Embedding Sustainability into Daily Business

CIEX 2020 VIRTUAL conference is just around the corner and as part of our pre-conference interviews we recently spoke with Pascal Chalvon, Chief Sustainability & Energy Officer at SOLVAY about the highlights of his session on translating sustainability into daily business and the main challenges.

Question #1: Without giving too much away – what is the core message of your talk and what would you like delegates to remember?

Pascal: Sustainability is no more a question for experts and dreamers, it is the responsibility of managers and an expectation of the whole society. Embedding sustainability into daily business requires adapting strategy, governance, metrics and bold goals.

Question #2: Why did you choose the topic of your talk?

Pascal: Beyond great ideas, we need to act. How to make it happen is an interesting question.

Question #3: What motivates you to join CIEX 2020 and what are your expectations?

Pascal:  Sharing our experience with Solvay One Planet, listening to other good solutions, this is a good path to innovate and create sustainable value

Question #4: The need for innovation has been a continued topic for the chemical industry –how would you sum up the current state of the industry, specifically with a focus on its innovation efforts?

Pascal: We are at a turning point where the decision-making process of innovation pipes, for products and technologies, has to integrate the extra-financial factors. Beyond competitiveness and technical solutions, impact on climate, biodiversity, environment, resource scarcity and life respect in all forms become part of the equation. Chemistry is at the heart of any material transformation, being the mother of all industries, has an essential role to play.

Question #5: What must (chemical) industry leaders do to remain competitive and prepare for the future?

Pascal: Industry leaders have to embed sustainability in any decision they take, in everything they do, being aware of the impact of their decisions and act for a better and more inclusive world

Question #6: Looking back on the past 3 months please share your thoughts on the impact of COVID-19 on the industry but also society in general

Pascal: The COVID experience could be characterized by 3 phases: the crisis time, the rebound, the new normal. The first 3 months have been mainly phase 1 and we entered into phase 2 while thinking of what will be the phase 3.

Industry has struggled to mitigate the health and economic crisis, but in the meantime, chemistry has revealed to be essential.

Let us hope that from the crisis will emerge an acceleration for an ecological and inclusive way of life. The society seems to be asking for that, but inequality in front of the COVID also revealed that inclusiveness is essential in the equation.

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Green Deal Impact On Economic Viability: Is It A Question Of Being Profitable Or Being Green?

CIEX 2020 VIRTUAL conference is just around the corner and as part of our pre-conference interviews we recently spoke with Dr. Christian Hartel, Member of the Executive Board at WACKER about the highlights of his session on Green Deal dilemmas and the main challenges.

Question #1: Without giving too much away – what is the core message of your talk and what would you like delegates to remember?

Christian Hartel: Innovation is the key ingredient of Europe’s recipe for competitiveness, not the least for the chemical industry. So naturally, we tend to put a lot of trust into innovation, solving our challenges and paving the way into the future. However, while new inventions and technologies certainly will continue to propel us forward, innovation alone will not be able to bring the Green Deal forward in the way we have envisioned it.

What we need more than ever, is a complementing framework that enables the European Green Deal to work from the bottom-up and that gives economic actors the right tools to put it into practice. While there are many contributing pieces towards this, the access to affordable renewable electricity belongs to the most important ones. It is unarguably the cornerstone of an economy aiming for climate-neutrality by 2050, and a decisive factor for developing and scaling-up the application of key low-carbon innovations such as direct electrification, green hydrogen or carbon capture utilization (CCU) in the wider economy.

However, as long as most of our international partners don’t share the same ambition for climate action as Europe, especially our energy-intensive industry will continue seeing the structural competitiveness gap increase vis-à-vis global players. An illustrative example is our situation, in which WACKER finds itself since a couple of years: In the case of polysilicon, the basic material for solar panels and semiconductors, WACKER faces electricity costs 2-3 times higher than in comparison to its key competitors in Western China, who benefit from cheap electricity prices and other state-backed subsidies, such as cheap financing and land use rights. As a consequence, Chinese producers have been able to drastically strengthen their dominance along the entire value chain of solar panels, at the expense of Europe’s industrial autonomy and competitiveness.

The second, major challenge of the Green Deal is, therefore, to ensure an industrial transition according to the objectives of the Green Deal that doesn’t compromise global competitiveness. Facing a tough economic outlook in the aftermath of the global COVID19 crisis, this objective is only gaining in significance. At WACKER, we consider a European electricity price to be a complementary building block for bridging the decarbonization and competitiveness gap for European industry in the long-term, as well as part of an effective economic recovery response in the short-term. This is what we would call a “constructive green deal”, helping the environment, growing the industry and securing jobs in Europe.

Question #2: Why did you choose the topic of your talk?

Christian Hartel: WACKER and its employees, being part of a family-owned company since over a century, have always worked hard at putting sustainability at the very heart of our business. In fact, as a significant global and Europe’s only supplier of hyperpure polysilicon, we provide our customers with the basic raw material that is enabling one of the cleanest and most cost-efficient energy sources of the future: photovoltaic energy. Providing fossil-free electricity for an integrated energy system will be one of the major tasks of our upcoming decade and our employees are working with lots of inspiration on developing new solutions, for example, in the field of silicon-based anode materials for the next-generation batteries.

