Landon, 15 years is a big milestone in this industry, so congratulations to us for that!
The materials industry has changed and evolved over the decades. Can you give me some insight into that history and what has helped grow the industry? And discuss where, specifically, nanomaterials fit within the future economy.
Landon: Materials are great technological enablers. Historically, looking much further back than nanomaterials and Cerion, the foundation of virtually every innovation has been preceded and made possible by, discoveries in materials.
We can easily identify great civilizations based on their ability to discover and then leverage advanced materials. Damascus steel was a key enabler in early warfare. Modern-day steel was at the heart of the industrial revolution. And, of course, silicon, which brought about computing and communications, revolutionizing nearly every corner of our society. Often underappreciated, materials have been the foundation on which society has been built. They make our lives safer, more efficient, and enriching. This will no doubt continue for centuries to come.
Historically the country that had a first-mover advantage in materials also had first-mover advantage in the technology revolution that followed. This advantage directly conferred to the country’s economic prosperity, foreign policy influence, and defense posture. First-mover advantage, in the context of a country, translates to power. Today the United States is in a global competition across several new general-purpose technologies which will shape the future of society – artificial intelligence, quantum computing, biotechnology, and nanomaterials to name a few.
Nanomaterials touch every industrial sector and are fundamentally altering competition across industries and between nations. Engineered nanomaterials emerged over forty years ago. It’s a youthful industry, still coming into its own. Those companies and their product development teams that are leveraging nanomaterials today tend to struggle with three key areas: precision design of the nanomaterial to achieve the desired performance benefit, scaling the nanomaterial while preserving its design features, and being able to manufacture that material cost-effectively at industrial scale.
Happily, and because of our business model, Cerion is a notable exception. We recently achieved our 15-year anniversary – no small feat in an industry where we’ve seen many competitors come and go. Our longevity has been due to our dogmatic approach to solving those three challenge areas and investing heavily behind it, nearly $50 million to date. This has put us far ahead of where most of the nanomaterials industry is at.
And what makes it an exception, what’s the secret of Cerion’s success?
Landon: We are one of the few nanomaterial companies that do not develop products. I mean that to say we don’t make materials to solve one specific industrial challenge (e.g., nano-enabled anti-counterfeiting materials). Rather, we support product development and commercialization teams who are creating products or systems and are looking to leverage the unique properties of nanomaterials. We serve as the subject matter expert on how best to design, scale and manufacture the nanomaterial. Our customer, on the other hand, is the subject matter expert in their product, application, and industry.
By taking this approach, we’ve been able to apply our intellectual and capital resources to focus solely on perfecting the art of making nanomaterials. Our core philosophy is myopically focused on being able to deliver the exact nanomaterial a customer requires, cost-effectively at low and high production rates. This philosophy extends to all aspects of our business, whether that be our synthetic processes, manufacturing systems, and even our business processes. We’ve also focused our effort exclusively on inorganic nanomaterials – the bulk of the market – which represent metal, metal oxides, and ceramic nanomaterials.
And what does this mean for the way you work in practice? What is the client experience that enables you to maintain your leading position?
Landon: The client experience is very straightforward. Our goal is to consistently deliver for our customers, delight them in the process and completely remove the commercial risks that most customers encounter when they are working with nanomaterials.
How this applies in practice requires a wide range of competencies and a whole of company approach, including forward thinking and planning right from the beginning. A hallmark of our process is that we are thinking about manufacturing from day 1. We incorporate a rigorous design for manufacturing methodology that we’ve built over 15 years into everything we do. The process evaluates the future technical, economic, engineering, supply chain, and logistical dimensions of the decisions we are making today in the lab when designing a specific nanomaterial. We put a significant emphasis here as decisions made today will have a direct impact on the success of the nanomaterial scale-up, commercialization, and high-rate manufacturing phases of a customer’s project.
