![\"\"](\"https:\/\/renewable-carbon.eu\/news\/media\/2023\/06\/image-45.jpeg\")
<\/figure><\/div>\n\n\n\nSustainability<\/h3>\n\n\n\n
The chemicals industry seems to be under increasing pressure to reduce emissions, increase recycled inputs to minimize waste, and develop inherently safer chemicals. Pressure may come from across stakeholder groups: local and federal governments, nongovernmental organizations, investors, industry groups, and downstream consumers. Numerous policies, regulations, and targets have been announced over the last few years, with many investors requiring companies to disclose environmental data.1<\/a><\/sup> In fact, brands are driving demand for more sustainable materials to meet their sustainability targets and prepare for the low-carbon, reduced-waste future that policies are pushing toward.2<\/a><\/sup> Today, more than 1,700 companies and financial institutions, globally, have announced net-zero commitments.3<\/a><\/sup> In addition, according to a Deloitte survey, 59% of respondents reported their companies have started using sustainable materials, such as recycled materials and lower-emitting products.4<\/a><\/sup><\/p>\n\n\n\n Over the last two years, several such policies and regulations have been adopted and proposed. The United States passed the Inflation Reduction Act,5<\/a><\/sup> which provides incentives and funding to clean energy production and infrastructure, and proposed climate disclosure rules,6<\/a><\/sup> which could require listed companies to disclose scope 1, scope 2, and some scope 3 emissions. In September 2022, President Joseph Biden signed an executive order creating a National Biotechnology and Biomanufacturing Initiative to advance American biotechnology and biomanufacturing.7<\/a><\/sup> The European Union also proposed the Fit for 55 package8<\/a><\/sup> and the European Green Deal,9<\/a><\/sup> which could promote several initiatives, including clean energy, energy efficiency, and longer-lasting products that can be repaired, recycled, and reused.<\/p>\n\n\n\n The chemical industry’s role in reducing emissions and waste will likely be important as the demand for chemicals and materials grows. For instance, global demand for plastics is expected to triple between 2019 and 2060 from 460 million tons (MT) to 1,231 MT, with increased use in the transportation, construction, and packaging sectors as economic growth drives demand in those sectors.10<\/a><\/sup>\u00a0It\u2019s important to note that more than 75% of the chemical industry\u2019s emissions are scope 3 (figure 1).11<\/a><\/sup>\u00a0This has led to an increased focus on decarbonized upstream inputs, low-carbon end uses, and downstream end-of-life options. And meeting targets will likely become increasingly important to brand value as stakeholders pressure brands to demonstrate progress in meeting corporate sustainability commitments. This pressure on brands could inevitably trickle through to original equipment manufacturers and parts and component manufacturers.<\/p>\n\n\n\n Consumer preferences may shift as new products are developed and existing products are improved to solve problems, fulfill needs, and enhance the way we live and work. Shifts could continue to occur due to demographic changes. For instance, one forecast indicates that demand for medical devices could rise by nearly 50% between 2021 and 2029 as the population ages and the prevalence of chronic disease increases.12<\/a><\/sup> Global demand for electric vehicles (EVs) is forecast to increase eightfold between 2020 and 2030 (from 3 million to 27.5 million),13<\/a><\/sup> as policy incentives, better performance, and preferences for sustainable products could drive demand in the sector. Shifts could also occur in response to growing public awareness of an issue. For instance, several regions, countries, and states have banned single-use plastics.14<\/a><\/sup> And in March 2022, the resolution to end plastic pollution passed the United Nations Environment Assembly, and a binding United Nations treaty could be signed as early as 2024.15<\/a><\/sup><\/p>\n\n\n\n Each one of these shifts in demand could reverberate through the products\u2019 supply chain. Some shifts may only impact one part or component, but other shifts could impact every part of the supply chain, from feedstocks to end use. This may be especially true when the shift is toward more sustainable goods. Consumers generally want the same (or better) performance and affordability in addition to sustainability. This raises the question of whether it\u2019s more economical for the producer to decarbonize their existing product or start producing a different product that may have slightly different performance metrics but a lower carbon footprint.<\/p>\n\n\n\n This reevaluation of chemical companies\u2019 portfolios is expected to be important as markets continue to evolve because demand for new advanced materials could increase (e.g., lithium-ion batteries for energy storage, graphene for wearable medical devices), while other chemicals and products become outdated (e.g., chlorofluorocarbons [CFCs] after public awareness of their harm to the ozone layer led governments to ban them, and film after the use of digital increased). The difference now is that shifts in demand toward sustainable products could impact all <\/em>products rather than just a few.