Speaking not only as a supplier, but also as a big consumer of electricity, we believe that electrification of the chemical industry is one of the main levers to steer our sector towards climate neutrality by 2050. Due to technical necessities, WACKER has already electrified several processes in the production of solar polysilicon. Now, we want to leverage that technical know-how to other applicable areas and together with other parts of the value chain, make sure that we deliver on the objectives that we, as a society, have set for ourselves and our future.

But despite welcoming the objectives introduced by the Green Deal, the obligation for becoming climate neutral also introduces a dilemma of a new kind. While investing into innovative processes and new electrified plants will increase the capital and operational costs for European producers, on the one hand, international competitors on the commodity market will on the other hand not face the same constraints, as they operate under completely different industrial systems and climate targets.

If this transformation is to sustain in the long-term, we must recognize that – unlike when the ETS was introduced – the EU’s energy-intensive industry is today in a harsh systemic competition with China and other regions. This structural distortion of competition must be acknowledged and can only be resolved by introducing a smart mix of carbon leakage protection instruments that enable European innovations and carbon-neutral production processes to stay competitive towards global and fossil competitors. At WACKER, we believe that a European industrial electricity price is an indispensable tool in that policy toolbox.

Question #3: What motivates you to join CIEX 2020 and what are your expectations?

Christian Hartel: We at WACKER don’t have all the answers to our challenges and frankly, many of these challenges can only be tackled jointly. For example, understanding how we as the industry can help in securing and supplying affordable renewable electricity – which in the light of the climate neutrality target essentially is becoming a scarce resource – is a topic that needs to be discussed with everyone along the value chain, as it will shape all of our innovation and investment activities.

Of course, I am looking forward to receiving input from other participants and hearing on how they deal with challenges that are similar to ours. Last but not least I am open to bringing back home ideas for new technologies that we might be able to apply at WACKER.

Question #4: The need for innovation has been a continued topic for the chemical industry – how would you sum up the current state of the industry, specifically with a focus on its innovation efforts?

Christian Hartel: Sustainability is without a doubt the overriding topic for the whole chemical industry and can be approached from different angles. From the b2b-consumer perspective, it means tighter specifications and higher traceability for products, and better foresight with regards to regulatory compliance – achieving all of the above at a better cost position and offering better functionality.

From the manufacturing side, increasing sustainability will manifest itself in developing more efficient processes – so basically, making more from less. Feedstock needs to become more renewable and circular, meaning a higher degree of utilizing carbon dioxide, green hydrogen, natural raw materials without causing additional environmental damage. To give an example, nowadays we at WACKER source two of our biggest raw materials, acetic acid and methanol, also from plant-based sources.

Obviously, this can be a challenge when scaling-up production, since regional hubs often need to provide global supply chains. This whole menu amounts to squaring the circle – and here, setting the right priorities at the very start is key. What is important to me is that the developed innovations have the potential to be commercialized. Again, this can only happen with effective support measures by the government to prevent carbon leakage.

Question #5: What must (chemical) industry leaders do to remain competitive and prepare for the future?

Christian Hartel: The chemical industry is often referred to as “the industry of industries”, as it presents the very backbone of all other industrial value chains. Applying a strategy that fails to acknowledge this basic structure and that in the worst-case makes chemical production uneconomical in Europe will be counterproductive not just for the objective of reducing CO2 emissions, but also for re-building a sustainable industrial ecosystem in Europe.

I think that the first thing we must do as industrial leaders is to signal our willingness to lead by exemplary change and action. This will undoubtedly take lots of effort and through various means. In the end, only by rebuilding trust and confidence towards society, can we jointly define our path towards carbon neutrality.

At the same time, I believe that by showing commitment towards sustainability, we are fueling the motivation of our own employees, attracting new talents from around the world and thereby equipping ourselves with the best minds possible to help us become more competitive in a sustainable manner.

Question #6: Looking back on the past 3 months please share your thoughts on the impact of COVID-19 on the industry but also society in general

Christian Hartel: Speaking from a company’s point of view, facing an economic recession caused by such a drop in demand and production is not a pretty thing. It naturally causes some concern and worry about the future. Our colleagues at WACKER have reacted in the most professional manner, with a priority on health, safety, and serving our customers among all the on-going pressures. By doing that, we’ve managed to ensure the viability of the company. Now, we want to make sure that we are positioned in the right way to provide solutions that society demands as the situation continues to evolve.

From a more general perspective, COVID-19 has highlighted the vulnerabilities of our current economic system. In today’s interconnected world, nobody is invincible. With that realization comes a certain degree of humility that can hopefully be transformed into better insight on how to restructure our economy according to the priorities and principles of the Green Deal and the Sustainable Development Goals.

