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ENVIRONMENTAL AND CLEAN TECHNOLOGY OPPORTUNITIES FOR THE SCOTTISH CHEMICAL SCIENCES SECTOR Report for the Chemical Sciences Scotland Sustainability Topic Group 9 December 2011 (minor updates May 2012) INTRODUCTION In February 2011 the Scottish Enterprise Boards’ Chairs Forum discussed the ‘low carbon’1economic transition. They requested that each sector should identify low carbon opportunities and provide leadership to industry. This paper will help to: highlight emerging opportunities in the Environmental and Clean Technology sectors; and further the industry’s understanding of its impact on global GHG emissions. This more robust understanding of the opportunities and impacts is designed to stimulate thinking amongst the Chemical Sciences Scotland (CSS) members. It is hoped that the opportunities and actions identified can be integrated into the planned refresh of the industry strategy, The Formula for Success. This report is structured as follows: background information to understand the sector; a description of the drivers for sustainability in the chemical sector; details of the business, innovation and emerging opportunities; a discussion of the challenges facing the sector; and conclusions. 1 ‘low carbon’ is defined at section 1.1 CONTENTS 1.0 Background 1.1 Terminology 1.2 Global perspective 1.3 Lifecycle approach 2.0 Policy and Compliance Drivers impacting on ECT 3.0 ECT Business Opportunities 3.1 Overview 3.2 Process improvements 3.3 Resource and energy efficiency 3.4 Critical raw materials 3.5 Sustainable energy 3.6 Transport 3.7 Products that deliver global solutions 4.0 Innovation and Emerging Opportunities 4.1 Innovation trends 4.2 Innovation funding 4.3 Emerging opportunities 5.0 Impact on Employment 6.0 Challenges 7.0 Conclusions 8.0 Recommendations Annexes 1 Impact on Greenhouse Gas Emissions 2 ECT Product Opportunities (by sector) 3 Scottish universities and Industry Bodies 4 Sector Support 5 Useful Reports 2 1.0 BACKGROUND 1.1 Terminology ‘Green’ chemistry describes the minimisation of environmental impacts and hazards from making and using chemical products (see the 12 Principles of Green Chemistry). ‘Sustainable’ chemistry is the application of green chemistry to processes, but these terms are used interchangeably. There can be multiple, and positively reinforcing benefits, from sustainable chemistry. In addition to the environmental benefits; there are cost benefits from resource efficiency and from the elimination of toxic hazards; and reputational benefits are likely to arise for the industry. Many chemical products can help to reduce CO2e emissions elsewhere in the economy. The Scottish Government and policy makers use ‘low carbon’ to mean any activity that will help to reduce carbon dioxide and other greenhouse gas emissions, either absolutely, or to reduce carbon intensity (CO2e emissions per £ of GVA). For this report we use the term environmental and clean technologies (ECT) as the best description of a range of activities (see section 3.1) with environmental benefits. For practical purposes ECT and ‘low carbon’ are nearly synonymous. Chemicals that are bio-based and biodegradable are not necessarily synonymous with being environmentally friendly. Sustainable chemistry can involve a trade-off between cost, raw material extraction, energy requirements and toxicity. In summary, most, but not all sustainable chemistry fits into the ECT sector that Scottish Enterprise wishes to encourage. 1.2 Global Perspective The Scottish Government’s Climate Change Act uses the same principle as the Kyoto Treaty – to reduce emissions produced within a country. The Government also aims to double exports by 2015 which is likely to increase emissions from manufacturing sectors and in particular the chemicals sector which has agreed to help the government achieve its export goal. Scottish energy intensive manufacturers are incentivised to save energy through a number of regulatory drivers for example the ETS, CRC Energy Efficiency Scheme, Carbon Price Floor and Electricity Market Reform. However, any UK / Scottish legislation that imposes tighter constraints on energy consumption and carbon emissions versus competitor regions can lead to offshoring of UK manufacturing which is likely to increase global GHG emissions. Although chemical manufacturing is a resource intensive industry (see annex 1), the products that it produces then act as an enabler across most other industries and society, which can have beneficial or adverse impacts. Research2 by McKinsey, concluded that every tonne of CO2e emitted by the chemical industry in producing products enabled over 2.1 to 2.6 tonnes to be saved elsewhere in the economy. The most significant savings arise from the use of: insulation materials, fertilizers, crop protection, advanced lighting, lightweighting components for transport, low temperature detergents, biofuels, and improving the efficiency of renewable energy (eg solar efficiency). 