<\/p>\n\n\n\n Additionally, while in the past, chemicals companies have generally focused mainly on the volume of product sales, as scope 3 emissions gain importance, chemicals companies may start considering how their products are used downstream. For instance, chemicals companies may choose to sell their products (e.g., plastics, resins) to electric vehicle manufacturers (rather than internal combustion engine vehicles manufacturers) to reduce their downstream scope 3 emissions.<\/p>\n\n\n\n The drivers of shifting demand and sustainability have contributed to today\u2019s innovation in advanced materials, but the current acceleration is likely due in large part to advancements in enabling technologies such as robotics, artificial intelligence (AI) (for more details, see the sidebar \u201cEnabling technologies: Artificial intelligence\u201d), 3D printing, and material informatics (both physics-based machine learning and de novo simulations and eventually quantum computing). Advanced materials research is extensive, incorporating multiple fields, including material science, chemistry, physics, nanotechnology, and biotechnology (for more details, see the sidebar \u201cEnabling technologies: Synthetic biology\u201d), and its development is being accelerated in part by technologies and policies that shorten the time to market. Additionally, initiatives like the Materials Genome Initiative aim to expand the range of advanced materials and accelerate time to market.16<\/a><\/sup><\/p>\n\n\n\n Materials like self-healing concrete and bioresorbable polymers that allow stitches to absorb into the body represent advancements in materials that can improve how we live and work. Scientists can design new, purpose-driven materials engineered to outperform naturally occurring materials. They can also manipulate and create cells, cell-like structures, DNA, and proteins in organic processes. <\/p>\n\n\n\n The applications of these materials are generally even more wide-ranging than the sciences behind them. Considerable improvements in the fields of medicine, electronics, automotive, construction, energy, and agriculture over the last few years have facilitated new applications of biomaterials, semiconductors, smart materials, nanomaterials, and advanced plastics and resins (figure 3).<\/p>\n\n\n\n The ability of companies to reexamine existing products and design new products in response to sustainability and consumer preferences may help determine their future success. Companies should evaluate the entire supply chains of each of their products, from feedstock to part to product. Key considerations to examine will include sustainability, cost structure, and performance characteristics at each stage.<\/p>\n\n\n\n The industry is exploring taking a circular ecosystem approach to reduce waste and emissions throughout the value chain. Companies can reduce scope 1 and scope 2 emissions through abatement solutions such as electrification, renewable energy usage, clean hydrogen usage, and efficiency improvements. Circular ecosystems can further help to abate upstream and downstream scope 3 emissions through solutions such as bio-based organic building blocks, CCU, advanced chemical recycling, and industrial bio-based operations.<\/p>\n\n\n\n For these circular ecosystems to be successful, a few elements are especially important. First, renewable or low-carbon energy should be used whenever possible. IEA estimates that renewable power generation will need to rise by 12% annually through 2030 to meet net-zero targets, which is twice the average of 2019\u20132021.48<\/a><\/sup> Second, feedstocks that can be reproduced more quickly (e.g., biomass) should be used when possible before more finite resources (like fossil fuels). The full life cycle of these feedstocks should also be taken into consideration. Third, hard-to-abate processes should use carbon capture, utilization, and storage (CCUS) to reduce emissions. Fourth, end-of-life options must be considered (e.g., recyclability, biodegradability, compostability).<\/p>\n\n\n\n But value could be created for companies along the supply chain if circular ecosystems are developed. Today\u2019s linear ecosystem results in most products losing economic value entirely at the end of the product\u2019s life as they end up in a landfill (figure 4). A circular system would preserve economic value as products are reused, refurbished, repaired, or recycled. Additional economic value could be created in several ways. For instance, producers could reach new customer segments with reused, refurbished, repaired, or recycled products, as well as through increased efficiencies, such as a company using its own waste as a low-cost feedstock. Lastly, companies could reduce regulatory, investment, and reputational risks by moving toward sustainable business practices.