The current situation gives us a unique opportunity to rethink where we are and where we want to go. Indeed, the transition to a climate-neutral economy, to a circular economy and the protection of biodiversity all have the potential to rapidly deliver jobs, growth and improve the way of life of all citizens worldwide, and to contribute to building more resilient societies.

It’s not a matter of creating a new economy from scratch. We already have all the tools and many promising technologies. Over the last 10 years, tremendous progress has been made in most transition sectors, developing new technologies and value chains, and dramatically reducing the cost of the transition: 10 years ago, wind energy was three times more expensive than it is today, and solar energy seven times.

Political will is here. We already have the plans and strategy. Projects such as the European Green Deal and other national zero carbon development plans have a huge potential to build back our economy and contribute to creating a new AND SUSTAINABLE prosperity model.

It’s time to prepare Europe for the future and design recovery plans, both at the local, national and at the EU level, enshrining the fight against climate change as the core of the economic strategy. Massive recovery investments must trigger a new European economic model: An economy that is more resilient, more sustainable, more sovereign and more inclusive. The social impact of the Covid-19 epidemic is already tremendous and resistance to further investments in the transition to a climate-neutral economy is not the way forward.

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Overcoming Sustainability Challenges By Establishing Cross-Industry Collaboration

In the run-up to the CIEX 2020 conference, we had an opportunity to catch up with Pierre Joris, President at A.SPIRE who will reveal A. SPIRE’s perspective on achieving sustainability by cross-industry collaboration. We had a few questions for him related to his session, to warm up a bit for the event.

Question #1: Without giving too much away –what is the core message of your talk and what would you like delegates to remember? 

Pierre: The sustainability challenges that the Chemical Industry is and will be facing in Europe are enormous. The climate neutrality and circularity ambitions that are being discussed at European levels are very inspiring but will mean for our industry, not only huge transformation investments but well before that, the development and scaling-up of very disruptive innovations that will make that transition feasible.

This can be achieved only by combining forces and resources to address these formidable challenges and by moving forward together in a collaborative manner. This applies certainly for collaboration within our industry but is also needed across other process industries, such as Steel, Cement, and many others. First of all, because these industries do face similar challenges and will most often rely on the same fundamental technology solutions to manage that transition. But also because cross-industry collaboration is the only effective way to bring into the picture the precious industry symbiosis solutions that will be needed to succeed. Such a need for cross-industry collaboration is the core message of this talk.

Question #2: Why did you choose the topic of your talk?

Pierre: Because I want to convey a certain sense of urgency. Although the full climate neutrality and circularity transition that is ambitioned is still decades away, time is really of essence as investment cycles in our industry are pretty long. These long investment cycles will, therefore, require that most of the disruptive technologies needed can reach TRL9 level within a decade or so. This is really tomorrow when you look at the innovations that are being considered. The cross Industry collaboration that I, as president of A.SPIRE, am advocating in this talk, needs to happen now.

Question #3: What motivates you to join CIEX 2020 and what are your expectations?

Pierre: CIEX brings together a high number of industry leaders and experts in the field of Innovation. This is, therefore, a great platform to bring this message and convince them to move forward, but also to get constructive interaction on this topic. I think also that the spirit of this event is to foster collaboration as an essential element to innovation, hence a perfect alignment on the main message I wish to bring.

Question #4: The need for innovation has been a continued topic for the chemical industry –how would you sum up the current state of the industry, specifically with a focus on its innovation efforts?

I am not in the best position to reply to this question and you can certainly have a better perspective on this topic by looking for example at the Suschem R&I agenda.

Besides, I think that it is very difficult to sum-up the current state of the chemical industry from an innovation perspective in a single conclusion, as there is such a variety of realities in the chemical industry. You can go from small focused companies to large diversified companies, from pure commodities, very mature products and processes, where survival goes through cost and productivity performance, to sophisticated and differentiated specialities where product innovation for new needs will be the keyword.

All in all, and on a very personal note, I think that the Chemical Industry has always been and will remain a very vibrant industry from an innovation perspective, providing most of the new solutions that our society will need to address the major societal challenges, whether in terms of clean energy, clean mobility, growing and ageing population, need for high-performance data treatment and sensors, etc….

I regret though that our industry has been so slow in embracing itself modern digitalization trends, such as AI, or block-chains, in its own processes, from production processes, to innovation process through the way it does business with its partners. I am convinced that these tools and best practices can really help our industry be faster and more effective, in particular in innovating and in developing the new solutions that our downstream users need.

And this is particularly true for the development of the new solutions that our industry will need to transition to climate neutrality and circularity. Discovery of new catalysts for CO2/CO reaction can be accelerated through AI, traceability of materials in a circular economy can be helped by block-chains, competitiveness of new climate-neutral processes can be improved through deep process digitalization etc.

Question #5: What must (chemical) industry leaders do to remain competitive and prepare for the future?

Pierre: With no surprise to you, I will certainly put innovation as one of the priority that any European chemical leader needs to have in mind to keep its company competitive. Commoditization is faster and faster in our industry and Europe is well known not to have any specific cost competitive advantage. Differentiating our product offerings, improving process efficiencies, developing the best solution for our downstream value chains needs, or offering the best business models are all therefore key to remain in the lead and this goes through innovation.

