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With just two weeks to go before the opening of London 2012, millions of visitors are preparing to descend on our capital city. But will London deliver, in David Cameron's words, "the greenest Games ever"? And how will the chemical industry contribute?

An estimated 8,000 tonnes of waste will be collected across the Olympic venues, and London Organising Committee of the Olympic Games (LOCOG) aims to recycle 70% of it. Phil Cumming, corporate sustainability manager for LOCOG, is in charge of meeting this target. He admits that the company "has come up with an approach which has not been attempted at this scale", but remains confident that they will succeed.

LOCOG and government-funded WRAP present a wealth of ways in which they will attempt to execute this task in the 'London 2012 Zero Waste Games Vision.' It describes, for instance, the alliance of Coca-Cola and SITA UK. The two companies will create recyclable PET bottles, containing up to 25% recycled content (rPET). These will be reprocessed, as with all clear PET bottles discarded at the games, and with the help of ECO Plastics, within an impressive six weeks. Similarly, products will be served in recyclable polypropylene (PP) cups whenever possible.

As these PET bottles account for around 30% of the Games' predicted total waste, these companies' work is crucial to London 2012's efforts towards sustainability. 

The Dow Chemical Company is another example of the chemical industry's involvement in London's 'Zero Waste' Vision, and goes far beyond recycling. George Hamilton, vice president for Dow Olympic operations, described the games as "a great platform" for sales, predicting to generate over $1 billion revenue during their ten-year Official Worldwide Olympic Partnership; but the US company's intentions are not purely mercenary. Dow's goal is to "provide solutions that help make the Olympic Games more sustainable"; this is apparent through their contributions to London's rapidly-approaching Games.

Dow's Plastics Division, for instance, provided the sustainable fabric wrap to surround the iconic Olympic stadium. Compared to conventional materials, it will have a lower carbon footprint, require fewer raw materials in manufacturing, and will be recycled following the Games. The printing process will also reduce emissions and eliminate volatile organic compounds (VOC). Their Performance Plastics Division has also developed sustainable high-performance polyethylene resin used to make the artificial grass for the Olympic hockey pitches.

Despite the efforts of both the chemical industry and those planning this summer's Olympics, it seems the sustainability plans central to London's winning bid were too ambitious.

As well as concerns about pollution and failures to meet 20% renewable energy targets, London 2012 is set to damage the environment through breaking their 'Zero Waste' promises. Some food waste will be sent to landfill, and a reported 99% of demolition materials were not reused.

Plans for a low-carbon Olympic torch were also scrapped as EDF Energy failed to develop it in time. According to Shaun McCarthy, chair of the Commission for a Sustainable London 2012, what would have been an "unequivocal demonstration of London's commitment to a truly sustainable Games", has been replaced with a less sustainable torch, using a formula of butane and propane.

Many have voiced their concerns about the reality of London 2012's impact on the environment. Darren Johnson, London assembly Green party member said the organisers "are a long way short of the inspirational revolution in environmental policy we were promised."

Obviously, the reality of the Olympics' sustainability will remain unclear until the last bottle has been binned. The work of LOCOG, WRAP and companies such as Dow certainly seems to have pushed London in the right direction. But the greenest Games ever? I'm doubtful.

By Becky Wilson

 

 

 

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The sky's the limit

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After eighteen hours and 898km of strong headwinds, turbulence and even some backwards flying, Bertrand Piccard's plane landed successfully in Madrid without the aid of a single drop of fuel.

On Friday 6th July, the aptly-named Solar Impulse completed the returning leg of its first intercontinental flight, powered only by the sun and with a 90-strong team of engineers, technicians and mission controllers behind it. But this huge achievement was not without its difficulties.

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As well as the unpredictable meteorological conditions which caused the flight to be postponed by three days, Piccard and his team were dragged back down to earth with many technical problems.  Jacques van Rijckevorsel, responsible for chemical group Solvay's involvement in the project, likened the plane to a "flying laboratory" last year and admitted the $100m project had been "extremely demanding". Indeed, without the help of their partners including Solvay and materials provider Bayer Material Science, Solar Impulse's triumph would not have been possible. Bayer Material Science's researchers contributed ideas on both lightweight construction and energy efficiency, while Solvay conducted computer-based simulation to predict the behaviour of these lightweight materials during flight.