2 Innovations for Greenhouse Gas Emissions, ICCA (industry body), 2009, McKinsey 3 Without chemicals these reductions could either not be achieved, or would be achieved by using other more GHG intensive techniques. For example, without fertilizers, agriculture would be less efficient and more land would need to be converted to agriculture. The chemicals industry can therefore help to provide solutions to global environmental challenges, including mitigating climate change, food security, energy security and clean water. Scottish emissions could be reduced by closing Scottish plants, and importing the same products from overseas; however the the Scottish chemical industry is far more carbon and energy efficient than most of its competitors, particularly those from developing countries (outwith Kyoto) and this would have the effect of significantly increasing global emissions. For example, the conversion factors published by Defra (2011) show that electricity produced in the EU emits 0.44g CO2e per kwh against 0.94 for China and 1.44 for India. More specifically, information received from Ineos, indicates that in certain cirumstances the manufacture of PVC in China is 4.6 times more carbon intensive than the equivalent in the UK. The CSS Industry Advisory Group considers that the Scottish Government Climate Change Act targets may have adverse unintended consequences. If offshoring of Scottish manufacturing does occur this will impact on reduced economic growth in Scotland and may increase global GHG emissions. 1.3 Lifecycle Approach A lifecycle approach is fundamental to almost all of the ECT chemical opportunities. The CO2e emissions (and other environmental impacts) should be considered from cradle to grave, including the extraction of raw materials, transport, manufacture, waste from manufacture, use of products and disposal. For example, new washing powders enable clothes to be washed at lower temperatures which significantly reduce the lifecycle emissions. Only a lifecycle approach allows answers to questions such as “which is better: bio or synthetic raw material?” A good example of a lifecycle approach to bio-based v petro-chemical based products was undertaken by the Environment Agency on supermarket carrier bags.3 Various techniques have been developed to calculate lifecycle emissions, for example, the CCaLC tool4. The important aspect is to embed sustainable chemistry into research and development and to work with product designers to ensure products are sustainable – including recyclable. Biomimicry is a specialist design technique that seeks sustainable solutions by copying nature, for example, studying human lungs to sequester carbon dioxide from flue stacks. 2.0 POLICY AND COMPLIANCE DRIVERS IMPACTING ON ECT In addition to the overriding Scottish Climate Change Act, there are many complex, and inter-related drivers for ECT in the chemicals sector. The larger chemical firms are incentivised to save energy through a number of regulatory drivers through the Climate Change Levy, European Emissions Trading Scheme, Climate Change Agreements, the CRC Energy Efficiency Scheme and the Carbon Price Floor (2013) for electricity. The ETS is being significantly tightened in 2013 with a lower overall cap and fewer free allowances being awarded. The renewable heat incentive (RHI) will subsidise combined heat and power plants, anaerobic digestion and the burning of waste for heat. 3 Life cycle assessment of supermarket carrier bags, Environment Agency, 2011 4 Carbon Calculations over the Lifecycle of Industrial Activities 4 The Zero Waste Plan and the Landfill Tax escalator are driving waste reduction. Packaging waste targets and bans on certain materials to landfill are increasing the demand for products that are recyclable. The Renewable Transport Fuel Obligation is increasing the demand for biofuels. Significant cost savings can arise from resource efficiency - reducing the use of virgin raw materials, water and effluent. The European Resource Efficiency Roadmap highlights concerns across a range of critical resources, that includes certain chemical elements. It is likely that further EU policy will be developed in this area. There are concerns about the security of supply and price volatility of raw materials such as rare earth minerals, petro-chemicals and platinum. Legislation, for example, the REACH directive requires all significant chemicals to be tested for their impact on health and the environment. The Water Framework Directive is tightening discharge consents. Many chemical companies have a corporate environmental strategy adopted from their parent company. These may focus on cost savings and/or perceived reputational and commercial advantage. 