<\/p>\n\n\n\n To help fully realize this value creation, companies should track and report their sustainability efforts in a way that is wholly transparent. Life-cycle assessments can provide a more comprehensive understanding of the environmental impact of a particular product throughout its entire life cycle, from raw material extraction to disposal. Additionally, accurately and transparently reporting the results to investors and customers is important. Customers that view a company as transparent are 1.5 times more likely to pay more for a product even when a cheaper option is available.49<\/a><\/sup><\/p>\n\n\n\n Bio-based materials seem to be gaining traction as a potentially viable solution for developing more sustainable goods and potentially solving some specific aspects of waste by moving toward biodegradability and compostability as options. Bio-based materials are made from natural feedstocks or inputs extracted from plants or other organic sources, such as starch, cellulose, and proteins, and can further be processed through various biological and chemical reactions. These materials are then transformed into fibers, films, and resins via processes such as extrusion, casting, and molding. They can be classified into categories such as bioplastics, bio-composites, and bio-based chemicals, each with unique properties and applications.67<\/a><\/sup><\/p>\n\n\n\n Four generations of feedstocks are used for manufacturing bio-based materials:<\/p>\n\n\n\n First-generation feedstocks<\/strong> (e.g., corn, sugarcane, and soybeans): These are commonly used to produce biofuels and bioplastics. For instance, some companies make bio-based polymers from corn for use in textiles, carpets, and other applications.68<\/a><\/sup><\/p>\n\n\n\n Second-generation feedstocks<\/strong> (e.g., switchgrass, algae, and agricultural waste): A few bioplastics companies use agricultural waste such as potato peels and other food scraps to make compostable packaging.<\/p>\n\n\n\n Third-generation feedstocks<\/strong> (e.g., microorganisms like bacteria, yeast, and fungi): For instance, algae can be used to produce oils that can be used in food, cosmetics, and biofuels.69<\/a><\/sup> Another example is a biotech company, which uses bacteria to produce self-healing concrete that seals cracks, making special coatings or waterproof membranes unnecessary.70<\/a><\/sup><\/p>\n\n\n\n Fourth-generation feedstocks<\/strong> (e.g., synthetic biology-based feedstocks to design and engineer organisms that produce specific materials or chemicals): One genetic engineering company uses synthetic biology to engineer microbes to produce high-value chemicals such as fragrances, flavors, and medicines.71<\/a><\/sup><\/p>\n\n\n\n Consumer demand for bio-based materials is currently growing and is expected to continue to grow in the future as businesses move toward more sustainable materials. Global bioplastics only account for 1% of total plastics production, but production capacities could potentially increase from around 2.2 MT in 2022 to approximately 6.3 MT in 2027, a 23% CAGR.72<\/a><\/sup><\/p>\n\n\n\n But, as with other advanced materials, challenges exist.<\/p>\n\n\n\n Scalability:<\/strong> There can be additional complexity in scaling up the production of materials using bio-based feedstocks rather than traditional chemicals. To help ensure high performance and durability, scaling may need to be done in stages with particular attention to efficient processing and manufacturing and quality control. AI and other technologies could help to streamline the manufacturing of bio-based materials by detecting and removing intermediate, redundant, or wasteful procedures, such as finding the most promising feedstocks or optimizing processing conditions. This can lead to more efficient and cost-effective production processes that help minimize waste and lower the time and cost required to scale up production.<\/p>\n\n\n\n Redesign of products and processes:<\/strong> Nascent infrastructure in the bio-based materials market and supply chain can pose significant challenges for life-cycle analysis and sustainability efforts. For instance, drop-in bio-based materials, which are designed to replace existing materials without significant changes to the manufacturing process, may reduce emissions relative to traditional materials. However, the environmental benefits may be limited if the production of bio-based material relies on fossil fuels elsewhere in the supply chain. On the other hand, \u201csmart drop-in\u201d and carbon-neutral materials can offer significant environmental benefits but may require a redesign of the entire manufacturing process. This can involve significant investments in R&D, as well as changes to existing manufacturing infrastructure, which can be difficult to finance.