EPCA: Industry acts to meet green target

27 September 2013 11:04  [Source: ICB]

The chemical industry has been dealing with EU legislation in recent years aimed at making the world a safer and healthier place to live and work in. More than 130 separate environmental targets and objectives have to be met in Europe between 2010 and 2050 in a drive to cut energy use, pollution, and waste generation.

For today’s chemical leaders, the environmental topics dominating their businesses are Reach, increasing use of renewable resources, energy reduction and carbon emissions. Perhaps the most trendsetting regulation has to be Reach. It is said to be the most complex legislation in the EU’s history. The regulation, which has its third and final registration deadline in 2018, has forced companies to evaluate their products and improve the sustainability of their portfolios.

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Peter Holicki, EPCA vice president and vice president of operations for Europe, Middle East & Africa at Dow Chemical, says: “The chemicals industry recognises and accepts the shared responsibility placed by Reach on all participants in the value chain. Like other regulation, Reach should be enforced in an equitable manner and harmonised across Europe to support the competitiveness of the industry and the operation of the single European market.”

TRANSATLANTIC APPROACH

Holicki adds that another important trendsetter for global standards and common principles will be the Transatlantic Trade and Investment Partnership (TTIP). He says this is an ideal opportunity for the EU and US to share approaches to energy and natural resources efficiency, trade facilitation and regulatory cooperation. He comments: “A shared transatlantic approach can do much to remove hidden trade barriers and provide a win/win for consumers, businesses, employment and the environment.”

Energy reduction is even more of a top priority given today’s rocketing costs. Companies such as AkzoNobel, Bayer Material-Science and LANXESS are pursuing rigorous targets to reduce their consumption. Andre Veneman, corporate director of sustainability & health, safety and environment (HSE) at AkzoNobel, says the company has set three specific targets to 2020. These are a reduction of 25-30% in its carbon-equivalent footprint on the energy and raw materials it consumes; eco-product sales to provide 20% of overall revenue (currently 11%), and renewables to supply more than 46% of its energy needs (33% today).

Veneman adds that the company’s operational eco-efficiency has improved by 20% in the 2009-2013 timeframe, with a 30% improvement aimed by 2015, and 40% by 2017.

At Bayer MaterialScience, green sources provide 15% of its energy requirement, and combined heat and power (CHP) plants account for some 60% of its current energy demands. Tony Van Osselaer, head of industrial operations at Bayer MaterialScience, says implementing the energy management system StrucTese has resulted in it meeting its 2020 emission targets some nine years ahead of schedule.

The company has also invested considerable sums in more sustainable production processes which have resulted in gas-phase technology for isocyanate production, hot-melt polycarbonate (PC) technology, and oxygen-depolarised cathode (ODC) technology to produce chlorine more efficiently.

The gas-phase technology is now being incorporated in a new toluene di-isocyanate (TDI) facility at Dormagen, Germany, resulting in a 60% reduction in energy consumption compared with the old plant, as well as a drop in CO2 emissions of around 60,000 tonnes/year. Van Osselaer adds: “We are proud of the fact that all of our processes have a resource efficiency yield beyond 97%.”

ENERGY AND EMISSION CUTS

Germany’s LANXESS, taking 2010 as a base year, aims to cut both CO2 emissions and energy consumption by 10%, and volatile organic compounds (VOCs) by 30%, by 2015. The company has implemented several initiatives at its sites. Examples include the butyl production facility in Zwijndrecht, Belgium, where CO2 emissions have dropped by some 80,000 tonnes/year, and Krefeld, Germany, where emissions of climate-unfriendly gases have been cut by about 80% versus 2007 levels.

Renewables are another focus. Bayer MaterialScience is using a high volume of sugar to produce polyols and has also started to examine other bio-based raw materials for their suitability in manufacturing coatings. However, Van Osselaer warns there is still a long way to go.

Another idea is using CO2 as a raw material and Bayer MaterialScience plans to build a new plant in Dormagen, Germany, to take carbon from CO2 as feedstock for polyol production. Commercialisation is projected from 2015 and Van Osselaer expects polyurethane (PU) foams will be made from this process in the future.

