Winning in a Circular Economy - Chemical Convention · Reaction to evolving consumer sentiment and...
Transcript of Winning in a Circular Economy - Chemical Convention · Reaction to evolving consumer sentiment and...
Practical steps for the chemical industry
Winning in a Circular Economy
Helsinki, 24th October 2019
In 2016 we described a concept for taking the European chemical industry into the circular economy
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€65 Bn value for chemicals industry by enabling circularity in downstream industries
5 principal loops to circulate molecules
Potential to circulate 60%+ of molecules …provided cost competitive low-carbon energy
Bio-based raw materials as a mitigator, but not a full solution
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Source: Accenture Research; Blackrock/ Global Sustainable Investment Alliance (2018); angel.co
In 2019, the chemical industry is partly pivoting, partly “taken“ into the circular economy
81% of end consumers prefer environmentally friendly products
49% perceive the chemical industry to be least concerned about their environmental impact
Alliance to End Plastic Waste founded;
committed $1.5 Bn investment
70+ brand-owners pledged 100% of plastic packaging to be reusable/recyclable/compostable by 2025
Sustainable investments increased
from $23 Tn (2016) to $31 Tn (2018)
EU increases the recycling rate for municipal
waste to 65% and packaging to 75% by 2030
Drivers and examples
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Source: AS ASG RES Research 1) Volume impacted on upstream producers due to substituted products
Brand owners are responding with a race of self-commitments Reaction to evolving consumer sentiment and regulation
Non-Exhaustive
Globally, commitments result in a volume impact of approx. 7M tons of polymers
For calibration: this corresponds to approx. 6.2% of chemicals consumption of EU28 (excl. inorganics)
1,500 kt
1,700 kt
1,000 kt
750 kt
600 kt
300 kt
300 kt
250kt
220 kt
100 kt
70 kt
25 kt
3.5 kt
2 kt
1 kt
Copyright © 2019 Accenture. All rights reserved. 51) Only applies to selected states of the US; Source: Accenture WEEE: Waste Electrical and Electronic Equipment; EPR: Extended producer responsibility
An increasing number of the 193 countries started to regulateTypes of CE-related regulation and examples
1
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Consumed chemicals to suitable EoL-materials: Europe, in 2018, in million tonnes
A major challenge are dispersed, non-separated and local secondary raw material streams
Permanent use = in use for longer than one year.
Source: Accenture model, GVR, AMR, PlasticsEurope, Accenture Research ICIS; Values rounded, EoL=end of life 1) Acrylic, Alkyd, Polyesters, etc.
Chemical
Industry
Consumer
Industry
End of
lifecycle
Waste
management
Recycled
today
Accessibility at
end of lifecycle
Paints & Coatings1)
Lubricants Carbon blackSolventsCatalysts Crop protection
Nitrogen fertilizer Phosphate fertilizer Potassium fertilizer Other inorganics
26.9
23.8
56.7
31.5
27.9
10.0
17.2
3.2
3.5
13.8
15.6
1.7
2.0
35.8
101.2
31.2
70.0
Chemical Recycling
8.9
12.9
5.8
3.4
<0.1
Glycolic acid
Silicone
Surfactants
Other
PP
LDPE & LLDPE
HDPE
PVC
PU
PET
PS & EPS
Other polymers
22.8
21.3
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Circularity, therefore, likely to start in densely populated areas to ensure stable feed into recycling assets
Source: Accenture with Eurostat data
Municipal waste in Europe (2017, in tons per km²)
New wave of innovations
Reuse of existing assets
Design for circularity
New recycling assets
End user demand
Brand ownercommitment
Dispersed, non-separated secondary raw material streams also shape business cases
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Selected average recycling cost structures and comparison to virgin alternatives
Industrial scale chemical recycling plant for pyrolysis oil from polyolefins
Crude oil price range
Small scale decentralized chemical recycling plant for polystyrene
Virgin feedstock price range
Price for unsaturated polyester
Industrial scale chemical recycling plant for PET glycolysis to unsaturated polyester
Profit
Depreciation
Process costs
Transport
Waste/ Precursor
Fossil feedstock price (range)
4030
40
43557
480
752
825
1,201
1,600
40
34153
335
98
120
316
8210
675
80
890
3163
Source: Accenture Research
in €/t
1000
152
137
Price ranges
What does this mean for individual companies?