3. ECT BUSINESS OPPORTUNITIES 3.1 Overview The chart below summaries the ECT opportunities for the chemical sector, demonstrating that there are a wide range of opportunities across resource efficiency, new products and risk management. green marketing (3.0) lifecycle approach (2.3) New markets -biotechnology (4.7,6) Innovation (5) Compliance with regulations (3.0) Sell ECT goods and services (4.7, annex 2) GROWTH Process Improvements (4.2) RISK MANAGEMENT RESOURCE EFFICIENCY Reputation/ employees/ CSR (3.0) Supply chain (raw materials, packaging) (4.4) Resource security on-site renewables, diversification from oil etc) (4.5) Sustainable management of buildings, energy, water, waste, transport (4.3,4.6) work with partners and stakeholders (5) 5 There are many ECT opportunities for the chemicals sector; both in manufacturing chemicals in a more efficient manner, and in designing products for domestic and global markets with lower environmental impacts on the economy and wider society. Case studies and further information on the opportunities for innovation in processes and products for sustainable chemistry are detailed at section 4. medium Alternative energy Packaging low medium Transport high Buildings medium Waste and recycling high (supply chain) Energy efficiency very high Materials Products very high Water and wastewater Processes (reactions) The table below summarises the overall nature and scale of these opportunities (these rankings may be different for different sectors / processes dependent on the maturity of the technology and the nature of the process). low low Lifecycle approach and eco-design (high) 3.2 Process Improvements Petro-chemical inputs can be substituted for biofeedstocks which have the potential to be less hazardous and to be more easily recyclable at the end of life, however, these can give rise to conflicts over land use, especially in developing nations where the land is needed for food. Chemicals can be used as catalysts to capture CO2, for example from power stations; and carbon capture and storage technology, once the techology is proven and economically feasible, could be used to capture CO2 from the chemicals industry.The CO2 can be used as a feedstock. Process improvements in manufacturing chemicals can be achieved by lowering the temperature at which chemical reactions take place, designing catalysts that are more efficient or by utilising new input raw materials. Microwave technology can induce faster chemical reactions. These ‘game changing’ process improvements can, in some cases, dwarf the incremental savings that can arise from resource efficiency measures. 3.3 The Centre of Crystalisation and Continuous Manufacturing with partner NiTech is developing a mixing technology that enables companies to replace batch processing with more efficient continuous processing. Traditional cement manufacturing emits approximately 1 tonne of CO2 per tonne of product (60% from calcination and 40% from heating). Using magnesium oxide, to replace calcium carbonate, allows reactions to take place at lower temperatures, and the reactions absorb CO2 from the atmosphere. Resource and Energy Efficiency The chemicals sector is resource intensive. However, the UK chemicals industry has improved its energy efficiency by 35% in the last 20 years. A SE commissioned report for the sector by SJW Ltd in 2008 extrapolated data from the north-east of England to produce the following figures: 6 Scotland Raw materials Energy Waste Water Packaging Cost £m 1200-1700 300-600 30-90 30-90 15-30 % of turnover Potential savings at 20% £m 35-50% 10-20% 1-3% 1-3% 0.5-3% 240-340 60-120 6-18 6-18 3-6 NB: these figures are indicative - not based on primary Scottish research. The report estimated that 10-20% savings could be possible at no cost, with a further 10-20% by adopting best practice. The chemical sciences sector is taking forward the recommendations of the SJW report by: assisting the sector to embed resource, and energy efficiencies; supporting the sector to consider energy from sustainable sources; and working with the sector to develop and manufacture innovative products, processes and solutions which reduce GHG emissions over the total product lifecycle; through the use of sustainable feedstocks. The Carbon Trust5 states that the most significant energy savings are in the following areas: process controls, furnaces and boilers, heat exchangers, steam leaks, insulation, variable speed drive motors, compressed air, process operations, refrigeration. It is important to optimise existing facilities, before embarking on capital expenditure, for example ensuring good operator training and maintenance of equipment. A DEFRA6 report from 2011 estimates (taking 15% share for Scotland) that low cost savings for chemical companies are £13m from energy, £659m for materials and waste, and £1.6m for water. This would reduce Scottish emissions by 96,000 t/CO2e from energy and 235,000 tonnes from waste. Further, even larger financial savings could arise from measures with more that a