Circular economy a distant idea, German car makers to fight the EV battle - Wacker CEO

14 March 2018 09:39 Source:ICIS News

MUNICH, Germany (ICIS)--The advent of a greener industrial economy where companies fine-tune their recycle and reuse methods could be an opportunity for chemicals to enter new sectors, but that "ideal world" is still far off, according to the CEO at German chemical producer Wacker Chemie.

Rudolf Staudigl added that Germany’s powerful automobile industry is not losing the train of electrification despite other producers – notably Tesla in the US – being at the forefront of electric vehicles (EV) production.

The CEO made his remarks on the sidelines of Wacker’s annual results presentation on 13 March in Munich, Germany.

The EU’s executive body, the European Commission, published in January its latest targets for recycling, which aim for all plastics packaging to be recyclable by 2030, with 55% of them actually being recycled.

Wacker’s Staudigl said that plastics producers may find a new business niche in the recycling industry, and argued that many of the products the industry already produces are fully recyclable.

“If you produce modern products, you are not afraid of recycling [because] you can do some of the recycling, which we already do with some of our silicones… If the whole industrial environmental is changing, indeed recycling could be a part of the business concept, why not,” said the CEO.

“Imagine the ideal world: you take carbon dioxide [CO2] from the air to make organic materials, using photosynthesis to make carbon-based materials. Once used, it is recycled as CO2: You can simply burn it, because you produce the new raw materials out of the CO2: This would be the sort of ideal world.”

The ideal world would be complemented by new forms of energy production, like that coming from wind, solar or water. However, the cost efficiency of each of these processes still determines their use, said Staudigl, because companies need profitable production methods.

“All these processes are known already, but they are not economical and efficient. However, we can draw up the theory and work towards it,” he said.

“There are some basic chemical reactions that we need to make economically efficient.”

Other chemical executives have also said recycling offers opportunities for their business. However, BASF’s CEO Kurt Bock said in February that petrochemicals still have a long way to go as feedstock for the polymers industry.

INEOS’ director Tom Crotty also said the plastics industry is willing to take part in the circular economy concept, but demanded better EU-wide recycling policies and collaboration between packaging producers and its designers to create products that are fully recyclable.

Wacker’s Staudigl said he was not worried about the prospects of German automobile manufacturers as transport electrifies going forward. The car industry in Germany is a key part of the country’s manufacturing sectors, feeding activity in many other associated sectors.

While some analysts have said that by 2029 it will be “game over” for conventional combustion engines, Staudigl warned that “we should not count out” that type of vehicle for the time being.

“I think the future will be a combination of many things, and I don’t think German automobile producers need to be counted out. I think the use of hydrogen as a source of energy via the fuel cell will be important to generate electricity for EVs, for instance,” said Staudigl.

“German car manufacturers are powerful entities, much bigger than Tesla. I am not worried about that [German producer losing their top position in the world’s auto market].”

Wacker’s CEO said in 2016 that the 19-country eurozone needed capital investment to spur growth at a time when the currency area was only emerging from its long economic crisis post-2008.

While the economy has improved across the eurozone, Staudigl still thinks more capital investment is needed in Germany and elsewhere, but was sceptical the current government structures in his country would facilitate the enterprise.

“Nothing has been done in the last two years. They [politicians] always have these intentions, but one of the big obstacles for the investment is that the planning capacity is not there: Germany does not have enough people to do all the detailed planning needed for these type of projects,” he said.

“And, of course, all the public opposition [in Germany] in changes to modernisation: That’s a fact.”

Asked whether companies and individuals should be taxed more to fund the modernisation projects he was asking for, Staudigl emphatically denied that would be necessary.

“We [companies] are paying enough taxes and the state is getting enough money: They just need to put more money into investment, rather than in consumption. The same way a company does, if you invest in profitable things [it will pay off in the future], but if you only consume you don’t make any progress [in terms of long-term investments].”

As the EU’s chemical regulation Reach reaches its final stage with the registration of amounts between 1 and 100 tonnes, Staudigl was adamant that the costs of implementation continue to be too high, adding that chemical companies in other jurisdictions do not have to bear the burden of stringent regulations like Reach.

“We have been complaining about that [Reach’s cost] for a long time and nothing has changed, so we are still complaining. The cost of Reach is very high, especially for small companies for whom the cost is over proportioned,” he said.

“This is an obstacle for the chemical industry [to thrive in Europe]. If everybody in the world had the same conditions everything would be fine, but that is not the case.”

Picture source: Wacker 

Interview article by Jonathan Lopez

By Jonathan Lopez