March 6, 2023

Christopher Bartels

As Global Account Manager Vertical Market Chemicals, I am responsible for some of our largest and most important existing customers. As a platoon leader in the volunteer fire department, I am also regularly involved in the transport of hazardous materials and chemicals.

Circular Economy in the Chemical Industry - Challenges on the Way to Sustainability

In the roughly 150-year history of the German chemical industry, it has already had to master a large number of social, economic and geopolitical challenges – and each time, one of Germany’s leading industrial segments, including all its value-adding partners, has been able to adapt and position itself resiliently.

More than ever before, innovation, the willingness to take risks for sustainable investments and the ability to change are currently in demand. And one of the reasons for this is that the cost of one of the main sources of production has risen dramatically.

The economic environment, the markets and also the market competitors have always been subject to numerous influencing factors, often associated with risks for individual companies or entire segments. At the same time, however, opportunities to achieve ambitious and necessary climate protection targets or to open up new markets or customers are also becoming apparent.

The chemical industry and its importance for Germany as a business location

Today, the German chemical industry generates sales of almost 200 million euros and employs 465,000 people. A respectable foreign trade surplus in chemicals and their precursors and by-products are integral components of German performance in international markets. They underline the competitiveness of German companies in this segment. Around one fifth of the current 40 DAX companies are representatives of the chemical sector. The importance of the chemical industry and its products for Germany as a business location is undisputed. At the same time, there are numerous partners involved along the value chain, for example from logistics and transport

Despite all this, the chemical industry in Germany is in a difficult situation. On the one hand, the topics of sustainability and the circular economy are more important than ever, and on the other, the current economic situation against the backdrop of geopolitical events is making immense demands; also in order to be able to meet the demands of shareholders. In addition to a steady increase in legal regulations in the handling of hazardous substances and products and increasing digitalization, it is the core processes that pose the greatest challenges. Large quantities of fossil fuels such as natural gas are needed to cushion the already energy-intensive production process in times of falling market prices and margins.

Sustainability is not a fashionable topic in the chemical industry

Although sustainability programs and initiatives such as Responsible Care and the Chemicals Sustainability Initiative have been in place since 1991, the topic of sustainability has not yet fully arrived in the focus of society and politics. Companies and individuals are called upon to make a decisive contribution to the achievement of the UN Sustainable Development Goals and to compliance with the targets set out in the Paris Agreement or subordinate, national targets. These state, among other things, that CO2 emissions are to be reduced by 25 percent by 2030 compared with 2010. This gives special importance to the circular economy. Circular Economy can be achieved through

an increase in resource efficiency, for example of natural gas or crude oil,
the increased use of renewable energies to operate production facilities,
the extension of product lifetime cycles
and, above all, the recycling of carbon and other substances,

make a decisive contribution to the reduction of greenhouse gases.

Investment into Everyones Future - what is now absolutely necessary

The aforementioned measures require a high degree of innovative ability and will. Even in economically difficult times, a high degree of willingness to invest is required, for example in equipping production facilities with filter systems or photovoltaic and solar systems for the independent generation of necessary quantities of electricity. However, this readiness must receive attention along the entire value chains, starting with the manufacturing plant and ending with the last-mile carrier that delivers the final product. It does not matter whether this is in the B2B or B2C sector. A real impact can only succeed if each participant makes his or her very own and dedicated contribution and at the same time also shares his or her own expertise or capacities with cooperation partners in order to achieve success. Examples include investment projects in recycling or the collaborative development of new technologies, such as in the recycling of polyolefins or the use of CO2 as an integral part of a production process.

Much remains to be done on the subject of sustainability in the chemical industry

It remains to be seen how, in addition to large corporations, small and medium-sized enterprises in particular will withstand the consequences of drastically increased energy costs. In addition, as is well known, there is pressure to do something for climate protection in the long term. Once again, the chemical industry, including all the partners involved, is facing major challenges that must be overcome together.

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