one year payback of £22m, £796m and £11m respectively. The North-west Development Agency undertook an evaluation7 of its support to SMEs through waste minimisation, resource management and reducing environmental risk. £23.5m savings were identified of which £3.2m (14%) were with chemical companies - energy £1.5m, materials £0.5m, waste £1m and water £0.2m. There are significant discrepancies in the figures between these three studies, so the figures can only indicate the order of magnitude of the resource savings potential. It is good practice to use the principles of the waste hierarchy as follows: Resource Efficiency Hierarchy Reduce (best option) Reuse Recycle Waste 3.4 Examples energy efficiency, process intensification industrial symbiosis, use of waste heat waste, water, critical raw materials energy from waste, industrial symbiosis Critical Raw Materials There are concerns about the future availability of elements that are currently essential to build a wide range of ECT products such as solar panels, catalysts and batteries for electric cars (Chemical 5 Chemicals Sector Overview, Carbon Trust, 2006 6 Further Benefits of Business Resource Efficiency, Defra, 2011 7 Evaluation of the ENWORKS Minimisation Project, NWDA, 2008 7 Engineer Magazine, Oct 2011). This includes the rare earth elements. Demand is threatened by a mix of political instability, geological scarcity, environmental impact of extraction and speed at which new deposits can be brought into production. However, most of these elements are infinitely recyclable and part of the solution will lie in better design and closed loop systems, ie establishing comprehensive recycling infrastructure. Chemical Sciences Scotland is feeding into the work of the CIKTN and Business Council for Sustainable Development who are working on these issues. 3.5 Sustainable Energy There is scope to reduce emissions by utilising sustainable energy. The biggest potential is from burning biomass (from either waste or new materials). Many of the larger companies have combined heat and power (CHP) plants to increase efficiency. A number of Scottish sites are pursuing the potential for renewable electricity to be produced on site, eg biomass, wind turbines or tidal power. Co-location can provide opportunities for efficiencies by enabling the efficient use of technology to share or re-use resources, eg CalaCHEM have attracted other users to their site at Grangemouth by sharing their CHP and effluent treatment plant. 3.6 Transport The chemicals sector has a direct impact on transport through the HGVs and container ships that are used to transport raw materials and finished products. Transport costs can be reduced through efficient logistics and by producing chemicals in concentrated form. The sector has an indirect impact on transport through the use of materials (eg lightweighting, more fuel efficient cars) and through transport fuels. Ve 3.7 Products that Deliver Global Solutions and Mitigate GHG Emissions As stated earlier, the chemicals industry can help to provide solutions to global environmental challenges, including mitigating climate change, food security, energy security and clean water. For example, 145,000 t/CO2 per year could be saved if all Scottish cars and LGV’s were converted to low rolling resistance tyres (2% fuel saving). Polimeri Europa research and manufacture rubber polymers for use in low rolling resistance tyres, whilst the Michelin factory in Dundee manufactures low rolling resistance tyres. ECT products include fibre-based materials (construction and car industry), bioplastics and other biopolymers, surfactants, biosolvents, biolubricants (cosmetics, household and industrial detergents, paints, adhesives, inks, papermaking), ethanol and other chemical building blocks, biodiesel, pharmaceutical products including vaccines, enzymes (industrial, healthcare and consumer applications) and cosmetics. FUJIFILM Imaging Colorants is a world leader in innovative colorants for the digital printing market. They develop and manufacture colourants for inkjet printers, coloured chemical toners for laser printers and photocopiers and infrared absorbers for a range of applications. Many, but not all, of these solutions are within the sphere of industrial biotechnology which overlaps with Life Sciences. Enzymes, micro-organisms and various forms of biomass can generate base materials for a wide variety of products including agrochemicals, food and feed, detergents, paper and pulp and textiles. Ingenza has expertise in the production, development and application of industrial biocatalysts (industrially suitable enzymes) and bioprocesses for the manufacture of organic compounds for the pharmaceutical, fine chemical, food and renewable fuel industries. This includes microbial strain construction, microbes for use in biofuels, pharmaceutical proteins and small molecule pharmaceutical intermediates. 