Chems face future of climate change, protectionism - Dow exec

24 March 2010 20:01  [Source: ICIS news]

HOUSTON (ICIS news)--The world chemical industry will continue to face challenges from tight energy supplies and industry consolidation to climate-change regulations and protectionism - all trends that the industry can help shape to its advantage, an executive with Dow Chemical said on Wednesday.

In the upcoming years, the chemical industry will continue to consolidate, and its centres will shift towards emerging markets, said Juan Luciano, a senior vice president at Dow. He was the keynote speaker at the World Petrochemical Conference held in Houston by Chemical Market Associates Inc (CMAI).

That shift could encourage protectionism, a trend that the chemical industry needs to fight, he said. “Our industry’s survival depends on free trade.”

Energy supplies will remain tight while demand will increase as the world economy continues to recover, he said.

To adapt to the changing world economy, chemical companies need to consider selling off some businesses, acquiring new ones or establishing joint ventures with other firms, he said.

Luciano also expects the world’s population will continue growing, creating more demand for housing, food and potable water. More people in developing countries will escape poverty and become consumers, creating new markets, Luciano said.

At the same time, consumers in developed countries are demanding sustainable products that consume fewer resources, he said.

Likewise, governments around the world will attempt to address climate change, Luciano said. While regulations are needed, they must be based on science, and they must be coordinated.

A hodgepodge of regional regulations would complicate compliance, heighten uncertainty and aggravate what is already a difficult process of developing new plants, Luciano said.

However, the new regulations can create new markets for chemical companies, which can produce products and materials that can reduce greenhouse gas emissions and save energy, Luciano said. In fact, chemical companies have done this for years.

Insulation has helped buildings consume less energy, Luciano said. Plastic packaging has replaced materials that would otherwise produce more carbon, create more waste and consume more energy.

“Who knows energy better than us?” Luciano asked. “Our industry has the opportunity right now to be at the forefront of the green revolution if we chose to.

“Someone will develop a solution to climate change,” he said. “Why not us?”

In fact, the industry needs to do a better job of explaining how it can address such issues as climate change, Luciano said.

“We cannot allow others to portray our industry as the enemy,” he said. “We must tell our story at every opportunity.”

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
To discuss issues facing the chemical industry go to ICIS connect

By: Al Greenwood
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