Malonic acid and its derivatives have their own demand as esters and neat acid apart from conversion to 1,3 propanediol. It's possible to catalytically oxidize 1,3 propanediol to malonic acid, so they are somewhat competing in the same space.

The "clean" advantage of these fermentation processes is IMO greater than the "sustainable" part. You could use renewable energy to synthesize all the upstream precursors of traditionally-synthesized malonic acid (e.g. monochloroacetic acid, hydrogen cyanide) from air and seawater and it would be perfectly sustainable. But the intermediate products are hazardous to handle and there's a large waste stream of aqueous salt solutions and organic solvents. Eliminating hazardous intermediates and producing waste streams that can be handled by simple wastewater treatment makes it cheaper to build and operate facilities for these chemicals.

Agreed. Just pointing out that they're going up against an established DuPont process.

Also that process has been around for at least 10 years:

https://www.ncbi.nlm.nih.gov/pubmed/14580573

I met the guy (Charlie Nakamura) who developed the process. It took a hell of a long time to get everything working at useful efficiency, then a fair amount of development to get it working at scale.

Also see others in this space:

Amyris (older synthetic bio company) Zymergen (newer synthetic bio company that seems to be doing some of the same things Lygos wants to do)