The UK chemical manufacturing industry has faced strong economic headwinds since 2020, contracting by almost 10% in 2023 alone.1
Yet it continues to face significant challenges in high energy prices and increasingly rigorous decarbonisation legislation. While the sector is not unique in facing these challenges, the ‘always on’ model used by many plants to maximise yields leaves this industry particularly exposed to tightening regulations and pricing volatility.
Activity in the sector also remains depressed and has yet to fully return to pre-COVID production levels. The Chemical Industry Association (CIA) reported in 2024 that the industry’s output was 23.2% below pre-COVID levels, and only marginal improvements are expected this year. Considered alongside the fact that the UK’s industrial energy prices are 60% higher than their competitors in the EU, it is clear British chemical plant managers are facing an enduring disadvantage.
Further concerns have also been identified in Aggreko’s research into the industry for its two recent whitepapers, Process Matters. Together with independent research partner Censuswide, the company questioned over 150 process engineers working in in the UK petrochemical industry on the operational challenges they face. Almost 90% of respondents expressed concern that their current power equipment could impact refinery operations, underlining how site processes continue to be hampered by inefficiency.
Though this is undoubtedly a challenging situation, chemical plant managers must find a way to navigate through it, especially given their industry’s key role in the UK’s larger decarbonisation plans. Indeed, the CIA has previously emphasised that chemicals in energy-saving products are crucial for achieving carbon neutrality, highlighting the industry’s role in meeting net zero targets.2
But while a transition to net zero chemical production could significantly impact national decarbonisation efforts, the sector remains hampered by energy prices. A key question therefore remains – how can plant stakeholders decarbonise their operations while remaining competitive on the global stage?
Necessary Skills for Recovery
More efficient power generation technologies may offer a solution, especially in a sector where an ‘always on’ approach often mandates the use of backup generators and uninterruptible power systems (UPS). However, relying on fossil fuels to power process equipment can result in a large carbon footprint, especially considering the sector’s energy-intensive nature.
Due to the scale of this challenge, additional expertise may be required to solve it. But while the aim of efficiently reducing emissions may be clear, external factors can make it harder to achieve this goal. Skills shortages are the most prominent among these concerns, with the Chief Executive of the Chemical Business Association citing this issue as a major issue impacting the sector’s long-term sustainability.3
To address this, it is vital that site stakeholders analyse where knowledge gaps may be apparent in their existing workforce, and leverage expertise within the supply chain to fill them. This is especially important given that technology behind the generators and HVAC equipment continues to evolve rapidly.
Leveraging Expertise, Identifying Efficiency
If chemical manufacturers are to decarbonise as efficiently as possible, all parties involved in equipment procurement need to stay as informed as possible on the latest innovations in power and temperature control provision. Doing so will require a shift in plant decisionmakers’ interactions with the supply chain.
Specifically, to better access sustainability-minded expertise at a time of skills shortages, there is likely to be a shift from a transactional relationship dominated by the point-of-purchase to an ongoing, advisory partnership. In anticipation of this, plant decisionmakers should evaluate their existing supply chain to ensure potential equipment providers are using industry-leading product designs and can offer technological expertise and engineering support for these models.
Sourcing Sustainable Suppliers
Yet awareness of the latest power and HVAC technologies is only part of the solution. In a sector experiencing a downturn, capital expenditure budgets may not be sufficient to purchase the high-performing, highly efficient generators or process equipment at prohibitively high up-front costs required. However, the need to do more with less can open up opportunities for innovation. Strategies based on r hire and the temporary procurement of power and HVAC systems can remove the financial barriers associated with permanent installations, while allowing immediate access to their performance benefits.
Monitoring the Supply Chain
Applying latest power generator and chiller system technologies on a hired basis can help decisionmakers reduce plant energy consumption, costs, and emissions. Additionally, decentralising certain aspects of power provision can help further insulate energy-intensive plants from the volatility associated with grid-based power, while alleviating pressure on squeezed financial bottom lines.
But for this approach to be truly effective, it is essential chemical companies engage suppliers that can offer a wide range of power and temperature control solutions swiftly and promptly. Aggreko, for example, has invested heavily in Stage V generators and battery energy storage systems (BESS) for its Greener Upgrades portfolio to help site equipment procurement specialists improve energy efficiency, whilst reducing carbon emissions.
The ability to quickly source and implement these greener solutions with temporary equipment and technologies is also essential to adding resilience and flexibility to site operations. Specifically, scaling power and temperature control up and down to match shutdowns, turnarounds, and seasonal demand fluctuations allows site stakeholders a greater level control over essential site processes. Easier access to smaller or larger solutions depending on evolving site need is instrumental to enhancing plant performance while also reducing emissions through more efficient processes.
Remote monitoring systems offer another way for chemical manufacturing stakeholders to do more with less. With company engineers remotely monitoring the health of specified equipment from a central operation centre and providing technical insights, further, data-informed opportunities for improvement can be more easily identified and implemented. Using this model, monitoring services such as Aggreko Remote Monitoring have helped plant stakeholders improve overall energy efficiency while also reducing emissions and fuel costs.
Looking to the Future
In conclusion, the UK chemical manufacturing industry faces a difficult balancing act, needing to decarbonise while also contending with high energy costs and an uncertain economic landscape. However, by exploring the diverse options available within the supply chain, plant stakeholders can uncover innovative solutions that boost both efficiency and sustainability.
Engaging with suppliers that provide cutting-edge technologies and expertise including the latest advanced power generation and HVAC systems, can provide the necessary tools to address these challenges. By fostering collaborative partnerships and leveraging temporary procurement strategies, the industry can not only mitigate financial constraints but also drive forward ongoing decarbonisation efforts. It is therefore imperative for plant decisionmakers to remain proactive, continuously seeking out and implementing the latest technological improvements to ensure competitiveness and contribute to a greener future.
REFERENCES
1 https://cefic.org/a-pillar-of-the-european-economy/landscape-of-the-european-chemical-industry/united-kindgom/#:~:text=Labour%20and%20raw%20material%20shortages,thanks%20to%20strong%20pharmaceutical%20production.
2 https://www.cia.org.uk/the-chemical-industry/our-route-to-net-zero
https://www.chemicalindustryjournal.co.uk/the-future-of-the-chemical-supply-chain-new-government-priorities-2
