Despite having established that there is an unmet need and a growing market for sustainable PHA, we learned from stakeholders that setting up a PHA production company in the Netherlands ourselves may prove too challenging to be realistically implementable. Firstly, the Dutch bioplastics market is highly competitive, with numerous established players including companies that are already working with PHA^{5, 6}. This creates intense financial and technological demands for market entry, which require financial and operational resources that could be very difficult to access. Moreover, the Netherlands has enforced stringent environmental regulations, particularly in waste management and sustainability, necessitating substantial compliance efforts and investments. As such, we would ideally horizontally merge with a company that already has an established customer base and production facilities.

However, if a horizontal merger is not possible, we plan on pursuing a proof-of-concept and patent this as a more pragmatic and cost-effective strategy. This approach would enable us to seek more manageable initial investment, allowing focus on research and development instead of extensive production facilities. After we have completed our proof-of-concept, we would patent our PHA production strains and possible associated technologies. This would safeguard our innovation and give us control over its use and licensing. After patenting, we intend to license our PHAse Out technology to existing bioplastics producers or partners. This alternative and more streamlined strategy would allow us to generate revenue without the challenges and costs of running a production company.

Plastics in agriculture

The plastic industry is gradually recognising the need for biodegradable plastics, reflecting an increasing awareness of the environmental toll of traditional plastics⁷. While this is clearly a positive step towards sustainability, the current state of biodegradable plastic production is far from perfected. Manufacturers face challenges, including finding the right balance between durability and degradability, ensuring cost-effectiveness, and scaling up production. In our case this would be facilitated thanks to M. extorquens which can produce co-polymers that are suitable to use for bioplastic applications. As consumer demand for eco-friendly alternatives continues to grow, PHAse Out's PHA production will gain momentum, paving the way for a greener and cleaner future.

Regulations on plastics

In 2022, the EU brought forward a green deal to reduce the amount of plastics. This deal includes eliminating unnecessary packaging, limiting over-packaging and providing clear labeling to improve correct recycling. This law aims to reduce packaging waste by 15% by 2040⁸. Additionally, on the 25th of September 2023, the EU brought forward a new restriction regarding microplastics stating that "any synthetic polymer particles below five millimeters that are organic, insoluble and resist degradation" may not intentionally be added to products⁹. These include for example cosmetics, fertilizers, glitter, plant protection products, medical devices, medicines, fertilizer coating and many others⁹. For the plastic industry, this means that new business opportunities will arise, especially for small companies such as start-ups. PHAse Out intends to capitalize on this movement by producing plastic that meets the new regulations. Our main target sector for biodegradable PHA is the agricultural sector. Plastics in soil break down into microplastics that pollute the environment. Given the inherent properties of PHA, the material is ideal to make for example mulch films or slow-release fertilizer coatings. As the time of biodegradation lies between 6-10 weeks, the plastic will serve its use, but not stay behind in the form of plastic waste or micro-/nanoplastics¹⁰. This makes PHA a great candidate for use in the agricultural sector.

Need for environmentally friendly production

Although we would need to conduct a complete Life Cycle Assessment upon launching PHAse Out as a start-up, we can already see that certain aspects of our production reduce the carbon footprint compared to regular production of PHA. We cater to the demand for environmentally friendly products by utilizing green methanol as the carbon source for PHA production (Figure 1). PHA is typically produced in Escherichia coli using carbon sources such as sucrose, glucose, or starch¹¹. This causes competition with our food production¹². Additionally, expanding the production of plastics using sugar would further agricultural expansion, which causes deforestation¹³. More about this can be read on our Sustainable Development Impact page . This is why PHAse Out uses green methanol, as it allows for a carbon neutral production process that does not compete with resources needed for food production.

Key activities

iGEM
iGEM serves as the cornerstone of our project, providing the initial spark and framework for the development of the project. The first research on our production strain was performed during our work for iGEM, leaving us with promising results.

Access funding
Securing financial resources is the initial step to support our PHA project. It enables us to participate in the iGEM competition, conduct research, acquire materials, and, later on, cover operational costs. During the iGEM competition we have done this through our crowdfunding and via sponsorships . For scaling our project after iGEM, we can apply for funds as described in our section on financials. Eventually we will require larger investments to allow large scale production.

