Driving an Eco-Transition
Society is swimming against the tide to fight environmental degradation – the petrochemical and chemical industries want to be catalysts for change.
Looking at today’s world, conditions are not ideal to drive change across organizations. In a context of stalled economic growth due to political instability and trade wars between the planet’s largest economies, the industry’s top executives are probably worried about how to keep sales levels from decreasing, more than anything else. Additionally, in this scenario of macroeconomic stagnation, it may be tempting for world leaders to adopt a populist approach toward critical matters such as controlling forest fires or curbing carbon emissions, by putting short-term economic interests first.
The reduction of carbon emissions is a universal objective across all segments of the economy and wider society, and, of course, it affects the operations of the petrochemical and chemical industry: directly at production sites, and indirectly in terms of the footprint of the different segments of the value chain.
Miguel Benedetto, general director of Mexico’s National Association of the Chemical Industry (ANIQ), explained how the country’s industry is aligning itself with the goals set by the government: “The chemical industry fully shares the emission reduction objectives that Mexico has signed, and we have ratified our commitment through reduction targets of 6% of the baseline. In addition, ANIQ has been certified as a greenhouse gas certification body, which provides support to companies in the certification of inventories of greenhouse gases and compounds.”
In Brazil, the large size of the market and the high volumes required mean that even a small effort to enact change can have a very meaningful impact, and some of the largest players are already working to reduce carbon emissions. Croda, for instance, has reduced its greenhouse gas emissions in Brazil by nearly 10% since 2015, according to the company’s vice-president, Richard Pino. This achievement fits within Croda’s global initiatives, such as the use of alternative energies (be it wind, solar or methane capture from landfills) and sourcing a higher percentage of Croda’s raw materials from renewable resources (up to 61%, according to Pino).
Meanwhile, Jorge Soto, sustainability development director at Braskem, explained that the company reduced carbon intensity by 21% between 2008 and 2018: “In 2018 our intensity was 0.61 tonnes of CO2 emitted per tonne (tCO2e/t), which is very close to our 0.6 tCO2e/t 2020 target. We are confident that our team can continue to improve our processes, and our 2030 carbon intensity target includes a further reduction of 30%.”
Soto emphasized that this effort applies not only to Braskem’s own carbon output during production, but also to the overall carbon footprint of the product over its life cycle. “We are developing new products with lower carbon intensity or that can even capture CO2 from the atmosphere, and we are also supporting society with new solutions such as lighter packaging and spare parts for cars.”
REDUCE, REUSE, RECYCLE
In parallel to the industry’s efforts to reduce the environmental impact of production processes, the world needs urgent solutions to the accumulation of plastic waste. The solution will require a combination of industry initiatives, regulation and co-operation between the authorities and wider society.
“Plastics have been criticized, not without basis, for excessive use in packaging and the irresponsible disposal of these products. We have all seen the accumulation of plastics in oceans, especially in Asia,” commented José Luis Uriegas, CEO of Grupo Idesa of Mexico. “Braskem Idesa is the largest player in plastics in Mexico, and therefore we need to play a leading role in the sustainability of the plastics segment,” he added.
A key issue is that not all companies perceive the scale and best methods for approaching the problem in the same manner: “There is a mix of companies willing to adapt to sustainability efforts and companies only doing so when the regulations are enforced,” said Daniel Mitchell, president of Acoplásticos in Colombia. Yet, he added: “The industry as a whole is transforming quite quickly, but the often unfair demonization of plastic products is also an issue that must be addressed.”
Adrián Schwartz, president of Grupo Simpa in Argentina, shared his views on the issue: “The plastic itself is not the problem, but rather the people who dispose of it irresponsibly create the issues. Rather than eliminating plastics, what should be done is working on the issue of recycling so that we do not continue to pollute the planet.” He added that biodegradable plastic is already available in the market, and while it is still more expensive than conventional plastic, the cost has decreased tenfold in the last five years, thanks to technology.
All in all, several leading players in the petrochemical and chemical industries have incorporated the circular economy as the key priority moving forwards. Braskem, for example, has a circular economy position based on eight pillars – from design optimization for easier recycling and reuse to the company’s participation in global initiatives such as the Alliance to End Plastic Waste.
Fabiana Quiroga, circular economy director at Braskem, gave some examples of the company’s efforts to promote reuse and recycling: “We developed a recycled portfolio with quality products for our clients, and we recently signed partnerships with Tramontina for the use of our PCR resin in their chairs and with Colormaq for use in its washing machines. We have also been working with our clients to increase product recyclability, for instance through 100% polyethylene packaging that eliminates the use of multiple materials.”
If clients are adopting these solutions, it is because they also make economic sense. Indeed, the case for recycling can be bolstered when, in addition to the environmental benefits, producers and clients are able to obtain a profit as well. Having a solution that reduces environmental impact and underlines an economically sustainable business model is an objective that any company can get behind.
Grupo Pochteca, a large Mexican chemical distributor that is also present in Brazil, is investing heavily in areas such as industrial waste management and the recycling of solvents. This strategy is driven by client demand as stronger environmental awareness takes hold across the entire value chain: “Increasingly, the environmental requirements of our clients have become more demanding, because they want to achieve zero waste and contribute to the circular economy,” related Francisco Martínez, corporate director of operations at Grupo Pochteca. “They ask us to be an integral supplier that not only sells the lubricant or chemical, but also collects and treats the used lubricant, solvent or acid.”
Martínez explained that via the solvent cleaning and recovery process, in which the company has invested €2 million for a total capacity of 9.6 million liters of solvent per year, Pochteca can recover at least 75% of the used product. The change is significant considering that just a few years ago, 100% of the solvent was dumped as waste. “This demonstrates that the circular economy is not just a discourse,” said Martínez. “It is a reality that provides a return on investment for both us and our clients, in addition to the ecological returns.”
Broad social skepticism for industry’s impact on the environment is a key obstacle for a range of sectors across the region: from chemicals to mining, to oil and gas and power generation. However, through initiatives like those described above, the chemical industry is working to improve its reputation as a responsible neighbor. In reference to the situation in his home country, Edmundo Puentes, president of the Chilean Association of Chemical Industry Companies (ASIQUIM), commented: “Social acceptance is the biggest issue facing all industries in Chile. We are working very hard to showcase the benefits that the chemical industry can bring to the society.”
By adopting sustainable business models with full life-cycle management of different products, the industry will not only obtain social acceptance and recognition, but also ensure a cleaner and brighter future for generations to come.