Ninety five percent of all manufactured goods across the world rely on a chemical process1. So, when talking about sustainability and the circular economy, it is impossible to thoroughly dissect these topics without discussing the chemical industry.
Specifically, the subject of chemical waste is critical to these discussions. And as the chemical industry is so fundamental to the functioning of the global economy, its supply chain and the legislation required to regulate it are notoriously complex.
Within this complicated global picture sits the UK. Following Brexit, the UK is in the unenviable position of having to roll out an overhaul of its chemical legislation framework while also dealing with global supply chain issues, price increases, and continual turmoil in government.
So, how can the industry juggle all of this while still focusing on reducing waste and creating a circular value chain? The UK is taking steps to align its chemical sector more closely with the circular economy – but its journey is far from over.
A pillar of the UK economy
Getting these steps right has huge ramifications for the whole UK economy. 17% of the country’s R&D expenditure stems from the chemicals sector2, so it’s important that the industry remains free to innovate. This innovation is crucial if the industry is to create the newer, more efficient waste reduction technologies required to meet its sustainability goals.
The Chemical Industries Association states that 47% of UK chemical industry waste is sent for recovery3 – up from 19% in 2004. However, total waste production rose in the same period, so there is clearly more work to be done.
One of the most significant recent shifts in the country’s chemical legislation was the adoption of UK REACH regulations. This set of laws replaced the EU REACH statutes after Brexit, and many of the fundamental principles of the European version were retained, such as ‘one substance, one registration’. However, depending on where a business sits in the supply chain, its operations could be impacted quite significantly. For example, prior downstream users may find they are now categorised as importers, and, as such, must now register chemical substances under UK REACH where no such obligation existed before.
Global issues
If this was the only thing that chemical suppliers had to deal with, it would be tricky enough. However, there are many other issues on the horizon bringing legislative change to the industry. The EU’s proposed ban on PFAS, for example, will have a knock-on effect on many chemical substances in the UK. This will, in turn, affect the price and availability of alternative materials. Its Chemicals Strategy for Sustainability4 promises to have an even more pronounced effect.
Legislative shifts like this have taken place every few years, particularly since the Montreal Protocol of the late 80s, which banned a number of ozone-depleting chemicals. Since then, this list of chemicals has only expanded through revisions and new treaties such as the Kyoto Protocol and the Paris Climate Agreement.
Yearly COP conferences bring the world’s governments together to develop firmer action on climate change. Ultimately, this is in service of an important goal – the health of our planet – but it does mean the global legislative landscape is constantly shifting in favour of tighter regulations.
This means that chemical SMEs don’t just have to overcome these challenges, they have to continually strive to decarbonise their supply chains wherever possible.
Flexibility is key
Of course, these changes do not occur in a vacuum. Businesses have to adapt to them, while, at the same time, operating in a testing economic climate.
Some have criticised proposals like the EU’s Chemicals Strategy for Sustainability for being too negative – all stick, and not enough carrot – to encourage innovation. However, it can also be argued that streamlining business processes and cutting waste is simply good practice whether it is legally enforced or not, and is in line with overwhelming business, government, and end-user sentiment.
While this may require investment in the short term, in the long term, it will pay off. And UK chemical companies can access support schemes like Innovate UK and the Knowledge Transfer Network, which can promote NPD and other innovations.
Expert distributors are also available to help chemical suppliers and manufacturers make the most of their investments by sourcing and routing materials across the world. At ACI Group, we specialise in supply chain digitalisation, which enables us to respond flexibly to challenges. For example, it helps us dual source certain chemicals and materials, minimising disruption if one supply route is cut off due to regional conflicts, trade embargoes, extreme weather disruption, or any other reason.
Taking a holistic view
This also puts us in the best position to offer alternative chemicals that may have a lower overall carbon footprint, whether that is due to local sourcing or a different, lower-carbon production process.
Accomplishing this is more challenging than it sounds. Taking light stabilisers (HALS) as an example, these chemicals are coatings designed to protect polymers from the UV rays found in sunlight, which can degrade materials over time. We may be able to locally source an alternative HALS coating that produces much lower transport emissions. On the surface, this would seem to offer a lower environmental impact. However, if that HALS coating offers substandard performance and degrades rapidly, it may need to be re-applied and could mean the polymer component it is applied to needs to be replaced. In the long term, this results in more waste and a greater environmental impact.
Developing this kind of deep understanding of supply chains is critical to developing the flexibility and agility required to drive efficiency and reduce waste.
Tightening legislation targeting the chemical sector, geopolitical turmoil, and economic uncertainty mean the future is still murky. However, by ensuring they build flexibility into supply chains, chemical businesses can streamline their business processes and continually drive the industry towards its waste reduction targets.
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references
1 ICCA-UNEP, 2019
2 https://researchbriefings.files.parliament.uk/documents/SN04223/SN04223.pdf
3 https://www.great.gov.uk/international/content/investment/sectors/chemicals/
4 https://environment.ec.europa.eu/strategy/chemicals-strategy_en
