The sustainable future of chemistry
Sustainable future for chemistry is now
People are asking for products that are more sustainable. It is this paradigm that in the future will make the difference for the success or economic margin of a company. Chemistry has the great advantage of being able to intercept and modify the production and procurement processes of raw materials, so as to pass from a highly impacting industry to an industry promoting change and eco-sustainability.
Covestro since its inception has wanted the principle of compatibility and sustainability as the inspiration of its vision of all its products and processes. The press conference for investors, held in virtual form on September 28, 2021, was an opportunity to reaffirm the direction of investments over the next five years. The strategy, called "Sustainable Future", can be summarized in 5 main points:
- take into account and accept the sustainability trends that come from consumers and the market
- invest 1 billion euros for circular economy projects over ten years
- set an EBITDA growth forecast of 2.8 billion euros in 2024
- resume investments with the construction of a new MDI plant
- to expand the number of sustainable and bio-based products (currently 45 products are already on the market).
The goal is ambitious: not only to welcome the requests for change in a green sense, but to become promoters of change through a new industrial culture that knows how to combine growth with requests for improving relationships between people, the search for new production technologies and the use of digitalisation to improve occupational safety, optimize costs and improve research on polymers.
Sustainable materials for the demands of the markets
Political initiatives to reduce greenhouse gases with investments and legislative directives in Europe as well as in the United States or China, open the prospect of new and increased demands for sustainable products and technologies. If we combine the growing demand for raw materials and their hoarding, it is clear that the circular economy and the replacement of fossil raw materials with recovered or biomass materials is the only way to grow and establish itself on the markets. Construction, electromobility, health are among the sectors that drive the demand for new, more efficient and less polluting materials. The goal is to produce 100% of the products from alternative raw materials. To achieve this goal it is necessary to implement new research or pilot projects and consolidate existing technologies such as:
- recovery of CO2 emitted from industrial sites: research already tested which has led to the replacement of 20% of petroleum-based carbon for mattress foams and sports flooring sub-bases.
- polycarbonates from recycled raw materials: new high quality materials that contain up to 75% of recycled content with a reduction of the carbon footprint of up to 50% and applied in sectors such as consumer electronics.
- bio-based coatings and adhesives: with carbon-based hardeners from recovery up to 70%. Designed for the protection of car interiors, they improve their habitability and future disposal.
Business growth supports and nourishes sustainability
Profitability and sustainability are values that feed each other. A company in good economic health can afford to invest in new projects and investments. As Thomas Toepfer, CFO of Covestro reiterates:
"We are now in excellent economic shape. But we must not be satisfied. To achieve our ambitious goals and become fully circular, we are planning a targeted capital expenditure of around € 1 billion on circular economy projects over the next ten years".
To strengthen its presence in the markets, Covestro has radically changed its approach, placing the needs of production companies at the center and re-establishing its production and business organization from this point of view. These are the key points that aim to establish the centrality of the customer:
- ensure optimal use of materials: with integrated end-to-end planning and guidance throughout the supply and production chain;
- strengthen the offer position: with products targeted to the customer, proposal of innovative products and lean order management;
- reliability of supply: in terms of quality and cost / material optimization;
- support also for production with limited volumes with a correct balance of costs and solutions.
Alongside high-end and highly innovative products, consolidated materials with an optimal quality / price ratio will remain.
Investments for new productions of sustainable materials
Covestro has resumed the project for the construction of a plant for the synthesis of MDI. Thanks to a proprietary technology (adiabatic-isothermal phosgenation, called AdiP), electricity consumption and vapor emissions in the production of MDI are drastically reduced with a CO2 saving of 35%. In addition to the sustainable process, bio-based material elements will be adopted, such as benzene and aniline obtained from biomass, which will make polyurethanes with a reduced carbon footprint. MDI is a precursor and is used as a catalyst in the production of rigid polyurethane foams for energy efficient insulation solutions. Demand is expected to increase by around 5% per year until 2025 and will mainly involve the construction and refrigeration sector. To meet the demand for TDI (precursor of soft polyurethane foams), the production capacity of the Dormagen plant in Germany will be expanded. Through an investment and acquisition plan, by 2025 the production of polycarbonate will also be increased, another material for which a substantial increase in requests is expected in numerous sectors: construction, automotive and medical.
Together with the sustainability of materials, Covestro has for some time been pushing for the reduction of CO2 also in production processes through digitalization and with the use of energy from renewable sources. In 2021, the ISCC Plus (International Sustainability & Carbon Certification) certification was obtained for three industrial sites: Antwerp in Belgium, Shanghai in China and Krefeld-Uerdingen in Germany. A certificate that not only allows traceability along the supply chain, but verifies that the company meets both environmental and social sustainability standards. This recognition in turn helps Covestro's customer industries to reduce their carbon footprint and offer end consumers sustainable products and meet the legislative regulations that impose increasingly restrictive limits. As Markus Steilemann, CEO of Covestro notes:
"There is a growing demand for sustainable solutions around the world and this offers us significant potential for further positioning in the market. Our high-tech plastics already enable sustainable innovations in many areas. On our journey to becoming fully circular, we are selectively increasing our capital spending and enabling our clients to become more sustainable with bespoke solutions".