<\/p>\n\n\n\n End-of-life issues:<\/strong>\u00a0Not all bio-based materials are biodegradable or compostable, and those that are, may require specific conditions to break down properly. For example, some bio-based plastics made from polylactic acid (PLA) require high temperatures and humidity levels to compost, which may not be available in all composting facilities. To address this challenge, some companies are developing bio-based plastics that are specifically designed to be compostable in a wide range of environments (e.g., home-compostable, industrial-compostable, marine biodegradable).73<\/a><\/sup><\/p>\n\n\n\n Circular solutions could reduce waste and emissions, while preserving more fully the economic value of products. Residential recycling rates in the United States have risen from 10% in 1980 to just over 30% in 2019.86<\/a><\/sup>\u00a0However, those percentages vary greatly by product, with plastics recycling only rising from less than 1% in 1980 to 9% today.87<\/a><\/sup>\u00a0This is despite the fact that, on a per-metric-ton basis, chemicals are more valuable than steel, glass, and concrete\u2014materials that are recycled at significantly higher rates (figure 5).88<\/a><\/sup>\u00a0While the complexities of recycling chemicals can make it more costly, some companies seem to be finding ways to develop efficiencies and strengthen supply chains to drive down costs. By finding cost-effective ways to use circular solutions, more value can be preserved from chemical products at the end of their life. This is especially important for waste plastic, given that plastic production is expected to triple globally by 2060.89<\/a><\/sup><\/p>\n\n\n\n Mechanical recycling:<\/strong> This process mechanically crushes the plastic and remelts it into granulate (preserving the molecular structure) for use in the production of new plastics. While mechanical recycling generally benefits from having the lowest carbon footprint of all recycling technologies currently in existence,90<\/a><\/sup> it may also be limited by several factors. First, the plastics that can be recycled are limited by type and level of contaminants. Second, the process of mechanical recycling results in lower quality or downcycling of the plastic. As a result, less than 10% of plastic is mechanically recycled more than once.91<\/a><\/sup><\/p>\n\n\n\n Due to these limits, new processes are being developed and scaled to process more plastic waste for reuse (figure 6).<\/p>\n\n\n\n Chemical recycling:<\/strong> All forms of chemical recycling (sometimes called advanced recycling or molecular recycling) produce \u201cvirgin resin\u201d that can be used in pharma and FDA-grade applications (in contrast to mechanically recycled content) and can (at least theoretically) be recycled an infinite number of times without compromising quality.92<\/a><\/sup> These new processes fit into three distinct categories: purification, depolymerization, and conversion.93<\/a><\/sup><\/p>\n\n\n\n Purification: <\/em>It is a physical process where solvents are used to produce virgin-like polymers from single-polymer feedstocks or mixed plastics.94<\/a><\/sup><\/p>\n\n\n\n Depolymerization<\/em>: These technologies break down the polymer chains of a single-resin feedstock to produce a specific set of products, usually monomers. These virgin-quality monomers can then be used to create polymers and plastic resin.95<\/a><\/sup><\/p>\n\n\n\n Conversion<\/em>: These technologies break the polymer chains to produce hydrocarbon products such as naphtha or syngas. This particular set of technologies distinguishes itself by allowing for mixed plastics with higher levels of contamination. While pyrolysis (one type of conversion process) requires high temperatures, some companies are working to reduce temperatures and pressure to focus on one type of plastic.96<\/a><\/sup><\/p>\n\n\n\n Like bio-based materials, there are challenges to scaling up chemical-recycling processes.<\/p>\n\n\n\n Feedstock availability<\/em>: There is currently a feedstock shortage due to several issues, including:<\/p>\n\n\n\n To address these feedstock challenges, some companies are partnering with municipalities to increase public awareness98<\/a><\/sup>and some regions are adopting Extended Producer Responsibility (EPR) programs that stand up a Producer Responsibility Organization, funded by plastic producers, which organizes collections, transport, and sorting of plastics.99<\/a><\/sup><\/p>\n\n\n\n Regulatory uncertainty<\/em>: Twenty-two states have passed laws that recognize advanced recycling as \u201crecycling,\u201d even if they convert the plastics to fuels instead.100<\/a><\/sup> This legislation provides certainty to companies that want to invest in advanced recycling facilities. But other regulations and policies could also potentially impact the economics of projects.<\/p>\n\n\n\n Economics<\/em>: While some consumers have shown a willingness to pay higher premiums for sustainable goods, consumers tend to be price sensitive, especially in times of economic downturn.101<\/a><\/sup> Consequently, some investors may view investment in a large recycling facility to be relatively risky from a market perspective. However, this risk could be somewhat mitigated through long-term supply agreements with brands.<\/p>\n\n\n\n Incineration with CCUS:<\/strong> Today, about 19% of all global plastic waste is incinerated.102<\/a><\/sup> Some companies are working to capture the CO2 from the incineration of plastics and use the CO2 in combination with hydrogen to produce syngas for plastics production.<\/p>\n\n\n\n The push toward sustainability could challenge the industry to innovate across processes and products. As companies navigate through these new demands\u2014more sustainable, safer, reliable, and better-performing products\u2014three considerations should help guide them.