But within such innovation space, I genuinely think that tackling the robust and innovative sustainability solutions that will enable our companies to address the key societal challenges of either climate change, resource scarcity or waste management will be critical for preparing for the future. First, because our industry will simply need those solutions if it desires to keep its “License to Operate”. Second, because it will be (and is already) a must to keep attracting the best minds in our companies, and hence ensure a bright future. And last but not least, because this will put our companies in the leading seat for competing globally in the climate-neutral and circular society that our word will need in the future.

Question #6: Looking back on the past 3 months please share your thoughts on the impact of COVID-19 on the industry but also society in general

Pierre: COVID-19, or rather the fighting strategy that our respective governments decided to adopt in front of COVID-19, have had for sure a very damaging short impact on our companies, and this of course to various extent, depending on the market segments served.

From a management standpoint, this will certainly bring the industry leaders to re-think the robustness of their supply chains, the resilience of their organization and business models in case of tremendous shocks of this magnitude, and the flexibility of their working models. This will also probably lead some companies, especially the larger ones, to a complete reconsideration of their activity portfolio to rebalance towards more resilient and less shock-sensitive activities.

On a more personal level, I think that this crisis, will for sure have changed the way of living of a lot of people, in terms of mobility, priority in their life, and sense of civic responsibility and support they could bring to their neighbours. Future will tell us how these inspiring changes will last.

But this brutal shock could and should also be an opportunity for our political leaders to drive the reconstruction of their economies, including our industry, towards a better, more sustainable society. While the different governments are ponding at the best way to support the re-start of their economies, the huge financial support and resources needed should definitely be oriented towards those initiatives and companies that will show a clear commitment to contribute to such a better and more sustainable society.

You can see Pierre’s full presentation during the CIEX 2020 this October in Frankfurt. Join him and many other experts from the industry here

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Enabling the circular economy through collaborative partnerships

CIEX 2020 Pre-Conference Interview with Hanno Bruemmer, SVP Polyurethane Global Production & Technology at Covestro

In the run-up to the CIEX 2020 conference, we caught up with Hanno Bruemmer, Senior Vice President Polyurethane Global Production & Technology at COVESTRO who will reveal his secrets of driving efficiency and innovation in the chemical industry on October 8th in Frankfurt. We had a few questions for him related to his session, to warm up a bit for the event.

#1: Without giving too much away what is the core message of your talk and what would you like delegates to remember?

Hanno: We need to move away from linear consumption and production patterns and on to a circular economy. However, we can only successfully drive circular economy concepts and their practical implementation forward through close collaboration between different players across the entire value chain. By setting up the right kind of networks, i.e. for sharing information and data, etc., we can enable collaborative partnerships and unlock the value with which to transform our industry.

#2: Why did you choose the topic of your talk?

Hanno: At Covestro we want to establish circularity in all parts of the company and our business. To this end, it will be crucial to follow a broadly based approach. Partnerships are one of four core pillars of Covestro’s circular economy strategy building on a history of successful collaborations with third parties to deliver innovations.

#3: What motivates you to attend CIEX 2020, and what are your expectations?

Hanno: I am very much looking forward to all the conversations, the opportunities to share experience, and the lively discussions with other experts from our industry. This conference has a great reputation as a good platform for in-depth discussions and exchanges with a lot of high-quality talks and content.

#4: The need for innovation has been an ongoing topic for the chemical industry. How would you sum up the current state of the industry, specifically with regard to its innovation efforts?

Hanno: The chemical industry is at an important turning point. Even though sustainability has been a major focus for numerous companies over many years and a lot has certainly been achieved, the need for transformation is increasing all the time and the tempo of transformation will further accelerate. Given this context, we need to take a broader stance and look at forming alliances to drive collaboration, while also taking advantage of new digital opportunities. Innovations in chemicals, and the business in general, will be key capabilities in solving the global challenges regarding climate change, pollution and other aspects.

#5: What must chemical industry leaders do to remain competitive and get fit for the future?

Hanno: First, we need to innovate and collaborate, while at the same time learning from players outside our industry. Second, we need to promote exchanges and collaborations with start-ups, universities and other industry sectors. Third, we need to keep talent development high on our agenda.

#6: Looking back on the past three months, please share your thoughts on the impact of COVID-19 on the industry as well as on society in general

Hanno: The pandemic has obviously had a major impact on our end-user industries and the chemical industry in general. However, in these highly challenging times, it is interesting to see how COVID19 has also unleashed a lot of creative potential. Our ways of working are changing fast. For white-collar workers, working from home has become the norm, no longer something exotic. And we are taking greater advantage of existing digital tools. I believe these things are here to stay. When things get back to “normal”, it will not be the world we knew, but rather a new normal.

Hanno, thank you very much for your time. We look forward to hearing more during your session at CIEX 2020!