Proof of concept complete
In this step, we validate the feasibility of our production process and test its effectiveness in generating biodegradable plastics. We test the biodegradability of our agricultural product(s) to ensure it meets the wishes and demands of customers. This key activity ensures our technology works as intended.

Register the company & patenting
Establishing a legal entity and patenting our PHA production technology safeguards our intellectual property and allows us to operate as a legitimate business.

Horizontal merger + R&D
Exploring partnerships or mergers with companies specializing in related technologies can accelerate our research and development efforts, leading to quicker progress.

Access large bioreactors and facilities
Gaining access to bioreactors and large-scale research facilities is crucial for optimizing PHA production processes and scaling up our operations efficiently.

Scale-Up
Scaling up our production is a pivotal step to meet market demands, and is generally required to improve cost-effectiveness of a process. This involves transitioning from lab-scale production to industrial-scale manufacturing.

Produce PHA
The core activity is producing PHA on a large scale, utilizing the optimized processes and facilities established during earlier stages.

Establish distribution channels
Building distribution networks and partnerships ensures that our PHA-based products reach customers effectively and efficiently.

Marketing of PHAse Out
Promoting our product as an eco-friendly alternative to conventional plastics helps PHAse Out environmentally harmful materials from the market while increasing awareness of our brand and mission.

Sell to target audience
Identifying and reaching out to our target audience, such as agricultural businesses seeking sustainable alternatives to plastics, is vital for market penetration.

This business plan will help keep in mind the different goals and milestones to build a successful business. All of these steps however cannot be carried without help, which is why we have identified key partners we would collaborate with below.

Key partners

We need several key partners for the development of our company. To start, Luris, the Knowledge Exchange Office for Leiden University, can provide help with trademarking, registration, and offer additional guidance on intellectual property. Additionally, Unlock_ is situated at the Leiden Bio Science Park and stands out as the sole startup incubator in the Netherlands specialized in Life Sciences and Health. They provide startup support, structure, programs, network and the instruments that startups need to turn an idea into a solution. Working with Unlock_ will make sure that our business gets off to a strong start. Additionally, we will require lab space. We might be able to get such lab space from DSM (Biotech Campus Delft), a biotechnology center in Delft which could provide the necessary R&D facilities for PHAse Out, as recommended by Stéfan Ellenbroek . Leiden University and TU Delft already have many ties and collaborations, which facilitates requesting workspace from DSM for a Leiden University-associated project. Additionally, we will require more raw materials, therefore we may collaborate with several businesses on this. Given that they have a wide selection of items, SigmaAldrich is a wise choice during the R&D phase. Later, we will move to providers such as Univar Solutions to buy in bulk for the production phase. Additionally, bioreactors are required for the generation of PHA. Bioreactors that can be customized and sold sterile are made by Sartorius, but may also be obtained through a horizontal merger or ideally from Leiden University. To stay up to date with current regulations on bioplastics we should partner with the RIVM.

Key resources

Readily available resources will make the decisive difference in the success of our business. The first and most important resource at our disposal is the team that put together the initial elements of PHAse Out. The experience, knowledge and advisory board in addition to the hard work of the team-members and supervisors will be key in bringing our PHA to the market.

Our unique method for producing and extracting PHA is also important as without it, we could not meet our stakeholders' needs, nor would we have any value propositions. To keep constantly improving our product, we'll have to test it with real stakeholders and improve it. We will need input from farmers and researchers who know about user experience. We also need funding, and that's where organizations that give grants come in. Also, we need lab space and materials for both our R&D and commercial activities. PHAse Out relies on the support of Leiden University, both financially and for their well-established reputation. They also have expertise on intellectual property together with PLNT, which will be of great help. As we start selling our product, we will need help with business and sales, which we can acquire from places like PLNT and Unlock_. Lastly, we'll need expertise on supply chains as this is a crucial aspect of product distribution.

