Circular economy development

How to develop a real circular economy I Covestro

Achieving the circular economy: a matter of synergies

The future of industry and of the planet depend on a commitment to fully implement a circular economy. To implement it, we can no longer rely on the good will of individuals, but joint actions must be put in place between social economic and political parties. This is the only way to promote innovation and bring new materials and sustainable technologies to an economy of scale. These are complex challenges, but with enormous potential: it has been calculated that the circular economy could generate economic benefits of up to € 4 trillion by 2030.

The plastics industry is the one most involved in the new changes. On the one hand with the production of alternative materials to synthetic polymers of fossil origin, on the other with the search for innovative production processes that emit less CO₂, finally with the recovery of waste and scraps and their intelligent reuse in the form of recycled raw material.

Global resource consumption has more than tripled since 1970 and it is estimated that the expected economic recovery of 2021 will generate the second increase in CO2 emissions in history. In addition, countries with emerging economies, do not have access to gathering and disposal of waste: a serious threat to pollution and the protection of the environment of the whole planet.

The only opportunity is to implement the circular economyon a global level. It is the key to achieving climate neutrality, resource conservation and environmental protection. Covestro, as a leader among plastics manufacturing companies, is ready to make its contribution to tackle a great transition together with other social and political actors and accelerate the pace towards greater circularity. When it comes to decarbonisation, the polymer chemical industry faces a double challenge because fossil resources and especially crude oil serve not only as a source of energy but also as a source of raw material in the production process.

Drive on the circularity of raw materials

If the basis of all polymers is carbon, the goal is to obtain it from alternative sources to oil.
There are three ways:

  • from biomass such as rapeseed or sugar beet
  • from the recycling of waste
  • from recovery of industrial processes or from the atmosphere.

Globally, only 9% of plastics are recycled: an unacceptable source of pollution and waste. Although plastic recycling technologies are very advanced, it is still not cost effective to produce polymers with recycling compared to the use of oil. It is essential that politics attends with incentives and taxes to make the use of raw materials competitive at least as much as that coming from fossil sources. The European Union has set itself the goal of achieving zero emissions and pollution by 2050. With the Green Deal, very important guidelines have been established:

  • packaging from recycled materials and repairability of electronic objects
  • optimized waste management at EU level
  • classification of economies considered sustainable, with penalization of the polluting ones
  • eco-bonds and green finance to support virtuous activities.

The chemical industry is called on the research front to improve plastic recycling processes, so as to raise the quality of the resulting raw material and make it possible to produce it in an economy of scale. In this regard, Covestro has demonstrated with various experimental projects which then went into production, how much it is possible to reverse the trend and make the recovery and recycling of plastic highly interesting.

Green technologies for energy production

Decarbonising the polymer chemical industry means using energy from renewable or in any case sustainable sources. Also in this field, Covestro, in line with its corporate mission, has signed an electricity supply agreement with the largest producer in the world of offshore wind, the Danish company Ørsted. Under this contract, part of the production in Germany will be powered by a wind farm with a capacity of 100 megawatts built off the North Sea island of Borkum. This is an unprecedented step for the chemical industry in Europe. However, the German chemical industry alone would need around 600 terawatt hours of affordable green energy, which is more than that of the entire nation. This is why we are looking at hydrogen as an alternative source of energy.

Hydrogen as an energy source

Hydrogen is an efficient propellant. It has a higher energy density: 1 kg contains the same energy as 2.4 kg of methane and 2.8 kg of petrol. Hydrogen engines have an efficiency of up to 60% compared to thermal engines which, on the other hand, oscillate between 20% and 35%. It is also easy to store and transport. Used as a propellant it does not have any kind of polluting emissions because the result of combustion is only water.

The simplest and cheapest way to produce hydrogen is to extract it from hydrocarbons or from coal gasification. This method, however, is a source of CO₂ emissions and does not solve the greenhouse gas problem. The alternative is an electrolysis process that splits the water molecules with electricity, obtaining hydrogen on one side and oxygen on the other. If the process is carried out with wind or solar energy, green hydrogen is obtained with a zero-impact process. This system would also make it possible to absorb surplus energy from renewable sources which is not convenient to store in expensive and polluting batteries.

I think hydrogen is very important for energy-intensive industries like steel and chemistry. It is the best alternative to reduce CO₂. We need to produce more of it and the infrastructure to bring it to production sites. It is a great challenge that requires international cooperation. Just as a collaboration between the chemical and energy industries is necessary for the production of hydrogen.

Markus Steilemann

CEO of Covestro

If the investment benefits/revenues are currently low, over time the production of scale will lead to an economic and not just environmental advantage. As well as in wind power, where new technologies have allowed a reduction in costs of 70% compared to the beginnings: now the production of energy in offshore sites is almost as convenient as traditional methods even without government subsidies. This is why the economic and regulatory support of the policy remains crucial in the initial phase and has an action that pushes change towards sustainable economies.

The EU aims to install 40 gigawatts of electrolysers by 2030. These initial projects can lay the foundation for cost-effective scale production. This is how sustainability is created: through projects that become a concrete vision of the future that will be realized.

Not only production with new raw materials but also reuse and recovery

In addition to making production processes completely fossil-free with the use of green energy and renewable raw materials, the industry must build products that are reusable, repairable, with no scheduled expiry. At the end of its life, an artifact must not become waste but a resource to be recycled. The recovery of the raw material requires above all changes in the behavior of people and society. Conserving the limited resources of the earth and protecting the environment and nature must be the main concern of politics which, through legislative acts, can incentivize, regulate and direct the actions of people such as those of production. More and more joint solutions are needed.

There are more and more intuition, ideas and inventions that we need to realize together. But we also need better framework conditions for the investments that need to be made.

Markus Steilemann

CEO of Covestro

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