Market outlook: Bayer's green impulse

06 June 2014 10:07  [Source: ICB]

Germany’s Bayer MaterialScience (BMS) has put the sustainability agenda high on its list of priorities, going as far as appointing – at the executive board level – a chief sustainability officer, Richard Northcote.

Northcote, who added cross-functional sustainability to his role as head of communications and public affairs in October 2012, takes a broad definition of sustainability – a word which can mean anything from the green agenda to maximising “sustainable” profits for chemical producers, or a mixture of both.

Northcote explains: “We define this as everything from sourcing to production, safety, compliance, logistics and transportation. Most companies stop at the factory gate, but we go beyond that to ask how we can use our technology to assist customers. For example, can we reduce customers’ energy use by 10%?”

Solar impulse Bayer MaterialScience

Rex Features

BayerMaterialScience's head of sustainability, Richard Nortcote (left), discusses the Solar Impulse project. Bayer is a major sponsor

He says BMS aims to manufacture the most sustainable products on the market and also examines use and end of life, whether products are able to be recycled or incinerated, for example. The company audits its own suppliers of raw materials to ensure they are efficient from a sustainability point of view.

To give the business something tangible to aim for, Northcote is currently working together with the business to set targets for 2020. One target relates to the use of bio-based raw materials in the manufacturing process. BMS is looking to a figure of between 8-10% by 2020. The targets will have be finalised by the end of 2014 and will be measured annually, giving the company the option to increase, but not decrease, the targets. BMS has a safety target of 0 man hours lost from injury and the plastics industry as a whole is aiming for 0% of plastics going to landfill or the sea.

“If we don’t do this voluntarily it will be imposed. Legislation is coming in, especially in Europe. There is also a pull from consumers who want to know about carbon footprint and lifecycle. For example, in textiles, if consumers want them to be solvent-free it might as well be us delivering this product,” he says. He believes sustainability is something that the industry has to embrace and, looking at the markets BMS supplies, it has become very high on their agendas too.

“True sustainability is when you take a raw material, process it and then find an end of life for it to re-use the energy from production and to close the carbon loop. It’s about finding the best material for production and the whole life cycle,” he adds.

He points out that there are currently the equivalent of 1bn barrels of oil sitting trapped in plastic which has been discarded to landfill. It is important for manufacturers to clean up the image of plastics as the industry has a legacy which is only partly deserved. Despite it being a different industry to 30-40 years ago, there is a lot of work to be done to convince society that the industry has cleaned up its act. He says trade group PlasticsEurope is moving ahead on communication.

BPA DEBATE

As a major European producer of bisphenol A (BPA) – a feedstock for PC production – BMS has become a strong defender of the product in the face of vocal opposition from consumer groups and increasing scrutiny by regulators. In March 2014, a French proposal to classify BPA as a presumed human reproductive toxicant which may damage fertility was unanimously supported by the Risk Assessment Committee of the European Chemicals Agency.

In February, the European Food Safety Authority (EFSA) published a draft opinion stating that BPA represents a low risk, even for foetuses, infants and small children. For all population groups, oral exposure is below a proposed tolerable daily intake. It also stated that exposure to BPA probably has a damaging effect on the kidneys and the liver, and also affects mammary glands.

Northcote states: “It is totally safe for the applications in which it is used today. There is a very large safety factor between any potential exposure and the current safety limit. This is confirmed by food safety authorities.”

He says BMS stands behind the EFSA report, adding: “The proposal to re-classify BPA is not based on science, there is no need for a reclassification whatsoever.”

Asked what the industry can do to improve the understanding of BPA, he says: “We must tell legislators that there is a time and a place to legislate. Why BPA has become a poster child [for negative views on chemicals] is difficult to say. For the past 60 years, no scientific body has found evidence of damage from BPA. Countries such as the UK and Germany endorse the EFSA report.”

There would only be a limited market impact if BPA was to be banned for food contact packaging, says Northcote, because it is not a huge part of the market. “But if BPA was banned altogether, PC would disappear. If we lose PC, we’ll lose one of the most versatile materials in society. There is no replacement for PC coatings inside cars. You can say goodbye to TVs, phones and car headlamps. Without PC, you couldn’t have plastic stents in medicine, for 
example.”

He adds: “It has become a political hot potato and some people just want to get rid of BPA. As an industry, we let the BPA debate go on for far too long before intervening.”

Northcote highlights how technology can improve environmental performance, especially in energy use where for the production of toluene diisocyanate (TDI) BMS can cut energy use by 40% through gas-phase phosgenation. The hot melt technology employed by the company for PC can cut energy use by 20%, whilst ODC chlorine technology provides up to 50% reduction in energy use. “Our production processes have achieved a huge decrease in energy consumption and the payback on investment is very quick. Now the market is also changing: people are doing their purchasing based on carbon footprint and this is driven by consumer demand,” he says.

However, Northcote believes Europe’s chemical sector is operating at an increasing disadvantage to other regions thanks to damaging energy taxes. “We must have a European energy policy. The German government keeps increasing the price of electricity and we keep reducing the amount we use. But ultimately Europe will be uncompetitive. We must get back to previous levels of industrialisation here; energy prices must be competitive with the US and Asia.”

He says there is nothing wrong with increasing energy prices to stimulate innovation, but it will be impossible to remain competitive in Europe with such big increases in costs.

CO2 FOR FLEXIBLE FOAM

BMS is also developing technology to use carbon dioxide (CO2) as a feedstock for polyether polyols. In May it announced a €15m project which will have 5,000 tonnes/year capacity at Dormagen in Germany with commercial production slated for 2016. It can lead to a 30% cut in oil use for flexible foam manufacturing.

“We’re also looking at other building blocks – benzene is the holy grail. With CO2, once we’ve cracked the chemistry, we need to do a lot of work to see where we can get the benefit. We initially saw it as a raw material for PC and this is still a possibility.”

SOLAR IMPULSE TAKES OFF

BMS is a major sponsor of the solar-powered plane project called Solar Impulse. The second version of the vehicle – the Solar Impulse 2 – was launched in May 2014 and contains a lot of the company’s products.

For example, the doors of the cockpit contain BMS micro-cellular polyurethane (PU) foam, which was first used on this project. It is much denser and will have applications in future fridge technology, for example. The windscreen has its polycarbonate (PC) multi-walled sheets and the company provides the coating that gives the plane its shimmering silver look.

“This epitomises science for a better life. We create products in a more sustainable way which is all about reducing energy use and CO2 production. Solar Impulse is a flying laboratory,” says Northcote.

He admits that BMS has a lot resting on China, but insists that the government’s sustainability agenda will benefit the company. “We moved our PC headquarters out there three years ago and we believe the government is committed to a five-year plan, which is aimed at cleaning the country up, cutting emissions, and creating sustainable industries.”

“Our business model is based on market growth, not cheap energy. We only work with two core chemistries – PC and PU - and these provide niche commodity products with big opportunities for further innovation. If you can identify markets where the pull for more sustainable products is growing exponentially then you’re in a good place.”


By: Will Beacham
+44 20 8652 3214



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