The project commenced in 2003, when Swiss duo Piccard and André Borschberg envisioned a plane powered entirely by the sun. 11,628 monocrystalline silicon cells, a hundred partners, nine years and two prototypes later, their dreams have come true. The commercial-airline-sized prototype first took off in 2010, and since then has also flown up to twelve hours and through the night. But last week's intercontinental success was the first of its kind and will remain a milestone for the Solar Impulse project.

Despite their previous successes, the sky remains the limit for Piccard and Borschberg. In 2013 Solar Impulse will attempt to break the round-the-world record in five legs of five days. And for these aviation pioneers, as well as saving energy and demonstrating solar power's potential, they view their accomplishment as "a symbol that affects all of us". As the project's website states, solar aeroplanes are unlikely to ever carry 300 passengers. But Solar Impulse's triumph shows us that a sustainable future for air travel may be on the horizon.

By Becky Wilson

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By Jade Tinslay 

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As Poland prepares to fully exploit its shale gas reserves, the rest of the EU watches with interest following a spate of controversy in which campaigners across Europe called for a moratorium. The resolute message was that, until further research into the environmental and economic impacts of the technology had been conducted, opposition to fracking plans would be rife.
However, the UK recently saw MPs give the go-ahead for drilling their own shale deposits, with the Department for Energy and Climate Change (DECC) preparing to issue more licences around the country. 
The British Geological Survey estimates that onshore shale gas could supply 1.5 years of the UK's total gas needs, with an economic worth of approximately £28 billion. It has been speculated that offshore resources could be even larger, although more costly to recover.
However, the UK is believed to have significantly fewer shale gas deposits than Poland (although it does have a lesser reliance on gas imports) and, hence, the UK's shale plans are unlikely to be "game changers." Interestingly, many other countries such as Germany, Italy, Spain, Sweden, Switzerland and the Netherlands are all suspected to contain commercially viable deposits too. 
Unfortunately for these countries, the relatively new resource is proving much disputed in Europe, with pro-nuclear France banning shale gas production on its territory altogether. 
Accusations against the technology include poisoning water supplies, producing copious volumes of green house gasses, destabilising the landscape, and stealing investment from renewable and nuclear technologies. To me, this definitely does not appear to support the EU's plans for a more sustainable future. 
However, the industry itself resolutely blames bad practice for any negative repercussions -not the actual process. Despite this, there are still many other complications that the technology could face:
A common issue is thinly spread shale deposits which typically 'dry out' quickly and make exploitation far more costly than conventional gas. The geology of shale also fluctuates widely from location to location, spelling additional time and money developing appropriate drilling technology or connections to pipeline infrastructure for the more inaccessible resources. 
Nevertheless, Europe stands to gain much in the long run; namely a lessening dependence on energy superpower Russia for gas imports, a welcome boost to the EU's energy security and increased feedstock for the chemical industry. Sadly, this does not negate other countries damning suspicions, which remain obstinately sceptical about the future of shale gas in Europe.

Jade Tinslay has been  with ICIS for a week's work experience. She attends Wallington High School for Girls
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Imagine how Central and Eastern Europe's chemical industry could be transformed if Poland managed to access the massive shale gas reserves which have been discovered in the country. 
The region's chemical sector currently relies for feedstocks mainly on expensive, imported oil and Russian natural gas. Shale gas could give CEE the same, structural advantage currently enjoyed by US chemical producers who enjoy ethane prices which have disconnected from crude oil.
As US president Barack Obama visits Poland on May 27-28, officials from the country's economy ministry will take the opportunity to meet US shale gas experts, according to ICIS news.  
Recent estimates by the US Energy Information Administration put Poland's shale gas reserves at around 5.3 trillion cubic metres.
This would be enough to meet Poland's annual gas consumption of 14 billion cubic metres for decades to come and put an end to its need to import 70% of its required gas from Russia.
Several companies from the US and Canada, where shale gas extraction has been pioneered, already have licences to drill in Poland.
Lane Energy Poland, a subsidiary of Isle of Man-based investment company 3Legs Resources, is drilling a third well in northern Poland after promising results from its first two wells.
French oil company Total has signed an agreement with US oil giant ExxonMobil to acquire an interest in the exploration of shale gas in Chelm and Werbkowice. US oil major Chevron has also obtained a licence to search for shale gas.
Polish refining, chemicals and petrochemicals group PKN Orlen has said that in 2012 it is to launch an upstream business with its own oil and gas extraction and energy production units. The strategy envisages a move into extracting and processing shale gas.
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The news that Russia's Gazprom is expanding storage terminals across Europe in anticipation of increased supplies could be good news for Europe's chemical industry, which relies heavily on natural gas for power generation. 