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VP Technology Strategy & Deployment

In the run of our pre-conference interviews, we recently spoke to Dr. Peter Nieuwenhuizen from ENERKEM who will be participating at our upcoming CIEX Europe 2019 conference will go LIVE on Oct 09-10 in Frankfurt.

Question #1: Without giving too much away – what is the core message of your two contributions and what would you like delegates to remember?

 My main message is that we are at the intersection of the petrochemistry technology wave, which is late-stage and starting to fade, and the circular chemistry technology wave, which is early-stage and starting to take off.  These intersects don’t happen very often, and the innovation involved needs to be managed differently than we did in the past 25 years. We have to come up with these management approaches.

Question #2: Why did you choose the topic of your two contributions ?

As CTO at AkzoNobel Specialty Chemicals, I’ve implemented a number of programs to increase the company’s ability to source new technologies and to successfully work with startups. Now I’ve stepped to the other side.  In my new role as VP Technology Strategy & Deployment at Enerkem I represent a successful scale-up firm with circular technology that seeks to team up with larger firms to accelerate growth and roll-out. I think I have a few things to share about collaboration in this space.

Question #3: What motivates you to join CIEX 2019 and what are your expectations?

As you’ll appreciate from the above, the topic “Game-changing innovation through Collaboration” is rather pertinent when corporates and start-ups need to collaborate to make the transition to a circular chemical industry.  So I expect to have lots of inspiring conversations!

Question #4: The need for innovation has been a continued topic for the chemical industry – how would you sum up the current state of the industry, specifically with a focus on its innovation efforts?

Our industry operates, by and large, in the late, incremental stage of the technology wave of petrochemistry. The industry is very good, very effective, very efficient at doing the incremental type innovations in this stage; It has been doing this for almost 25 years. However, if the industry wants to successfully step up to the technology wave of circular chemistry, which is in its early, leaps-and-bounds stage, it will have to acquire new skills, and partner with the startups that are pioneering this new way of producing and selling chemistry. 

Question #5: What must (chemical) industry leaders do to prepare to remain competitive and prepare for the future?

Two things. First, we should not not defend fossil raw materials as the only viable feedstock we can use. The chemical industry exists not for its raw material but to make functional products that improve lives and wellbeing. We’ve made those products from biomass early on, then from coal, today from oil and gas. If we should now make these products from circular feedstocks like waste and biomass, we can do so. And we should say we can do so. Second, the industry should re-acquire the innovation skills it had 50 years ago: leaps-and-bounds, take some risk, develop new business models. To do so it should partner with startups, the pioneers that are right now developing the technologies of the circular chemistry technology wave which will enable the circular economy transition that is so much talked about.

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CIEX 2019: Pre-Conference Interview with Clariant’s CTO

In the run-up to the CIEX 2019 conference, we caught up with Dr. Martin Vollmer, CTO at Clariant who will be revealing his secrets of driving efficiency and innovation in the chemical industry on October 9 in Frankfurt. We had a few questions for him related to his session, to warm up a bit for the event.

Without giving too much away – what is the core message of your talk and what would you like delegates to remember?

Martin Vollmer: Nowadays, chemical companies are facing an increasingly challenging environment. Markets require more holistic solutions instead of focus being solely on the development of new molecules or products. Climate change, resource scarcity, technological advances, and rising customer expectations are forcing chemical companies to adjust to new realities, with the result that many are restructuring, increasing customer focus – and perhaps most importantly, creating distinctive capabilities that will provide a competitive advantage. Encouraged by the so called digital-based Fourth Industrial Revolution, this change is taking place at unprecedented speed. Chemical companies must be prepared for this change and embrace it as a chance for growth. Thinking outside of the box, openness to new ways of collaboration and keeping pace by increasing efficiency in the innovation process are essential prerequisites to master the challenges and to remain innovative at the same time.

Why did you choose the topic of your talk?

Martin Vollmer: The new requirements discussed above necessitate more holistic approaches. The traditional, incremental approaches to change no longer enable the industry to achieve time-related and technical goals due to increasing regulation, political targets, public opinion and the pace of technological development. The chemical industry has been and still is undoubtedly a very versatile enabler for tackling future challenges across a multitude of industry sectors, but we cannot simply lean back and rely on the fact that everything went well in the past and will – undoubtedly- in the future. This talk will show our perspective on the topic and first initiatives established at Clariant.

What motivates you to join CIEX 2019 and what are your expectations?

Martin Vollmer: CIEX brings together a high number of industry leaders and experts from various fields and is thus a great platform for networking along and across the value chain. The event fosters collaboration as an essential element to innovation. The huge variety of topics and themes sets new impulses and stimulates thinking outside of the box. I expect an inspiring agenda on latest trends combined with in-depth discussions with known, but also a quite high number of new contacts.

The need for innovation has been a continued topic for the chemical industry – how would you sum up the current state of the industry, specifically with a focus on its innovation efforts?