8 Fungi can be used for food production, production of chemical feedstocks, waste treatment and genome sequencing. Algae have the potential as a fast-growing source of marine crops to be harvested for chemicals and fuels. Companies, such as Ecover, specialise in designing cleaning products for consumers that are based on plant and mineral based ingredients and are fully degradable. Further details of ECT product opportunities, and their links to the Government’s key sectors, can be found at annex 2. 4. INNOVATION AND EMERGING OPPORTUNITIES 4.1 Innovation Trends EuCheMS published ‘Chemistry – Funding solutions in a Changing World – a Roadmap for Chemical Science in Europe’. This summarises the innovation priorities and opportunities in energy, resource efficiency, health and food productio, including: catalysts that use less rare earth elements; better design for recycling; collection of low concentrated elements eg phosphates in water; clean up nuclear and other contaminants; and resource substitution (eg reduce lithium in batteries). The Chemistry innovation KTN produced a roadmap describing the trends, drivers, needs and available technology for sustainable chemistry and sustainable products. There is an excellent series of case studies listed: 4.2 by application (adhesives, energy, lubricants etc); and by problems (durability, energy efficiency, human toxicity etc). Innovation Funding Sus Chem is the EU Technology Platform for sustainable chemistry. Its current priorities are research and innovation on industrial biotechnology, materials technology and reaction and process design. The Technology Strategy Board is investing £2.5m in feasibility studies and collaborative research and development projects in the field of high-value chemicals. The Research Council runs an Integrated Biorefining Research and Technology Club aimed at developing biological processes and feedstocks to reduce our current dependence on fossil fuels as a source of chemicals, materials and fuel. SE is participating in an EU funded project, the BIOCHEM toolbox, to improve the innovation capacity of bio-based SMEs with the aim of reducing dependence on petro-chemicals. It encourages use of the CCAlc life-cycle tool. Three Scottish companies are involved in the pilot: Aquapharm for bioactives from natural sources; Aboleo producing biosurfactants and Giltech for silver based biocides. Game changing technology? Edinburgh Universtity is developing dyes that can trap sunlight and convert it to electricity. This low cost solar solution can work in low light levels and can be incorporated into textiles (clothing) or into building materials (walls). It could revolutionise portable energy needs, and for example, make the AA battery redundant. Renewable hydrogen, make from wind power, can be used in a fuel cell to produce electricity, heat and fuel for transport. Hydrogen could be pumped through the existing gas mains network into residential homes to create a zero carbon energy solution. 9 Scottish Universities are also actively involved in world leading research into industrial biotechnology and sustainable chemistry. Some examples are listed at annex 3. 4.3 Emerging Opportunities Scottish Enterprise is currently working with Chemical Sciences Scotland and other partners on a number of proposals for transformational projects, some of which will bring sustainability benefits. INEOS are considering a partial transition of the refinery to a fully integrated biorefinery, whilst retaining the value of the fossil fuel based refinery, resulting in sustainable fuels and chemical feedstocks and a potential Centre of Excellence in CO2 utilisation as a renewable feedstock; A biotechnology Centre of Excellence is being considered that would bring together academic expertise with company R&D to promote biotechnology opportunities. These are both within the wider ‘Grangemouth project’ proposals that would realise co-location benefits for participants, including water competitiveness. Creating a critical mass of biotechnology expertise is crucial in enabling further downstream product development opportunities using biofeedstocks. Other emerging opportunities include: Developing and manufacturing innovative products, processes and solutions which reduce GHG emissions over the total product lifecycle; and through use of white (industrial) biotechnology; Develop carbon dioxide as a synthetic feedstock for polycarbonates and fuels (albeit this is at an early research stage); Oil molecule efficiency. Further analysis is required to more fully characterise the opportunity and clarify the specific exploitable potential for Scotland; The Rowett Institute and Ingenza are examining how enzymes from the microbes that live in the stomachs of cattle and other ruminants could be used industrially to break down the tough internal structures of plant and tree matter to create sustainable alternatives to petrochemical derived products such as fuel, commodity chemicals and fine chemicals. A recent Optimat report commissioned by Scottish Enterprise has identified the following market led opportunities based on the Scottish sector’s strengths: 5. bio-based chemicals and fuels, speciality dyes and pigments, catalysis, fuel cell materials, white (industrial) biotechnology. food additives, and nanoscale chemical processing. IMPACT ON EMPLOYMENT There is no good data on the scale of the ECT opportunity for the Scottish chemical sector – primarily because it is not well defined. 