The green wave in chemicals is coming and will soon be a tsunami – the global green chemicals and materials market is already $100+ billion and expected to grow at close to 10 per cent to more than double to $229 billion by 2030. There is a growing awareness of consumers of the products and their antecedents and also their subsequent sustainability, which is driving the demand for green chemicals. This greening journey may not be entirely smooth as there are some speedbumps in terms of technology scalability and supply chain development which need to be sorted, but the potential exists.
Around us a new green revolution is coming
The greening of chemicals is happening all around us and it is happening at both ends of spectrum - starting with low-carbon feedstock to develop new-age chemicals and moving at the end towards recycle/ reuse of chemical material for sustainable products and conserve energy.
On the input side we are seeing emergence of bio-based chemicals and nanoparticle synthesis as key trend in various applications. Solvents which are a key foundation of chemicals, are now being derived from sugar, beet or agri-waste, that do not release any toxic by-products or volatile organic compounds during usage, for e.g., cyrene, an eco-friendly solvent which is developed by synthesis of cellulose waste, is via a manufacturing process that is almost energy neutral and infact releases water to the environment. Apart from these, biochemicals like rhamnolipids, lipopeptides for use in detergents, soaps etc. are seeing double-digit growths. And more innovation is emerging from India with examples such as starch-based super absorbent agrochemical that increases sugar cane yield and the increasing spread of nano-fertilizers and biopesticides being used in agriculture.
Then on the other end, we are seeing wealth from waste, where usage of biotechnological processes such as anaerobic microbial chain elongation is being used to break down waste into chemicals and polymer building blocks similar to a laboratory reactor. There is also innovation in bioplastics, where composites and bio-cellulose are being used to develop fluid plastic for food packaging, which can be reused or if put in compost bin, decomposes in less than a year reducing pollution. And single-use plastic straws which used to be a key pollutant ending up in oceans, is also being addressed, where edible straws have now been developed from seaweed and kelp, leveraging our ocean ecosystem.
There is also focus on biodegradable green polymers, where chemical majors are developing chemicals like Stannous Octoate, Stannous Neodecanoate in India, which can be widely used in coatings, adhesives for energy solutions and have minimal environmental impact – with such innovation in the works there is a new green revolution in the making!
Looking within to cleaner chemicals
There is also scope for a cleanup in chemicals production itself, as chlor-alkali chemicals, petrochemicals and fertilizers are significant guzzlers of energy, and how the process is decarbonized through better energy efficiency and renewable electricity usage will be critical.
As per KPMG analysis, a small size 300 ktpa alkali chemicals plant can consume upto 100MW power and upto 30,000KL water per day, and a similar 800 ktpa petrochemicals plant can use upto 40MW of power. Fertilizers on the other hand use both natural gas as input as well as process heat and electricity. All of this can be addressed through better planning and usage of renewable electricity for power and replacing ammonia from natural gas with green ammonia, which has significant potential for use as drop-in in complex fertilizers such as DAP, and also to a large extent in nitrogenous fertilizers such as urea.
There are however challenges to be addressed in terms of round-the-clock affordable renewable power that will be required for these continuous process industries, also transmission connectivity and tariffs. In addition, there is the economic aspect of the alternate feedstock like can green ammonia be cost competitive with grey ammonia from natural gas. So, while during the peak of geo-political conflict LNG prices had shot up to close to $35/ MMBTU in mid-2022, grey ammonia prices were touching around $900+/ton which was close to the cost of green ammonia, that was a transitory phenomenon. With gas prices tapering down, grey/ regular ammonia is now around $4-500/ton , and many green ammonia projects which had seemed viable then are not economically feasible now. In such situations it is therefore important that the requisite infrastructure enablers and financial incentives and mechanisms are in place to promote the greening of chemicals.
So, while the green potential of chemicals is there on the horizon, we need to have a two-fold focus to bring it nearer – a) need to enable the supply chain of biomaterials & resources and equitable access to technology for green chemistry, and b) need to have appropriate policy regime and capital incentives/ PLI to help chemical companies reduce their carbon quotient and move to low carbon and efficient production of chemicals. These aspects will help boost growth of greener chemicals, which in turn will decarbonize other sectors, but also help the chemical sector move towards a greener future.
[1] KPMG analysis, Straits research
A version of this article was published on Oct 04, 2023 by ETEnergyworld.com