Martin Vollmer: Historically, chemical companies have been slow in adapting and implementing the latest technologies, they preferred to focus on incremental innovation and core operational improvements such as operational efficiency and productivity, rather than disruptive approaches. Now, fostered by digitalization, many chemical companies are starting to develop highly innovative holistic solutions, witnessing a new dawn of collaboration and integration across silos of all manner of internal departments and external partners. The global chemical industry has reached a crossroad and faces a transformational change. We now need to maximize the synergies that chemistry has within any productive ecosystem, in conjunction with other relevant and productive disciplines. Beyond product and process innovation, this includes service and business model innovation, with digitalization driving those developments and tremendously speeding up the process.

What must (chemical) industry leaders do to remain competitive and prepare for the future?

Martin Vollmer: Chemical companies must foster flexibility to complement internal capabilities with external ones. Chemical Boards and top management teams need to overcome concerns about intellectual property and data ownership to leverage the full potential of collaboration in new ecosystems. At the same time, industry leaders need to challenge their organizational set-up to attract the right talents for the speedy and digital chemical future ahead. Failing to recognise the need to hire cutting edge, technology-relevant talent and benignly ignoring to promote the skills of an existing workforce are the most common pitfalls in unsuccessful transformations. Organizational agility and fluidity in team working e.g. through virtual teams and the ability to innovate in a rapid, iterative, “fail-fast”, test-and-learn approach is seen as the way forward, rather than the old test-to-destruction method, with cascading layers of approvals.

Mr Vollmer, thank you very much for your time. We look forward to hearing more at CIEX 2019!

Join Chemical Innovation Experts at CIEX 2019 on October 9-10 in Frankfurt

Hear more about innovation, digitalisation and sustainability strategies of the world’s leading chemical production companies at CIEX Europe 2019. Register today to meet and listen to speakers from BASF, Dow Chemical, DSM, Henkel, Clariant, Mitsubishi Chemical, Ashland, Covestro, Braskem, Sabic and many more.  Register at ciex-eu.org.

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State of the Industry: Reinvent your innovation processes!

Innovation will be a key driver for success in the chemical industry, but only if the concept of innovation itself is reinvented.

In the run-up to CIEX 2019 we asked our speakers to share their thoughts on the industry’s innovation efforts and what must be done to successfully prepare for the future.

Braskem’s European CEO, Walmir Soller notes that the chemical industry is on the very beginning of a disruptive innovation curve and identifies a lot of space to grow. In his opinion, the industry grew over the years based on technological breakthroughs that brought to life exciting products followed by their incremental innovation. This has been enough for a long and profitable economic cycles. But now the industry needs to do more to cope with the pace of the market dynamics.

According to Soller, the future demands different approaches, not only based on the circularity of the products but also on the creativity of business models, to keep the industry sustainable and profitable.

“The pace of innovation is increasing exponentially, in different directions and forms. Companies need to look for ways to revisit their products and business models constantly to thrive in this new reality.” Wladimir Soller, European CEO, Braskem.

“Innovation is the combination of invention, technology deployment and business development”, says Steven de Boer, Sustainability Leader at the petrochemicals manufacturer SABIC. “I note that there are so many good ideas around, but the profit margins in the business are thin and the project risks are considerable. So unfortunately many good ideas do not make it. Therefore I strongly believe that we have to improve our implementation performance to realize more market deployment.”

De Boer feels that timeframes need to shift in order to prepare future investments successfully. The chemical industry was built by entrepreneurs who were thinking in 20-year timeframes, but currently 3-year timeframes are already seen as long. These short timelines do not allow the fundamental restructuring that is needed for the circular economy transition. 

Professor Dr Klaus Kümmerer, Professor of Sustainable Chemistry and Resources at ISC3 (International Sustainable Chemistry Collaborative Centre) agrees with de Boer and adds that the Industry still innovates too much in terms of new products, materials and chemicals. Most innovations are only incremental ones in a short term view. True powerful innovations are based on a broader view and societal needs beyond chemicals, materials and products only. 

“True powerful innovations are based on a broader view and societal needs beyond chemicals, materials and products only.”

To prepare for the future, Kümmerer feels that chemical manufacturers must avoid “sustainability washing” and learn that new business models are needed being less based on chemicals and materials. Furthermore it should be acknowledge that there are significant and insurmountable limitations of digitalisation and recycling. Both need energy and a specific material basis.  On a cautious note , Kämmerer adds that digitalisation and recycling doe not necessarily make chemical industries greener or even more sustainable.  

Kümmerer emphasizes that it has to be acknowledged that sustainable chemistry and green chemistry are not synonyms!  Sustainable chemistry is the broad approach that is needed. Greener is not necessarily more sustainable. However, if done well green chemistry can successfully contribute to sustainable chemistry.

So what must (chemical) industry leaders do to prepare to remain competitive and prepare for the future? 

Akihisa Kakimoto, CTO for Mitsubishi Chemicals takes a more philosophical approach and emphasizes that “courage and the flexibility to change” is needed.

Rainer Otter, VP for Regulatory Affairs at BASF feels that the need to listen to customers is paramount, in combination with the right human resource management: “Find the right people and provide them with a creative environment. Let them do their job and give them the support they need. Finally, a multidisciplinary team is needed with competencies that cover all the relevant aspects from basic research to market.”