These decisions, many of them non-obvious, will have profound implications on the timeline, cost, and even success of a customer’s product development effort. Without the requisite experience, and when not properly thought through, decisions made today can result in nanomaterials that don’t meet cost targets, don’t scale-up well, or are unable to transition to the manufacturing floor. We’ve found over 15 years that many nanomaterial makers, and even customers who have tried making nanomaterials in-house, have fallen into this trap. Our job is to take this risk out of the equation to the benefit of our customers. We want to ensure that their product development investment will reach the commercial market, and leverage nanomaterials in new and differentiated ways that give them a competitive edge. It’s good for our customers, it’s good for Cerion, and more broadly for our industry.
Realistically, how prevalent are nanomaterials within the commercial market?
Landon: I’m a big fan of the Gartner Hype Lifecycle, which is a framework for evaluating the commercial adoption of a technology. It’s broken up into 5 distinct phases ranging from technology inception to high-growth market adoption. As for the use of nanomaterials by the commercial market, today I would say most companies sit between the end of the ‘trough of disillusionment’ and the beginning of the ‘slope of enlightenment.’ This transition to enlightenment has been enabled by companies like Cerion, who have made access to nanomaterials much easier for product development and commercialization teams than in decades past.
I would say however that Cerion’s growth has been far ahead of the curve when compared to the rest of our industry. We’ve been fortunate — 10+ years ago there were a small set of forward-thinking companies who were committed to figuring out how to leverage the unique behaviors of nanomaterials to give their products new or enhanced capability. For many of these early adopters, we were right there working alongside them. Those early experiences, combined with our unwavering commitment to investing in our future, gave us a monumentally huge head start.
We’ve all heard concerns expressed about the safety of nanomaterials. How does Cerion address that?
Landon: Since these materials are ‘relatively new,’ there are of course times when customers can be concerned with the possible health and safety of engineered nanomaterials. This is natural. However, we should first put some important context around the prevalence of engineered nanomaterials.
Nanoparticles are a critical component in the earth’s complex (bio)geochemical system. They’ve been present since Earth’s origin. Life, from the earliest cells to modern humans, has evolved in intimate association with naturally occurring nanomaterials. As a basic example, if you’ve walked down the beach, you’ve encountered nanoparticles from evaporated saltwater and sand. If you’ve hiked a mountain trail, you’ve encountered nano-sized minerals from weathered rock. When a volcano erupts or a forest fire occurs, a portion of the ash comes in the form of nanomaterials. By one popular estimate, there are thousands of teragrams of naturally occurring nanomaterials on our planet (1 teragram = 1 million metric tons = 1 trillion kilograms).
In contrast, during the last 100 years, anthropogenic incidental nanoparticles (produced unintentionally by human activity) have become present. The list of incidental nanoparticles is nearly endless. The summer campfire in your backyard, the soot from the exhaust of your car engine, the breakdown of plastics in your clothing – all of these generate incidental nanomaterials. By the best estimates we have today, incidental nanomaterials in the environment are between 1 to 10 teragrams.
Engineered nanomaterials, on the other hand, are specifically designed and manufactured to serve a purpose. These materials are integrated into many different products, across dozens of industries, to provide new performance benefits. While no formal study has been conducted, from my direct experience, it would be reasonable to state that the total engineered nanomaterials ever produced represent a mere fraction of a single teragram.
As for what Cerion Nanomaterials is doing on the health, safety and environment front, we have been a member of the Nanotechnology Industries Association or NIA for years. The association is focused on contributing to the policy discussion in the European Union, where the regulatory environment is further along than in the United States. Two years ago, I was appointed as the association’s Chairman of the Board. At Cerion, we export a lot to EU countries and the region is very active in monitoring the production of nanomaterials and creating definitions and standards. EU policy measures are largely ‘precautionary’, taking the line that nanomaterials should be proven to be safe and never be harmful.
Now, as for the future regulatory environment… I maintain that even if regulators have decided that certain nanomaterials are potentially harmful to human health, they need to look at the actual lifecycle of the material and current production levels. Then, mandate regulatory measures based on the current and projected production, use-related risk levels, and end-of-life fate.