10 Industrial biotechnology is forecast to grow in the UK to £4 to £12bn by 20258 (dependent on the scenario selected). In addition biofuels, to displace petrol, diesel and jet fuel, could grow to between £1 to £7bn. No information could be found on the impact of ECT opportunities on jobs in the chemicals industry. The Opportunities and Challenges workshop hosted by Scottish Enterprise in 2010 concluded that the status quo was not economically sustainable, as global competition requires continuous investment in process improvements and resource efficiency to safeguard existing jobs. Additional jobs could be created if companies invest in ECT processes and products, specifically if first mover competitive advantage can be obtained. Industrial biotechnology may offer Scotland a sector for new high-value manufacturing roles, helping to fill the gap from the loss of traditional manufacturing. On the downside, some in the chemicals sector fear that the ‘low carbon’ policy agenda may have an adverse effect on investment and jobs in the Scottish chemicals sector (see section 1.2). 6. CHALLENGES 6.1 Much of the Scottish chemical industry is clustered around the North Sea Oil refinery at Grangemouth. By-products from the refining process are used in the chemical industry. This readily available source of carbon intensive feedstock could disencourage firms to look for ‘low carbon’ alternatives (however, companies are interested in security and diversity of supply). 6.2 Technical issues, for example, business ‘pioneers’ in sustainable heat have experienced planning delays; and policy and regulatory changes can change the economics of these longterm investment decisions. 6.3 There are significant sunk costs in production plant with a long lifespan, which can be difficult to retrofit and hard to justify new, more efficient, capital investment. 6.4 Capital investment paybacks for energy efficiency investments are typically longer than the industry demands. Bids are often competing against global competition within the same firm. One multi-national has ring fenced capital expenditure for energy efficiency which helps to overcome this. 6.5 There may be a skills issue that is slowing the rate of innovation and implementation of sustainable chemistry and ECT technologies. Most designers and chemists were not taught the principles of sustainable chemistry (it did not feature in relevant degrees in the past). Lifestyle assessments are complex, and multi-disciplinary, and a degree of risk taking is necessary to shift the focus to sustainability. 6.6 Lack of evidence of firm commercial benefits of demonstrating a low carbon approach to customers. 8 Maximising UK Opportunities from Industrial Biotechnology in a Low Carbon Economy, BERR, 2009 11 7. CONCLUSIONS 7.1 The chemical industry has an important role in the transition to an economy that minimises GHG emissions. Interfering with atmospheric chemistry is causing climate change, and maximising chemical efficiency when producing heat, power, food and chemicals is required to solve climate change. Chemicals can be produced more efficiently, some inputs can be replaced by bio-based materials, and priority could be given to developing innovative products that reduce GHG emissions elsewhere in the economy. 7.2 A lifecycle approach to decision making is essential for optimal economic and GHG decisions to be reached. 7.3 A number of factors, not least of which is the increasing price of its raw materials, are driving this. Reputational benefits could also accrue to the chemicals industry if it is seen to embrace sustainable solutions. 8. RECOMMENDATIONS (for the Chemical Sciences Scotland IAG) 8.1 Chemical Sciences Scotland should embed a sustainable and ECT approach into their refreshed industry strategy. 8.2 Foresighting research should be commissioned to identify the top ECT areas to take forward where Scotland may have competitive advantage (biotechnology has already been the subject of detailed research). ‘Process improvements’ could be a topic. 8.3 Chemical Sciences Scotland should continue to support the sector to: Utilise the services of the SE Sustainability specialists and SMAS to develop a programme of improvement for the sector to promote and co-ordinate resource efficiency, energy fuel type and efficiency and process efficiency through sharing best practice; Utilise the services of the Knowledge Transfer Networks(KTNs) especially the Environmental Sustainability KTN to adopt a lifecycle analysis approach (eg raw materials in the supply chain and sustainable design). 