There is a massive growth and innovation need – and potential
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180
170
130
120
140
160
150
Base scenario
Circular economy scenario
Base scenario consumption
Circular economy scenario consumption
140 million tons in 2018
165 million tons in 2018
140 million tons in 2018
180 million tons in 2018
Million tons
2018 2020 2022 2024 2026 2028 2030
Projection of consumption volume with and without CE 2018-2030
Note: Chemicals sold to customers – not counting basic chemicals and intermediates that are further processed within the chemical industry
Source: Accenture
However the circularity-induced growth potential strongly differs by applicationHeatmap of chemical demand shift driven by circular economy themes
CE Trends Chemicals
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Source: Accenture
7.8% 7.2% 6.9% 7.0% 7.0% 7.0% 7.0% 7.0% 8.2% 7.0% 8.4% 7.8% 6.5% 8.3% 7.3% 7.6% 7.4%6.6%7.1%7.5%
-1.4%
-0.9%
-3.4% --0.8%
-0.1% -0.1% -0.1% -0.1% -0.1%-0.01%-0.1%-0.3%
-0.6% -0.1% --0.1% -0.1%-0.6%
0.2%
0.8% 0.8% 0.9% 0.6%0.8% 0.7%
0.7% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8%
1.7%
1.1% 0.1% 0.6% 0.4% 0.2% 0.1% 0.1% 0.9% 0.9% 0.4%0.2%0.6%
1.3% 1.6% 1.2% 1.7%
1.2% 1.0% 1.0% 1.0% 1.1% 1.9% 1.0% 1.4% 0.1% 1.7% 1.5% 0.8% 1.7%1.2%
1.8% 1.8% 1.5% 1.6% 1.5%1.4%0.3%1.1%
1.7% 1.0% 1.1% 0.9% 1.1% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.9% 1.6% 1.6% 1.5% 1.3% 1.7% 1.1%1.6%0.6%1.2%1.4%
0.2% 0.1% 1.2% 0.4% 0.7% 0.7% 0.7%
1.2% 1.2% 0.8% 0.9% 1.2% 1.8% 1.8% 1.7% 1.5%1.3%
1.6% 1.2%1.9%1.2%
2.5%
2.1%
2.8% 2.5%
2.3%
2.8% 3.3% 3.4% 3.4% 3.4% 3.4% 2.5% 3.4% 2.1% 2.4% 2.4% 2.9% 2.9% 2.1%2.2%
2.5% 2.1%
2.6% 2.4%
2.3%2.5%2.0%
Agricultural appliances
Adverse … Beneficial Not applicable……Impact
Wa
x
Tit
an
ium
dio
xid
e
Su
rfa
cta
nts
Sty
ren
e B
uta
die
ne
Ru
bb
er
(SB
R)
Sp
ec
ialt
y S
ilic
a
Silic
on
e
Po
lyv
iny
l c
hlo
rid
e (
PV
C)
Po
lyu
reth
an
e (
PU
)
Po
lyte
tra
flu
oro
eth
yle
ne
(P
TF
E)
Po
lyst
yre
ne
(P
S)
Po
lyp
rop
yle
ne
(P
P)
Po
lym
eth
ylM
eth
ac
ryla
te
(PM
MA
)
Po
lye
thy
len
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ere
ph
tha
late
(P
ET
)
Po
lye
ste
rs p
ain
t &
co
ati
ng
s
Po
lyc
arb
on
ate
(P
C)
Po
lya
mid
e (
PA
) 6
& 6
6
Pig
me
nts
Oth
ers
pa
int
& c
oa
tin
gs
Oth
er
the
rmo
pla
stic
s
Oth
er
solv
en
t (a
lco
ho
ls,
gly
co
l eth
ers
, h
yd
rocar
bo
ns,
ch
lori
nat
ed
, ac
ids,
am
ines
& e
ther
est
ers
)
Oth
er
pla
stic
s
Lu
bri
ca
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Lo
w-d
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Po
lye
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len
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(LD
PE
) &
Lin
ea
r lo
w-d
en
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P
oly
eth
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(L
LD
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)
Ke
ton
e s
olv
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Hig
h-D
en
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Po
lye
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len
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(HD
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)
Gly
co
lic
ac
id
Fe
rtiliz
er
Ex
pa
nd
ed
Po
lyst
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(E
PS
)
Est
er
solv
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Ep
ox
y p
ain
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co
ati
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Dy
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Cro
p P
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cti
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Ch
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Ca
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Ca
rbo
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Alk
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pa
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& c
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Ac
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pa
