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Renewable Energy in the Manufacturing
Sector: The Next Frontier
18 March 2015
Peter Botschek
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European chemical industry:
 primary process industry
 some 29,000 companies
 employing roughly 1.2 million people
 contributing approximately €500 billion to the EU economy
 €50 billion to the EU’s balance of trade
 turns raw materials into basic chemical substances and into
intermediates used in the production of specialty and consumer
chemicals as well as high-tech materials.
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Energy Matters for Chemicals Sector
Used as feedstock AND to power plants
• Global energy demand 42 EJ/yr (two thirds feedstock)
• 10% of global (30% of industrial) demand
• Fastest growing industrial consumer
18 chemical building blocks account for 80% of energy
demand
• Average energy costs about 50%, but key building blocks
have cost impact of up to 85%
95% of manufacturing require chemistry inputs
• “Competitive Energy” biggest sector concern & growing
issue for EU economy’s broader manufacturing base
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The chemical industry today
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Bio-based products in the value chain
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Key Challenges
Access to bio-based raw materials. The bio-based economy needs
to rely on a mixture of home-grown and imported raw materials.
Today, several basic imported bio-based raw materials (like
bioethanol, sugar and other carbohydrates) are restricted by import
duties or limitations that make them uncompetitive.
Without a very wide base of renewable building blocks at
competitive market prices, it will not be possible to develop a high
volume bio-based chemical industry in Europe, unless Europe can
generate its own renewable resources at world market prices.
In a similar manner, vegetable oils, animal fats as well as Crude Tall
Oil are transformed into high value chemicals. Having these raw
materials incentivised for the production of biodiesel reduces their
availability for chemical transformation into specialties, thus putting
existing bio-based industries at risk in Europe.
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Key Challenges
Cost-competitiveness. In order for bio-based intermediates and
building blocks to grow within the chemical industry, they need to
meet increasingly demanding cost requirements that are needed for
manufacturing high volume chemicals, like ethylene or propylene.
Especially in these cases, access to low cost feedstocks is key.
Ability to integrate into current processes. In the case of new
intermediates and building blocks, the specifications need to be
acceptable, and the new intermediate or building block needs to fit
well into the chemical value chain
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Key Challenges
Higher value streams. As with petroleum refineries, industry needs
to have large volume products that have fairly low value to absorb
the cost of the operation. In addition, industry will also need higher
value but lower volume products. Petroleum refineries have been
optimised for more than 100 years, so in the case of biorefineries,
industry will need some time to optimise them and make sure of
getting some higher value by-streams. In the end, the market will
dictate that biomass as a precious resource will be used to make the
highest value possible products.
Market forces should decide what premiums are paid and what
volumes make the transition from fossil-based to bio-based
chemicals and materials.
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Key Challenges
A stable, coherent and predictable regulatory framework is
required to retain activities in bio-based chemicals in Europe. Thus
integrating the whole range of policies currently dealing with the
bio-based value chain …
Investments are needed in (agricultural and chemical industry)
infrastructure, to create bridges between both.
Increased public awareness of the environmental, societal and
economic benefits of investing in the EU bio-based economy
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Key Challenges
Smart and efficient use of bio-based raw materials to secure
sufficient quantities of biomass for food and feed of sufficient
quality and quantity as well as for chemicals, materials, fuels and
energy. Development of new policies better supporting the use of
recyclates in line with the “waste hierarchy use” concept, to
promote a more efficient and sustainable use of available (biobased) resources.
Market pull measures. As regards market development, the
Bioeconomy Strategy seeks the consolidation and expansion of
markets for bio-based products by developing standards and
standardised sustainability assessment methodologies,
development of labels, product information lists and incentives, as
well as facilitating green public procurement.
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Key Challenges
Sustainability value proposition. Cefic supports a full life-cycle
approach along social, environmental and economic criteria to
evaluate sustainability, along the guidelines developed at CEN for
bio-based materials. In the consumer-driven sectors, once
sustainability criteria are determined and the consumer is well
informed and accepts, market forces should decide what premiums
are paid and what volumes drive the choice to bio-based materials.
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