Research and development

We have several experiments planned out to develop and optimize our strain when we have acquired funding for future research and development after iGEM. In our discussion with Prof. Dr. Han de Winde , professor in biotechnology, he recommended focusing on increasing methanol tolerance of our strain by directed evolution. Allowing for higher methanol concentrations in industrial scale bioreactors will lower production costs and potentially gain higher yields. Secondly, he recommended to integrate enzymes from different metabolic PHA pathways into M. extorquens to allow for co-polymer composition of PHA with properties optimally suited to the market demand. Finally, he recommended investigating the possibilities to transfer the PHB-pathway to more robust microbes with well established industrial applications. A specifically interesting microbe is Ogataea polymorpha (O. polymorpha), a methylotrophic, robust yeast which has been used for the last 30 years in biotechnology for synthesis of a variety of compounds³⁶. Integrating the PHB-cycle of M. extorquens into O. polymorpha is promising in terms of industrial applications. However, he also stated that transferring the desired property of the high PHA accumulation of M. extorquens might give complications. This final strategy is suggested if industrial scale cultivation of M. extorquens would be found non-feasible.

Value proposition

The value of our PHA lies in its green, cost-effective properties in addition to the social entrepreneurship aspect of our business. PHAse Out's PHA is biodegradable and made from green methanol as opposed to sugars, making it a sustainable alternative production path. The social entrepreneurship aspect will make PHAse Out a more desirable company to be associated with when purchasing materials, thus making it a valuable asset to the reputation of the company. PHA as a material is customizable and can thus be adapted to fit many different applications. Scaling up the production is possible given our location and connections. This alternative production will reduce the dependency on fossil fuels to produce plastics. Additionally, PHA has good regulatory compliance, as it does not leave microplastics in the environment and complies with various other environmental regulations and sustainability standards. Thanks to the biodegradable properties of PHA, we will have cost-savings in the long-term with regards to reduced disposal costs and better brand reputation. The innovative aspect of both the production and the product itself will give us an edge upon entering the market.

Customer relations

Companies manufacturing PHA will be the main revenue stream for our business. We will aim for long-term relationships with large manufacturers of PHA, that will make the bioplastics into any desired product. We will eventually provide highly competitive prices due to the efficiency of our PHA strain , meaning that there will be a transactional relationship with end-users, as products can be more affordable. Although we will primarily promote our PHA to mulch-film producers and fertilizer-granule companies, we would collaborate with other companies that aim to make their product more sustainable by switching to PHA-based alternatives.

Channels

Our company will set up communications, sales and distribution channels. Adequate communication will ensure that we can reach our customers and deliver our value proposition. Communication will be key in first making proposals to investors and later making sales to customers. This can be done by joining conferences, holding lectures and joining networking events. Distribution will be carried out by an external party, as we would only specialize in the production of PHA.

Customer segments

Our main customer segment consists primarily of companies that will use our PHA to manufacture products for the agricultural sector due to its optimal application in that field. Potential customers would be companies such as Yara, a fertilizer company based in the Netherlands or Oerlemans Plastics, a company that produces biodegradable mulch films. The second segment consists of actual farmers who purchase our PHA-containing plastic tools and equipment for crop enhancement. Other potential buyers are agricultural packaging suppliers, who provide packaging for foods that need to be stored until they reach the end-consumer. Additionally, retailers and distributors may be interested in selling out PHA, once we reach a good market price. Lastly, ecologically aware consumers would be interested in our PHA, due to its environmentally friendly properties, no matter what their intended application may be.

Cost structure

In terms of costs, our main expense would be R&D. Before being able to make PHA, we will further optimize our strain for most efficient PHA production. Then we would require funds to patent our strain and register our company. To pursue social entrepreneurship, we will finally support agricultural systems that would benefit from, for example mulch films, with our optimized PHA production method. Mulch films would for example be extremely useful in arid or semi-arid regions, as they increase both soil temperature and crop yields, and reduce evaporation³⁷.

Revenue streams

In the short term, our project will be funded mostly by R&D grants. To support our efforts in research and development, we should be eligible for grants or funding from public or private organizations. Partnering and collaborating with universities, research institutions, or other organizations of a similar nature for shared research projects or product development is another way to secure funding in the short term. These collaborations may generate revenue through grants or shared product sales.
In the medium term, we could generate revenue by licensing out our PHA production strain and knowledge to other businesses that are interested in producing PHA.

In the long-term, our revenue will stem from the direct sales of PHA to all