Gazprom is almost doubling its underground storage capacities for gas by 2015 to nearly 4.9 billion cubic meters (bcm) and by next year to 6.5 bcm, according to an article in the Asia Times Online

The facilities are being expanded in anticipation of the successful startup of new pipelines  
known as South Stream and North Stream.  

"The increased storage facilities in Austria will cater to the markets in Slovenia, Croatia, Slovakia, Hungary, Germany and Italy. A new storage, Katrina, which Gazprom is building as a joint venture with VNG in Germany, will support gas exports to Western European hubs. Gazprom built another joint venture storage facility with Serbia that will support gas exports to Serbia, Bosnia-Herzegovina and Hungary. Feasibility studies are being conducted on similar joint storage projects in the Czech Republic, France, Romania, Belgium, Britain, Slovakia, Turkey and Greece. 

"With this, the "gas map" of Europe, which was largely drawn in the Soviet era, is poised to undergo a phenomenal change. The great consolidation of Russia's status as the pre-eminent energy supplier - Russia today supplies over 41% of Europe's gas needs - is certain to transform east-west relations in the medium and long term and will figure as a key factor in the United States' trans-Atlanticism." 

Gazprom will also be delighted at the news that the Nabucco pipeline has been delayed from 2014 to 2017. "Reinhard Mitschek, managing director of Nabucco Gas Pipeline International, revealed the construction work stands postponed by one year at least to 2013. He left things delightfully vague, saying gas would flow through the pipeline "as soon as there are firm indications that gas supply commitments are in place". 

"Nabucco was conceived to funnel gas 3,900 kilometers from Turkey to Austria and was designed to carry 31 bcm of natural gas a year from the Middle East and the Caspian region to markets in Europe. Bypassing Russia, the pipeline would run through Bulgaria, Romania and Hungary to a hub just outside Vienna for onward distribution all across the European Union countries. The Nabucco consortium consists of the energy companies RWE of Germany; OMV of Austria; MOL of Hungary; Botas of Turkey; Bulgaria Energy Holding of Bulgaria; and Transgaz of Romania.
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The privatization of Poland's chemical industry may lurch into action again later this year, according to the country's treasury ministry which gives September for the kick-off.
 
Since 2007, Poland has twice abandoned efforts at completing the sell-off of substantial state-held assets in its chemical industry, citing unsatisfactory bids.

According to ICIS news, efforts at consolidating and restructuring the large chemical companies still not privatised should bear enough fruit by September, along with significant chemical market improvements, to allow for renewed sell-off efforts, the ministry said.

The privatisation's flagship offers will be majority stakes in Poland's largest chemical group Ciech, and Poland's largest fertilizer maker and melamine and caprolactam producer, Zaklady Azotowe Pulawy (ZAP).

A majority stake could also be offered in Poland's second largest fertilizer producer and titanium dioxide (TiO2) producer Zaklady Chemiczne Police (ZChP) provided the company had makes satisfactory progress in overcoming its debts, the ministry said.

Another feature of the privatisation relaunch should shortly see fertilizer, caprolactam and nylon 6 (polyamide 6) maker Zaklady Azotowe Tarnow (ZAT) given the chance to acquire from the treasury ministry the 47% of fertilizer and oxo-alcohols producer Zaklady Azotowe Kedzierzyn (ZAK) it does not own.