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& c
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Ac
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bu
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(A
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); S
tyre
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-ac
rylo
nit
rile
re
sin
(S
AN
)
Agricultural consumables
Automotive
Building & Construction
Consumer products
Electrical & Electronics
Household, Leisure & Sport
Others
Packaging
Process chemicals
Technical applications
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The race is on to occupy “sweet spots” in future value chains
1
2
4
5
6
7
8
Race for value chain partnerships
Race for applications for secondary materials
Race for consumers preferring eco-friendly offerings
Race for reverse logistics partnerships
Race for bio-based chemical value chains
Race for innovations and circular solutions
Race for technologies (waste separation / chemical processes)
Race for homogeneous raw materials
3Basic chemicals
Inter-mediates
Polymers / Specialties
Downstream value chain
End consumer
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Chemical companies pursue a set of entries into circularity
Source: Company websites, www.environmentalleader.com; Accenture analysis
JV for mechanical recycling
acquired mechanical recycler
Supply recycled PET
provides waste
provides waste
cellulose-based bioplastics for
green packaging
PE + PP
PE
PP
PS
PS
Mixed plastic to synthetic oil
Multilayer to LDPE
PET
PET
Carbon fiber
Bio plastic
PU
PS
PET recyclatesupply
acquired mechanical & chemical recycler
1Chemical company & waste manager
2Chemical company Start-up & waste manager
3
Start-up, chem co, packaging producer, brand owner & waste manager
4
Start-up, chem co, packaging producer, brand owner & waste manager
5Start-up, brand owner & waste manager
Collaboration modelRaw materials
Chemical industry
Converters OEMs/Brand owner End userWaste manager
endlessly recyclable polymer
for footwear
recycled carbon fiber for injection
molding
And there is a multitude of ventures and new entrants targeting individual niches
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Number of relevant start-ups by value chain and technology maturity
Refined hydrocarbons, petrochems, fuels, others
Growth
• Anhui Oursun EnviromentalTechnologies
• Blest• Klean Industries• Plastic Energy
Concept
Lab
• Illinois Sustainable Technology Center
Pilot
• Climax Global Energy• Jeplan• Polycycl• Reclaimed EcoEnergy• Resynergi
Early commercial
• EcoFuel Tecnologies• Enerkem• Enval• Fulcrum BioEnergy• GreenMantra Technologies• Golden Renewable Energy• New Hope Energy• Nexus Fuels
• Agilyx• Pyrowave• Recycling Technologies• ReNew ELP• Renewlogy• RES Polyflow• Sierra Energy • Vad
Monomers & intermediates
Polymers
• perPƐTual
• University of Massachusetts-Lowell• Karlsruha Institute of Technology
• TRASH2CASH
• Axens• Biocellection• Tyton BioSciences• University of Portsmouth & U.S.
Department of Energy’s National Renewable Energy Laboratory
• University of Ulsan
• Carbias• Gr3n
• Next Generation• Polystyvert• Resinate Materials Group• Worn Again Technologies
• Ioniqa• Loop Industries
• APK• Cadel
Deinking• CreaCycle• Ecopek• Equipolymers
• Aquafil• SABIC Innovative Plastics
Monomers & intermediates PolymersHydrocarbons Plastic products Post cons. waste
• Galactic• Geo-tech Polymers• Natureworks• PureCycle
Technologies
Source Closed Loop Partners – Accelerating circular supply chains for plastics:
Plastic products & packages
Post consumer waste
Conversion Decomposition Purification Mechanical
Practical Steps for Moving Forward
Treat it as a growth and new business model opportunity
Build capabilities to identify and build circularity options
Embed circular in daily operations and management (ways of working, target setting, roles)
Identify consumers & value chains planning to buy eco-friendly
Revise long term demand assumptions for linear models
(Re)gain ownership of the narrative
1.
2.
3.
4.
5.
6.
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