If a nanomaterial is being put into a situation where it is being systematically released into the environment, then policymakers must evaluate that use risk and regulate it accordingly. For example, let’s say you put nanomaterials into fuel to reduce greenhouse gas emissions from an engine. That nanomaterial is going to escape via the exhaust stream, and those potential impacts should be evaluated. At the same time, where there is a closed loop system, there is virtually no risk to the end-user and regulation needs to reflect this. A great example would be precious or rare earth metals used as a catalyst in a chemical plant. In these scenarios, the regulators should be focused on proper handling, emergency HSE response, and end-of-life remediation plans.
You also must consider that nanomaterials have been widely researched over the last forty years, looking at toxicology and HSE, and there’s very little concrete evidence of systemic risk. For example, concerns have been voiced about the infiltration of nanoparticles on the skin. For materials over 10 nm, there is typically no penetration because of the structure of the skin itself. In fact, nanoparticles of zinc oxide are commonly used today in sunscreen. When it comes to nanopowders, concerns have been voiced about inhalation risks, because nanoparticles are quite small. Nanoparticles tend to clump together into larger aggregates of at least one micron in size. The material handling risk is not that dissimilar to the risk for micron-sized particles – and industry has been working with those, safely and successfully, for decades.
Of course, this is not to downplay possible risks or the need for the scientific study of them, but rather to inject a bit of practical common sense into the discussion.
So, you discussed the current issues around safety. Where do we go from here?
Landon: While there is a good body of evidence suggesting safety when properly used, industry and government have more work to do.
There has been a huge volume of environmental fate and toxicology research over the decades, largely publicly funded. The US government is just one of many making investments in academic labs around this type of analysis. However, reputable journals report many different studies, of materials that are not comparable, using tests that are not comparable – and are sometimes so far from the real-world use cases that they offer very little clarity for regulators or industry.
While some people are trying to address this problem, including a large grouping of regulatory bodies brought together from across the globe by the Organization for Economic Co-operation and Development, advances are slow. In the OECD case, they are considering only eleven different nanomaterials. Involving the industry in standardized toxicology testing of nanomaterials would provide a lot of value from real-world situations with end-user relevance. The costs incurred by the industry could be offset by public funding or other fiscal measures. A benefit would be in the huge acceleration and volume of relevant information delivered to the regulators, which would mean that governments will ultimately spend less money and achieve the results that are needed in terms of regulatory data.
We also need to establish a global regulatory regime. While Cerion’s activities are, of course, fully compliant at US and EU levels (and for all other countries to which we export worldwide), we are over-regulated for what we produce because of the lack of organizational/governmental streamlining.
If the EU and the US collaborated more and adopted a common regulatory framework, that would enable the industry to better compete and operate in multiple jurisdictions. Such streamlining should aim for a system where companies have to provide only one set of data, under one set of conditions, not multiple datasets produced to meet different regulatory requirements. Compliance without regulatory consistency consumes profits while not having any positive impact on the taxpayer.
It’s certainly a very challenging area and one that will not diminish in importance as more nanomaterials come on-stream. So, let’s now focus on the technological future of nanomaterials. It’s clear that much has changed and yet much has remained the same over the past decade and more. Where do you see the changes or improvements that will drive the next generation of process technologies?
Landon: There are two aspects to cover, with the first being the type of synthetic method used to make a nanomaterial, and the second being how that method is applied (i.e., batch versus continuous manufacturing).
First, it should be noted that despite marketing claims to the contrary, there is no single synthetic method to make nanomaterials that meet all the varied design, scale, and cost requirements of customers. Since Cerion’s work for customers is custom to their needs, we have to identify the approach that will yield the best result for them and their application.
We always start with the customer, their needs, and their requirements. Looking at other firms in our competitive space, a big strategic competitive advantage of Cerion is that we don’t focus on one synthetic method and try to shoehorn the customer requirement into that approach. Other companies have become experts in just one type of synthesis, so that their answer to every question is that route, which may not always be the best for the customer.