 

Hear more from visionary industry leaders and innovation experts at CIEX 2019 on October 9&10 in Frankfurt/Main. Sign-up today and reserve one of the limited seats. Full details are available at https://ciex-eu.org.  

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Smart manufacturing – Leveraging on data-driven innovation

At the upcoming CIEX Europe 2019 conference on 9th – 10th October in Frankfurt, Germany, Jane Arnold, Executive Vice President and Head of Global Process Control Technology at Covestro will discuss data-driven innovation in her presentation “Smart manufacturing – Leveraging on data-driven innovation”. We have spoken to Jane about her topic of choice and her motivation for joining CIEX 2019.

Without giving too much away – what is the core message of your talk and what would you like delegates to remember?

Jane Arnold: Digitalization is a hot topic in the industry these days. Historically, we have been digital since the first transmitter sent the first signal to the first digital recorder. Over the years we have amassed an incomprehensible amount of data. All of that data tells a story. When you view it with the right lens, then you can leverage the power behind it to make monumental improvements. At Covestro we are strongly focused on how to utilize the data in order to make improvements across the entire value chain from R&D and Project engineering through production to our commercial operations.

Why did you choose the topic of your talk?

Jane Arnold: My first priority for many years has been to optimize production and to make work as easy as possible for the field level workforce – those with their hands closest to production. Full automation means less unplanned outages and less operator exposure to abnormal situations. I am very passionate about the opportunities that go along with the technical advancements over the past few years and want to leverage them to continuously improve operations at Covestro. In turn, the advances that we make also improve energy efficiency, reduce rework, and improve throughput for long-term sustainable advances.

What motivates you to join CIEX 2019 and what are your expectations?

Jane Arnold: CIEX offers a unique opportunity to collaborate and exchange ideas with other leaders in the industry and also offers a platform for connecting with innovative start-ups that are relevant in the industry. I look forward to hearing the advances in the other companies and see what Covestro can learn from their experiences.

The need for innovation has been a continued topic for the chemical industry – how would you sum up the current state of the industry, specifically with a focus on its innovation efforts?

Jane Arnold: When I started this position 2 years ago, I spent a lot of time learning where other companies stood in the area of Smart Manufacturing. I think that Covestro, as well as the other companies represented here are ahead of the curve. Innovation in this industry is very important because the global demand for high-quality chemicals and production levels are ever-growing, while chemical companies strive to significantly reduce or even eliminate their carbon footprint. In our case, the UN Sustainable Development Goals are a part of our company policy and a real driver for innovation.

What must (chemical) industry leaders do to prepare to remain competitive and prepare for the future?

Jane Arnold: Leaders of the chemical industry must embrace new technologies and utilize them to their fullest potential in order to remain competitive. In many cases, this needs to go hand-in-hand with a cultural change and establishing new ways of thinking and working in their organization. This is no small feat, but personally I feel energized by this challenge. I couldn’t imagine more exciting times to work in process control technologies than today.

Hear more about innovation, digitalisation and sustainability strategies of the world’s leading chemical producers at CIEX Europe 2019. Register today to meet and listen to speakers from BASF, Dow Chemical, DSM, Henkel, Clariant, Mitsubishi Chemical, Ashland, Covestro, Braskem, Sabic and many more.  Register at ciex-eu.org.

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Digitalisation in the chemical industry – Separating myths from opportunities

Digitalisation in the chemical industry – Separating myths from opportunities

There is a lot of excitement about digitalisation across businesses all major industries – and the same applies to the chemical industry.  Many believe that digitalisation will have a significant impact across the chemical value chain, with the potential to not only lead to higher productivity and more innovation, but also change supply chains, and create new channels to market. Given all the excitement about digitalisation, it is essential to separate the substance from the hype and carefully evaluate what this will truly mean for the industry.

At the upcoming CIEX Europe 2019 conference on 9th – 10th October in Frankfurt, Germany, Dr. Wilhelm Otten, Head of Process Technology & Engineering at Evonik will critically review digitalisation in his presentation “The innovative power of digitalisation in the process industry – Distinguishing myths from value adding opportunities”.  Dr. Otten will discuss on how digitalisation is currently very much driven by “new technology”, but often is missing a solid business case. In his view, digitalisation, in a nutshell, is the “automation of business processes”. It has to contribute to transparency, efficiency, speed and flexibility of the main business processes such as supply chain and asset life cycle management.

Dr. Otten chose to discuss digitalisation because he believes that besides sustainability, it is a major driver and enabler in the chemical industry. Evonik is in fact driving industry-wide standardisation activities to harvest the benefits of digitalisation faster and more efficiently. He is hoping to motivate other participants to join these initiatives. Besides this, Dr Otteb is looking forward to receive some new insights into the digitalisation strategy of peers across the industry.