If that transaction is successfully pursued, ZAK could then be privatised as part of a single sell-off of the ZAT group, the ministry added.
Observers of the Polish government's efforts to sell off parts of its chemical sector may raise their eyebrows at the news of its relaunch of the privatisations of Ciech, the country's largest chemical group, and fertilizer producer Zaklady Azotowe Pulawy (ZAP) in the second half of this year.
Previous attempts have failed twice thanks to the government's unrealistic expectations on valuations. There is nothing to suggest this situation will improve this time.
Renewed attempts to privatise fertilizer producer Zaklady Chemiczne Police (ZChP); fertilizer, caprolactam and nylon 6 (or polyamide 6) maker Zaklady Azotowe Tarnow; (ZAT); and fertilizer and oxo-alcohols producer Zaklady Azotowe Kedzierzyn (ZAK) are unlikely to occur this year, the ministry said, according to ICIS news.
Ciech is Europe's second-largest soda ash producer, while ZAP makes nitrogen fertilizers and is also a global melamine and caprolactam player.
Today's announcement that Solvay has bid for Rhodia - if successful - will put it into a strong global position in high performance specialty polymers, soda ash and hydrogen peroxide, specialty materials (silica, rare earths), products for consumer markets (surfactants, natural polymers, acetate tow) and engineering plastics based on polyamide 6.6.

Solvay has been sitting on a huge pile of cash since it sold its pharma business and we have been waiting for a large move like this to happen. We had speculated that Arkema might be a target. Rhodia CEO Jean Pierre Clamadieu has done an excellent job in turning the company from what some saw as a bit of a "basket case" into a strong performer which is attractive enough to attract this bid. 

Clamadieu has also done well for himself personally, becoming CEO of the merged companies after Christian Jourquin retires.

Solvay and Rhodia yesterday signed a framework agreement according to which Solvay will launch a friendly cash Offer for 100% of the share capital of Rhodia. The cash Offer at E31.60 per share (ex dividend of EUR 0.5 per share) values the equity of Rhodia at EUR 3.4 billion and the enterprise value at EUR 6.6 billion, representing a REBITDA multiple of 7.3x. 

The Offer represents a premium of 50% compared to the closing price of Rhodia on the 1st of April 2011 and a premium of 44% compared to the average closing share price over the last three months. The Offer will be launched in France and extended to the United States of America. The transaction has been recommended unanimously by the board of directors of Rhodia.

According to the companies, future geographic expansion will be driven by a significant presence in the emerging markets, which already generate 40% of sales of the combined group. The complementary nature of the industrial activities of Rhodia and Solvay should provide the combined group with a balanced presence in its different market segments: specialty chemicals for consumer goods, construction, automotive, energy, water, environment, and electronics.
 

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Imagine if central and eastern Europe had ample supplies of cheap natural gas, gushing from the ground, and lowering ethane feedstock prices across the chemical sector in the region. Such a pipe dream would surely transform the fortunes of the chemical sector in CEE and further afield, in the same way North America is enjoying its renaissance.

This week Poland's prime minister, Donald Tusk, made a personal pledge to open Poland up to the exploration of shale gas. The country currently relies heavily on Russian gas, as does most of CEE. 

The Wall Street Journal's "New Europe" blog reports on Tusk's speech to a local conference.  "I will be engaging myself personally, as the head of the Polish government, in the optimization of conditions for the exploration, research, logistics and the business related to the production of shale gas," he said. "It may happen that one of the fruits of this debate will be what's priceless: a feeling of security and a hope for the future for millions of people....Poles are waiting for this gas."

U.S. energy giants are drilling in Poland after initial geological research showed the country may have substantial amounts of shale gas, mostly in the north and east where some experts predict deposits of between 150 billion and 3,000 billion cubic meters. The discovery of documented deposits could change Poland's energy mix--it now largely depends on natural gas imported from Russia's OAO Gazprom.

"It has to be safe for the environment, technologically feasible on a large scale, it must be profitable. But our determination is clear: every cubic meter of gas in Poland must be used if possible," he said.
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It's refreshing to see that money is being invested in updating and expanding chemicals in Poland. So much news coming out of this country concerns the failed privatization process. ICIS news reports that Poland's Zaklady Azoty Tarnow (ZAT) group will spend up to Zl 300m ($106m, €74.4m) on investments in 2011 with a possible expansion of its polyamide 6 capacity to follow an increase in caprolactam output.
ZAT, which has already committed to boosting its caprolactam capacity to 101,000 tonnes/year from its current 86,000 tonnes/year by the end of 2011, added that it also intends to build a new hydrogen installation.
Currently ZAT and newly-acquired German subsidiary ATT Polymers have a polyamide 6 production capacity of approximately 46,000 tonnes/year each.
ZAT made the investment announcement while reporting its latest financial results.

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