8.4 Chemical Sciences Scotland should highlight to the Scottish Government that the sector’s products can contribute to mitigating global GHG emissions; and highlight the potential unintended consequences of meeting the Scottish GHG targets. Increased costs in Scotland could lead to Scottish manufacturing moving overseas making it harder to meet the Scottish Government’s export ambitions and potentially having an adverse impact on global GHG emissions. 8.5 The CSS Sustainability topic group should use this paper to facilitate a discussion at a wider CSS event. The aims would be to identify the various opportunities individual companies and academia are already engaged in; to engage with the sector to discuss and expand upon the emerging opportunities already identified; and to provide a platform to take forward the recommendations in this report and to identify any further actions. Neil Kitching Strategy and Economics Team, Scottish Enterprise Amended version May 2012 12 ANNEX 1: IMPACT ON GREENHOUSE GAS EMISSIONS (GHG) The chemicals sector is perhaps unique in its multiple impacts on GHG emissions. It is a resource intensive industry that requires significant energy during manufacture. In addition, certain processes emit GHGs from the chemical reactions required to produce chemicals. The McKinsay report estimated the lifecycle emissions from the chemicals industry as follows: Global UK Scotland Emissions (2005) 000t * 000t ** 000t ** Extraction feedstock 300,000 4,000 600 Direct (mainly gas on site) 640,000 8,500 1,275 Indirect (electricity) 800,000 12,000 1,800 Process emissions (CO2 etc) 670,000 9,000 1,350 Disposal 500,000 7,000 1,050 Disposal – HFC, PFC, SF6 400,000 6,000 900 Chemicals total 3,310,000 46,000 7,100 All UK/ Scottish emissions 564,000 60,600 * from the McKinsey report ** In the absence of good data for the Scottish Chemical sector, we have used proportionate figures (15% of the UK’s chemical emissions). In addition, an estimated 41 (000t) is emitted within Scotland from the transport of chemicals (2% of HGV journeys). A UK Government report9, estimated that the UK chemical industry uses 22% of industrial energy consumption, costing £4bn, emitting 22m tonnes of CO2e (presumably direct, indirect and process emissions in the table above). Industrial process emissions total 1.7m tonnes, approximately 3% of Scotland’s emissions, or 10% of emissions from industry (source: Scottish GHG inventory). Emissions arise from the manufacture of chemicals and from losses in use. Emissions from the import of manufactured goods are excluded. Gas ‘000 tonnes CO2e Main sources CO2 677 falling cement manufacture, glass making and aluminium HFC 919 increasing Refridgeration, air conditioning, metered dose inhalers, halocarbons, foams, firefighting PFC 53 falling electronics SF6 51 increasing electrical insulation, electronics, sport shoes total 1,700 By way of comparison, a recent report by Optimat for Scottish Enterprise estimated direct (on site) GHG emissions using two different methodologies: Taking a Scottish 10.9% share of UK GHG emissions, 2007, by sector: 3.19m tonnes (compared to (1.3+1.3 =2.6m tonnes in the table above). Using SEPA’s Scottish Pollutant Inventory Release Inventory Database, 2009: 4.3m tonnes, incl 3.3mt from the Ineos refinery (excl. from table above) and chemical plant. 9 Enabling the Transition to a Green Economy – Chemicals Industry, Defra/BIS/DECC, 2011 13 ANNEX 2: ECT PRODUCT OPPORTUNITIES (by sector) Aerospace, Defence and Marine Antifouling paints on ships improve streamlining and reduce fuel usage. lightweighting aeroplane components eg nano-materials for industrial paints Construction Low carbon cement Advanced insulation materials Environmental and Clean Technologies – transport and waste lightweight polymers for vehicles lubricant additives for engine efficiency low rolling resistance tyres (Polimeri Europa) lithium-ion batteries – prolong life bioethanol from waste reverse osmosis membranes for water desalination Surfactant cleaning product to clean oil based sludges Water treatment to remove algae and bioslime carbon cloth filters – remove contaminants from gas and water streams improved sewage treatment Biodegradeable plastics (for compost waste) Energy lightweight and advanced solar cells eg thin film, speciality chemicals stronger wind turbine blades using impact modifiers, advanced polymers, resins, fire composites coatings and lubricants for marine energy organic and nanoparticle solar cells Carbon capture and storage – catalysts Hydrogen fuel cells Electrochemistry – inter-converting electrical and chemical energy (battery strorage, solar cells) algae – seaweed for fine chemicals (nutrachemicals, cosmetics) or fuel storage of