Cerion has taken a radically different approach, basing our production on a handful of complementary synthetic methods that we have demonstrated to work at scale. We started in precipitation, which reflects back to our Kodak history before Cerion was founded. Precipitation is not one of the more practiced methods of making nanomaterials, however, it offers incredible design flexibility, is very cost-effective, and is one of the most commercially scalable pathways on the market today. In later years, we expanded our synthesis portfolio to include hydrothermal, solvothermal, and thermal reduction, which, like precipitation, are all bottom-up approaches. This allows us broader degrees of freedom for designing a nanomaterial, for those instances where a customer’s needs can’t be best met through precipitation. In addition to this, we’ve carried over our precipitation platform approach of precision design, repeatable and effective scale-up processes, and industrial rate manufacturing to these other synthetic methods – which makes them inherently quite versatile.
To those – and now I’m speaking to the new approaches – we have added the top-down method of high-energy milling, which is a much more powerful and precise tool than ball-milling. We will not be looking to replicate what we achieve using bottom-up synthetic methods, but instead, our aim is to produce new classes of materials like nanostructured grains. We’re in the more experimental and small pilot stages with customers and their materials now, after 3 to 4 years of characterizing the potential of high-energy milling as a tool. It’s pretty unique in industry terms and has been mainly in the academic realm until now. It’s not a panacea but is part of the future of synthetic pathways at Cerion.
On the second point, from a production perspective, there are two options – continuous and batch manufacturing. This is a topic that consistently generates a healthy debate around which is the best alternative for making nanomaterials.
The majority of nanomaterials manufacturing runs on batch processes. When done correctly, it is very cost-efficient. Fundamentally our customers require high degrees of material customization and have different production volume requirements. This is what batch processes were made for – to have a platform system capable of producing many different materials under a variety of process conditions. Continuous manufacturing on the other hand is best suited to making a single material in high volume. This approach is simply incongruent with the current and future needs of the market.
A close analog to nanomaterials manufacturing would be pharmaceuticals. This industry’s customers have widely varying needs (drugs) at dramatically different volumes based on disease incidence within a population. This industry primarily uses batch manufacturing platform, where customization and demand are quite similar to our industry. Continuous has been touted for decades as having the potential of delivering cost savings to pharmaceuticals, and yet today, only four out of over 19,000 drugs on the market leverage these processes.
So, to finish off with some discussion on the future, what do you see looking five years out for the nanomaterials industry?
Landon: I see continued and accelerated adoption of nanomaterials. We can see this in the pipeline of customers we are supporting today with their product development, who years later will introduce their products to the market. Production scale improvements will continue to drive better economics. As companies like Cerion achieve increased production output, this will drive material costs even lower than the low costs we provide to the market today.
I do see a reordering of the competitive landscape on the horizon over the next two to three decades. The government in China is heavily subsidizing their domestic nanomaterial industrial base. While the technical sophistication of these nanomaterial companies does not yet rise to the levels in the US or EU, they are gaining an unfair competitive advantage globally thanks to their government’s intervention. This will, over time, result in commodity, low-tech nanomaterial supply originating from their markets. This is not dissimilar to previous government interventions in China around solar panels, which resulted in them capturing 85% of global economics. Or in lithium batteries, where they are well down the road in terms of capturing significant market share.
The West affords its citizens a high quality of living, and with that comes higher labor costs and lower manufacturing productivity than the developing world. This, in addition to China’s unfair trade practices, mean that the focus for nanomaterial users will need to be on rapidly getting to market and achieving first mover advantage within markets. It also means that step-change product improvements are going to be significantly more important than the incremental approach that product developers have focused on for the last 3 to 4 decades.
So obviously, industry must play a role, but governments are going to need to consider what their role is as well. I believe that Western policymakers must ask themselves, “What if the US or EU does not dominate and have first mover advantage in a general-purpose technology such as nanomaterials? What will be the first, second, and third order impacts on our economies, defense posture, and foreign policy?” To answer this question, simply imagine if existing enabling technologies like computing originated in the Soviet Union, or if future advancements in artificial intelligence or quantum computing are dominated by nations who are near-peer adversaries. Policymakers won’t like the risks they see when using this simple thought experiment.