<\/p>\n\n\n\n For some companies, the first step in developing more sustainable business practices is not just tracking emissions; it\u2019s taking a holistic look at current assets, data, and partnerships. An up-front assessment of current data can help identify opportunities and track progress. Taking a holistic view of all data is important since some data will be useful in multiple parts of the business. This data can be used for the discovery, development, and scaling of new materials, optimizing operations, and minimizing emissions.<\/p>\n\n\n\n Additionally, for some companies and some products, there could be natural areas for the integration of bio-based materials, recycled content, or other sustainable advanced materials. These drop-ins could help companies increase their portfolio of sustainable products with relatively low up-front costs. However, other applications may require companies to redesign the entire supply chain, which may involve a higher upfront cost. Understanding the options and cost implications of each strategy can help companies determine how to develop their product portfolios.<\/p>\n\n\n\n Forecasting is difficult in the most stable of markets, and the movement toward higher quality, sustainable products can make forecasting even more difficult. Consequently, to make the economics work, companies may need to sign long-term contracts, utilize government funding or incentives, and make efforts to garner customer loyalty.<\/p>\n\n\n\n Customers that highly trust a brand will purchase from that brand again 88% of the time.103<\/a><\/sup>\u00a0Consequently, highly trusted companies outperform low-trust companies with up to four times the amplification of market value. Brand trust is generally built upon four factors: humanity, transparency, reliability, and capability.104<\/a><\/sup>\u00a0For oil, gas, and chemicals companies, the biggest gap between the best-performing and worst-performing companies is in the intent factors (transparency and humanity).105<\/a><\/sup>\u00a0As chemical companies move toward more sustainable products, it is important that companies be transparent about their successes and failures to help reduce reputational risk and maintain brand trust.<\/p>\n\n\n\n Deloitte\u2019s Research Center for Energy & Industrials combines rigorous research with industry-specific knowledge and practice-led experience to deliver compelling insights that can drive business impact. The Energy, Resources, and Industrials industry is the nexus for building, powering, and securing the smart, connected world of tomorrow. To excel, leaders needs actionable insights on the latest technologies and trends shaping the future. Through curated research delivered through a variety of mediums, we uncover the opportunities that can help businesses move ahead of their peers.<\/p>\n","protected":false},"excerpt":{"rendered":" Two forces shaping the future of materials Innovation may be once again changing the game in the chemicals industry. Two forces seem to be driving this innovation: a heightened focus on sustainability (from companies, customers, and policymakers) and changing customer preferences. Yet, this potential transformation is taking place amid historic pressure on the industry. First, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","nova_meta_subtitle":"Advancements in science and technology are enabling many chemical companies to develop and design materials for a more sustainable future","footnotes":""},"categories":[5572],"tags":[8793,13977,19340,5528],"supplier":[8193],"class_list":["post-128739","post","type-post","status-publish","format-standard","hentry","category-bio-based","tag-biomaterials","tag-chemicalindustry","tag-decarbonisation","tag-sustainability","supplier-deloitte"],"_links":{"self":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/128739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/comments?post=128739"}],"version-history":[{"count":0,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/128739\/revisions"}],"wp:attachment":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media?parent=128739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/categories?post=128739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/tags?post=128739"},{"taxonomy":"supplier","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/supplier?post=128739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/renewable-carbon.eu\/news\/media\/2023\/06\/image-10.png\")
<\/figure><\/div>\n\n\n\nShifts in demand<\/h3>\n\n\n\n
Advanced materials: Making the impossible possible<\/h3>\n\n\n\n
![\"\"](\"https:\/\/renewable-carbon.eu\/news\/media\/2023\/06\/image-11.png\")
<\/figure><\/div>\n\n\n\nEmerging sustainable ecosystems<\/h3>\n\n\n\n
![\"\"](\"https:\/\/renewable-carbon.eu\/news\/media\/2023\/06\/image-12-736x1024.png\")
<\/figure><\/div>\n\n\n\nBio-based materials<\/h3>\n\n\n\n
Circular materials<\/h3>\n\n\n\n
![\"\"](\"https:\/\/renewable-carbon.eu\/news\/media\/2023\/06\/image-13.png\")
<\/figure><\/div>\n\n\n\n![\"\"](\"https:\/\/renewable-carbon.eu\/news\/media\/2023\/06\/image-14.png\")
<\/figure><\/div>\n\n\n\nThree strategic levers for chemicals companies<\/h3>\n\n\n\n
Realizing value from existing assets and data<\/h3>\n\n\n\n
Making the economics work<\/h3>\n\n\n\n
Maintaining brand trust, increasing enterprise value<\/h3>\n\n\n\n
About the Deloitte Research Center for Energy & Industrials<\/h3>\n\n\n\n