AkzoNobel has been busy too in building up its renewable sources. This year, it has partnered with Solvay under a three-year deal that will see AkzoNobel progressively increase its use of Solvay’s bio-based epichlorohydrin (ECH), Epicerol, which is made from renewable glycerol. By 2016, AkzoNobel aims to source 20% of its total ECH demand as bio-based material.

Another agreement was made this year with US-based Solazyme to develop advanced tailored oils (from algal oil) for AkzoNobel to use in its surfactants and decorative paints.

Chemical companies are also helping their customers and end-users to improve their environmental impact. “We should integrate people and planet issues into our strategy, as well as understand and be part of the transition that needs to take place in end-markets,” Veneman emphasises. He says by 2050, [new] housing could become energy positive, while small vehicles could be 80% more fuel efficient.

In a trendsetting move, and one Veneman hopes will be followed by other companies, AkzoNobel has developed a resource efficiency index. The report has been tested with NGOs and among the financial sector and will become part of AkzoNobel’s annual financial reporting system. “We will report on an innovative new index measuring how we improve resource efficiency across the full value chain - compared to the value we generate” explains Veneman.

Although the European chemical industry has been working hard to reduce energy use and carbon emissions, it has major concerns that energy and climate change policies are damaging competitiveness and future growth prospects. The term “a level playing field” is a constant refrain as companies say that current national and supranational policies are isolating Europe from the rest of the world. They say regulations need to be harmonised with more attention paid to the actual cost of compliance.

William Garcia, executive director for sustainable development, energy, health, safety and environmental policies at industry association Cefic, states: “We need to consider the regulation of environmental compliance on a global playing field. Anything that comes from European policy making that is not aligned with the rest of the world may lead to a loss of competitive advantage for European operations.”

LOW-HANGING FRUIT IS GONE

Garcia says significant reductions to benefit the environment have already been made. “We have been able to pick and use the low-hanging fruit in the last 20 years. That is now over. Another big step forward requires more investment and more attention from the policy makers on analysing the cost benefits.”

Cefic and consulting firm Ecofys have produced a study suggesting that Europe can achieve low-carbon economy goals while retaining a vibrant chemicals sector, securing jobs and future growth. The study explores different energy policy scenarios in the period 2020-2050: the optimum scenario, based on a ”level playing field with global carbon prices” produces considerable climate change benefits. If the playing field is not levelled, then chemicals production will move out of Europe – exactly what the industry fears, and what politicians and policy makers should fear.

The chemical logistics sector too is under pressure to cut emissions and use energy more efficiently. Hans-Joerg Bertschi, EPCA treasurer and CEO of intermodal operator Bertschi says more investment needs to be put into railway infrastructure to boost the development of Swiss intermodal transport, which is targeted to cut emissions by 50% by 2050.

Bertschi comments: “If the political programmes are developed in a smart way, then they will not significantly increase the cost burden for industry but will improve the environmental situation in Europe. The chemical industry needs market openness and the most efficient energy policy. There remains a lot to be done at the political and corporate level.”

Certainly much needs to be done to unite opinion on the EU Emissions Trading System (ETS) launched in 2005. It is a major pillar of the EU’s climate policy. Set on a cap-and-trade principle, companies can trade their unused carbon allowances. But contention has arisen over the price of carbon credits, which are now around €4 ($5.25), much lower than the €30 anticipated. Because of this, some companies cite ETS a failure and ineffective because of its pricing mechanism. Yet, others say the EU ETS is an effective and market-economy-based system, which is reflecting the supply/demand balance.

EMISSIONS TRADING ISSUES

In addition, there is a surplus of allowances because the economic crisis has depressed production, and therefore emissions, and weakened demand. The Commission is proposing to postpone, or backload, the auctioning of some allowances, a move the industry has strongly rejected.

Cefic supports the ETS and says the directive is doing its job in cutting emissions by 20% by 2020, but it is against the backloading of allowances. “We must not have political intervention in a market-driven mechanism. It is not sending the right signal at the right time,” Garcia says.

Europe can lead the world in climate protection, but not at the expense of industry competitiveness. All players in the chemical industry value chain, including non-government organisations and academia, and the policy makers must act faster, smarter, and, most importantly, together. Real leadership at corporate and government level is required to drive the pace and consistency of sustainable environmental goals.





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