Talking about key trends in innovation, Dr. Otten adds that, “From my point of view there are three key factors that drive innovation in the industry:

First, there is of course digitalisation. This will affect the development process for new products, disruptively change the customer interface based on data driven business models and foster transparency, speed, efficiency and flexibility in the main business processes, supply chain and asset life cycle. Most of the chemical companies are still struggling with the complexity and do not have a comprehensive strategy to deal with those developments. Only a few companies have really taken actions to develop and implement these elements in operational business.

The second factor is “modularisation”, mainly influencing chemical supply chains and production processes. Today, smaller quantities of chemical products are often produced in ( inefficient) multi-purpose batch plants. High volume products are in most cases produced in continuously operating plants, individually designed to produce one single product. Industry 4.0, with more individualised products, will require a higher variety of products produced in highly flexible and efficient modular plants. Modularisation will speed up time to market and make continuous processes adaptive to product changes. Modularisation will completely change process development and engineering process as well as production technology.

The third factor is “sustainability”. Examples here include establishing a sustainable chemical production based on bio-based raw product, recovering CO2, or the generation of Hydrogen by renewable energy to produce raw products like Methanol. Also, in this field only a first set of initiatives and pilots have been launched.

Mr. Otten concluded the interview by summarising, “… from my point of view there are three key drivers for innovation in the chemical Industry, “digitalisation”,” modularisation” and “sustainability”. Industry leaders must develop a comprehensive (innovation) strategy to cope with these developments and gain competitive advantages for their companies. The innovation in these fields cannot be managed without collaboration with industry partners from other industries, for example IT. Therefore, chemical companies have to learn to work with “open innovation”.

Hear more about innovation, digitalisation and sustainability strategies oft the world’s leading chemical producers at CIEX Europe 2019. Register today to meet and listen to speakers from BASF, Dow Chemical, DSM, Henkel, Clariant, Mitsubishi Chemical, Ashland, Covestro, Braskem, Sabic and many more.  Register at ciex-eu.org.

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Challenges for the chemical industry after the REACH May deadline

The European Chemicals Agency (ECHA) expected approximately 25 000 unique substance covered by 60 000 registrations to be submitted by the last REACH registration deadline at the end of May this year. However, this estimate was not reached as only half of the expected number of registrations were received by the deadline. This has raised the question of what happened to the substances that were not registered by the deadline and what can be done to mitigate this acute absence of substances on the EU market?
The reason for not REACH registering by the last deadline of 31st of May 2018 can be any number of things, ranging from business decisions to registration non-compliance issues to mere ignorance related to the duty to REACH register substances on the EU market. The overwhelming reason seems to be business decision related, where the cost of compliance is simply too high and thus the substance is withdrawn from the market once it cannot rely on the pre-registration anymore, this being from 1st of June 2018. Whatever the reason, if your substance is not registered, it cannot be place on the EU market at 1 t/a or above.
This acute absence of certain substances in the supply chain has scrambled some organisations to secure their supply of critical substances by e.g. importing these from outside the EU and thus giving them the opportunity to register the substance themselves. This in turn has in some cases been met by difficulties when there simply is no lead registrant for the substance and thus registering would mean taking up the lead registration role and incurring all costs on one self, at least until someone else wants to register the same substance. Furthermore, lead registering substances takes time and thus there is a delay in the go-to-market of new substances. In some unfortunate cases, where the lead registrant did submit the lead registration but did so under a Directors Contact Group procedure (DCG issue 10.3 ) where ECHA allows under certain circumstances for the submission of an incomplete dossier but provides a deadline for submission of the complete information later e.g. spring of 2019, the new registrants wanting to join this registration, not having submitted a registration by the deadline, are unable to joint the registration until the lead registrant has complemented the initial submission by the set deadline by ECHA. This situation currently means that the new registrant cannot register the substance until e.g. the spring of 2019 and thus cannot make business out of it until the lead registrant has complemented their registration and done so successfully. This is a severe hinderance to business on the EU market and surely not the intention of the REACH regulation and new solutions from ECHA may be coming soon to address this issue.

To conclude, the following is a list of some options organisations have for not-REACH-registered substances they are manufacturing or importing at 1 t/a or more:

    • 1. Lower the annual volume to less than 1 tonne per year

 

    • 2. Cease business activities regarding the substance

 

    • 3. If the substance is in stock within the EU (at any volumes), it can be used even though the stock is not registered, as it was presumably either manufactured in or imported into the EU/EEA before the last REACH registration deadline under a pre-registration number.

 

    • 4. Stop manufacture/import of the substance immediately and for substances where a Joint Submission is available, contact the Lead Registrant/Consortium for access to the joint submission. For a substance that does not have a Joint Submission available, you need to become the Lead Registrant. As part of the registration work, submit an inquiry to ECHA with information on the substance identify and await acceptance before going forward with submitting the registration dossier for the substance. It is still allowed to use a pre-registration number instead of the inquiry if one is available for the substance. Only once the registration dossier has been accepted and ECHA has issued a registration number, can the manufacture/import of the substance continue.

 

    5. In some special cases, a so-called PPORD (product and process orientated research and development) notification may be possible avoiding the acute need to register a substance.

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