nuclear waste, and clear up of contamination Food and Drink Chemicals that slow down the ripening of fruit eg SmartFresh Smart packaging (smart inks) – colour changes as food decays ammonium-nitrate fertilisers. CO2 captured and used to grow tomatoes. improved fungicides eg Syngenta’s AmistarTM protects crops and increases yields biosensors to measure nutrient and water availability Substitute HFCs in refridgeration, eg with CO2 Forest and Timber Technologies Biofuels – Ist generation wheat or sugar cane to bioethanol; 2nd cellulostic material, 3rd algae. Life Sciences Inextricably linked to the chemicals sector. Industrial biotechnology, biofuels, bioremediation etc Textiles synthetic textiles (replace cotton) cellulose based fire retardants low temperature detergents/ enzymes Miscellaneous aqueous paints (no VOCs) using encapsulated additive technology bio-based chemicals/ bioplastics – PLA (polylactic acid), biolubricants Print adhesives from bio-based materials. CFL land LED ight bulbs. 14 ANNEX 3: SCOTTISH UNIVERSITIES AND INDUSTRY BODIES some examples Biofuels Research Centre at Napier University Scottish Hydrogen and Fuel Cell Association James Hutton Institute (crop research) Abertay Centre for the Environment – research on soil and climate change University of Glasgow – research into organocatalysis for the synthesis of fine chemicals and synthetic methodologies to generate building blocks in a more energy efficient way. Scotchem (joint project beween Heriot Watt, Aberdeen and St Andrews) – continuous gas pahas hydrogenation for treatment of halogenated waste streams. ANNEX 4: SECTOR SUPPORT In addition to the EU and UK innovation support noted at section 4.2, there is a range of support available to chemical companies in Scotland: Scottish Enterprise offers a range of support; including account management services, innovation grants, SMAS, lean management and sustainability specialist support. Scottish Enterprise is currently suporting an ambitious project to develop port, logistics and distribution facitilities in the Grangemouth area aligned to a proposal to establish a biorefinery, and potentially a biotechnologies zone. There is a significant repository of information on the Business Gateway site. Zero Waste Scotland have on-line support for waste issues and can provide assistance for waste innovation projects. The Carbon Trust can help with energy matters. They published a Chemical Sector Overview report, 2006. The European Chemical Industries Body (CEFIC) published CARE+ and an Energy Efficiency Handbook for SMEs. Many companies are supported through obtaining formal environmental accredication and auditing, for example, ISO 14001. 15 ANNEX 5: USEFUL REPORTS Report UK Expertise for Exploitation of Bio-based Chemicals Maximising UK Opportunities from Industrial Biotechnology in a Low Carbon Economy Chemicals Sector Overview Innovations for Greenhouse Gas Reductions Potential Energy and GHG Savings of Renewable Chemicals and Biocatalysts Sustainable Technologies Roadmap Plant Biotechnology – an environmental scan Summary Produced by Markets and expertise FROPTOP Group Market opportunities of move to bio-based chemicals, materials and energy. £4to £12bn in UK by 2025. BERR, 2009 Energy efficiency advice. Better controls can reduce energy by 5-15% Use of chemicals in insulation, fertilizers, lighting etc saved 2x to 2.6x carbon elsewhere in the economy (compared with non chemical substitutes) Lifecycle analysis of chemicals made from bio-based materials v oil based. Website listing trends etc for sustainable chemicals A wide review of the opportunities Next Generation Crops A wide review of the opportunities Sustainable Transport Fuels A wide review of the opportunities Biofuels mapping across Scottish Enterprise’s Priority Industries Opportunities, and current provision. Sustainability – an Overview The Transition for the Chemicals Industry UK Expertise for Exploitation of Bio-based Chemicals A Vison for Sustainable Growth The chemical industry: delivering a low carbon future 24 hours a day Chemistry – finding solutions in a changing world Greenhouse Gas Emission Benchmark Exercise Summary for Life Sciences (industrial biotechnology). Full report available on request. Summary of the opportunities for a green economy Carbon Trust, 2006 McKinsey for the ICCA, 2009 BERR, 2008 Chemical Innovation KTN, Scottish Enterprise (foresighting), 2008 Scottish Enterprise (foresighting), 2008 Scottish Enterprise (foresighting), 2008 Scottish Enterprise (foresighting), 2009 Scottish Enterprise (foresighting), 2011 Defra/ BiS/ DECC, 2011 Markets and expertise FROPTOP Group Analysis of China’s chemical industry KPMG Analysis of GHG and low carbon opportunities. UK Chemical Industries Association, 2010 A roadmap of innovation in chemistry in Europe A report to advise Scottish Enterprise on the refresh of the Industry Strategy 16 EUCheMS Optimat, 2011 (unpublished)