feedstock costs to just 10–20% while also solving a waste disposal challenge for food and drink producers.

As Professor Tangney explains in the video above: "Anywhere we can find the raw material that has been generated by another industry, we can potentially process that biological material into our high-value sustainable chemicals". The ambition extends well beyond Scotland - the company sees potential in waste streams from any food, drink, or agricultural sector globally.

The Grangemouth demonstrator plant has been producing green solvents and shipping regularly to customers since becoming operational, with the process constantly being refined and improved (Zero Waste Scotland, 2025). Building on this success, Celtic Renewables has secured £16.23 million in new investment to fund the planning and development of a new £120 million industrial-scale biorefinery at Grangemouth - with ten times the production capacity of the current facility and plans to create 149 new skilled jobs by 2030 (Celtic Renewables, 2026; Biofuels International, 2026).

Celtic Renewables illustrates how a business built on circular principles can become more competitive, build resilience, and unlock entirely new markets - turning industrial waste into sustainable value.

Climate Impact

During the delegation's visit to the Grangemouth plant, Celtic Renewables CEO Mark Simmers told CIRCULÉIRE: "Renewables has been mostly about energy to date, but we must as a society really start to think about materials and the way we live our lives and the inputs we need for that." Celtic Renewables is showing what that shift looks like in practice.

Celtic Renewables reports that its green chemicals generate up to 65% less carbon emissions than their fossil-based petrochemical counterparts (Celtic Renewables, 2025). For every tonne of bioacetone or biobutanol produced, almost 3 tonnes of carbon are saved (Celtic Renewables, 2025).

The company has plans to build several larger facilities directly adjacent to distilleries, allowing waste streams to be piped directly across the boundary. They also plan to make better use of process byproducts - capturing CO₂ and hydrogen and producing biogas from the leftover liquid effluent - which will close the loop further, increase their positive climate impact, and create additional revenue streams.

The potential at scale is transformative. Around 13% of all fossil fuels are used not for energy but as the raw material for chemicals - a share that current decarbonisation strategies largely overlook (Zanon-Zotin et al., 2024). Biorefineries like Celtic Renewables' demonstrator in Grangemouth point the way forward - showing that it is possible to produce the chemicals our economy depends on from sustainable, above-ground resources rather than fossil fuels extracted from below.

Replicability

The green chemicals and biorefinery space is growing, with a number of organisations developing comparable approaches:

• Niskus Biotec (Ireland), a CIRCULÉIRE member established in 2022, uses fermentation and enzymatic processes to upcycle spent grains from breweries and distilleries into high-value bioproducts - demonstrating that the circular valorisation of drinks industry waste streams is replicable in an Irish context.

  
  

• RipCell (Scotland), was founded in 2021 and uses a compact purification process to convert biomass fermentation byproducts into high-purity bio-lactic acid and bio-acetic acid - serving markets including pharmaceuticals, cosmetics, bioplastics, and EV battery recycling.

  
  

• POET LLC (USA) is the world's largest producer of bioethanol, operating 35 bioprocessing facilities across nine US states with an annual production capacity of 3.1 billion gallons - demonstrating the commercial scale that bio-based fermentation processes can reach when built around abundant agricultural feedstocks.

  
  

• Green Generation (Ireland) was the first company in Ireland to inject biomethane into the national gas network, fermenting food waste and animal slurry at its anaerobic digestion plant in Co. Kildare. The company went into receivership in early 2025, with its shareholders citing competition from fraudulently labelled cheap biofuel imports as a key factor - a cautionary illustration of the commercial pressures facing early-stage bio-based producers in Ireland (Irish Times, 2025).