Green Chemicals & Materials – Unravelling the Myths

and Creating Opportunities

A panel discussion with Frost & Sullivan's leading

Chemicals & Materials analysts:
Robert Outram, Leo Dokos
Brian Balmer, Hari Ramasubramanian

29 October 2008
Focus Points

• Key Industry Trends

• Green Sourcing
• Green Processes / Sustainability
• White Biotechnology
• Legislation
• Case Studies / Examples

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 Key Industry Trends

Putting "Green" in Context

3
 Trends’ Impact on the Chemicals Industry

2007 – 2020

High Impact

Power
Customer
Recycling

Nanotechnology Biorenewables
White
Biotechnology Logistics
Excellence

Super Chemical Companies

Projected
Impact on the
Forwards/backwards Integration
Chemicals
Industry By-products/waste Environmental
management Legislation

Internet
Auctions

Low Impact

Low High
Certainty

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Materials Industry Trends

Performance Materials Market: Impact of Key Industry Trends

(Europe), 2008
10
Security
Energy-saving
Safety
Market Impact

Lifestyle
5

Differentiation Functionality

Innovation Sustainable
production

Expansion

0
0 5 Supply chain 10

Internal Impact

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Materials Industry Trends

Performance Materials Market: Impact of Key Industry Trends

(Europe), 2008
10
Security
Energy-saving
Safety
Market Impact

Lifestyle
5

Differentiation Functionality

Innovation Sustainable
production

Expansion

0
0 5 Supply chain 10

Internal Impact

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What is Green?

Sustainably Bio-enabling
Biodegradable Chemicals
Sourced
& Materials

•Detergents •Biorenewable building blocks •Oxy-biodegradable

•Bioplastics •Bioplastics plastic additives
•Natural fibre •Oleochemicals •Composites for wind
•Biofuels (?) turbines
•Recycled •Solar cell chemicals

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Biobased Sourcing is alternative to Naphtha Stream

Starch based polymers

Polyhydroxyalkanoates

CO2 1,3 Propanediol

Wheat Ethanol ethylene Vinyl chloride 1,2 Propanediol

maize C5 and
Starch
potato C6
Lactic Acid Acrylic acid
Sugars
Chiral compounds
3 HP Acrylic acid
Sugar Poly lactic acid
beet, PBS
sugarcane Succinic THF
acid
1,4 Butanediol

Polyether polyols
Sorbitol
Glycols

C5 Isoprene Polyisopropene Isosorbide polymer

and
Cellulose/ C6 Ethanol Ascorbic acid
LignoCellulose Sugars
Levullinic acid MeMbl Cellulose ethers,
Cellulose esters
and Viscose Fibres
Acrolein
Rapseed, Bio Diesel Current bulk productions
Soyseed Vegetable Oil
Allyl alcohol
Glycerol
Production on pilot scale
1,3 Propanediol
Natural oil
Polyols Research Scale
(NOP) Epoxy resins
Epichlorohydrin

1,2 propanediol
Polyurethanes

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Materials Industry Trends - Focus on Green

Thermoplastics
Biopolymers
Renewable materials Coating resins
Energy efficiency Natural fibres
Production Cleaner processes
Waste reduction / re-use
Worker safety

Top 10 Trends

Enabling tech. Energy efficiency

Safety
Security

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Materials Industry Trends - Focus on Green

Thermoplastics
Biopolymers
Renewable materials Coating resins
Energy efficiency Natural fibres
Production Cleaner processes
Waste reduction / re-use
Worker safety

Top 10 Trends Spec Chem as an enabler of green Materials:

• Chemtura Polybond improves blending of
wood fibres with PP in WPC
• DuPont Biomax Strong at 2wt% greatly
improves properties of PLA

Enabling tech. Energy efficiency

Safety
Security

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The chemical industry has cut its energy intensity
annually while reducing greenhouse gas emissions

Between 1990 and 2005 Between 1990 and 2005

Between 1990 and 2005
Between 1990 and 2005
production has increased
production has increased
Between 1990 and 2005 Between 1990 and 2005
energy consumption greenhouse gas emissions
energy consumption greenhouse gas emissions
remained flat declined
remained flat declined

Index
160

100 106

73

Source: Cefic Time

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Bio-sourcing materials - Can analogies be drawn with oil-
based chemistry?
Chart 5.1
High Performance Plastics Market: Chemistry of C9 Monomers for Polyamides (Europe), 2007

C9 Chemistry Commodity C6 Chemistry

Note the similarity of chemistries

Natural Fatty Acids Oleic Acid: used to generate diamines for both
niche C9 and commodity C6
polyamides
O

OH

Adipic Acid
O
OH O O HO
+ PA 6,9 OH
O HO OH O
Azelaic Acid

(old technology,
largely superseded) PA 6,6

Pelargonic acid by-

product:
Used in alkyd resins,
synthetic lubricant base PA 9,T H2N
oils and plasticizers H2N NH2 NH2
HMDA

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 Legislation

Lack of harmonisation?

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The lack of harmonisation in legislation and standards slows down the
momentum required for global adoption of green chemicals and processes

Voluntarily participation
Environment by the industry
Legislation

Not harmonised global

regulatory framework –
Ecology slow replacement of chemicals
under consideration

Economy

Legislation will play an increasingly important role in the future in alignment with a global
carbon footprint of materials and chemicals

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Europe is leading a global multifaceted effort to bring the chemicals
industry in the 21st century

GHS

Industry responsible for

Industry responsible for
protecting human health
protecting human health
and the environment
and the environment
Global Good Management
Global Good Management
of Chemicals & Materials
of Chemicals & Materials

Change of the responsibility
from public authorities to
industry in demonstrating the
safe manufacture and use of
chemicals
Restriction of the use of certain
hazardous substances in electrical
and electronic equipment
Identify hazardous chemicals and
inform users through standard
symbols and phrases on the
packaging labels and through
safety data sheets (SDS)

Things will speed up due to recently introduced legislation focusing on protecting the
environment as well as human health

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Is “bio” a polished term for “green” products?

Biofuels
State subsidies and EU directives
setting targets have been the
driving force for blending and
using biofuels. In the future …
Biolubricants
Although the last 10 years these
products have experienced a
market growth, this is due to a
slow replacement. Legislation
mandating their use exists only
in few European countries and
since 2008 in France as well.
Bioplastics
These PLA, PHA's and starch-based
polymers represent the future but
there is no specific legislation
regulating the amount of renewable
sourced material that needs to be
present in a plastic for it to be called
bioplastic. It is therefore open to
individual players in the market to
assess this particular point.

Is “bio” the next “green” for chemicals and materials?

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 FAQ’s & Frost & Sullivan Solutions

Case studies from Frost & Sullivan’s research

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Frequently Asked Questions

What opportunities could

What does "Green" there be for us in "energy
actually mean? efficient" buildings?

What are the different options to

enter the bioplastics market? Can you charge a
premium for a bio-
based product?
Is there any opportunity for
recycling of advanced
composites?

Do you know what opportunities What impact will the new Pyramid
there would be for [a new Technologies PLA plant have on
material] to improve the thermal the bioplastics market?
efficiency of buildings?

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 Frost on the Green Revolution
PLA Market: Volume Forecasts (Europe), 2003-2013

• Green Issues Coverage – Up to date 250.0

200.0

studies on green initiatives in our 150.0

kt
various end user segments
100.0

50.0
Constantly changing
• Examples of recent research market requires frequent
0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

tracking of the key trends

• Chinese Solar Power Markets Old New

• Wood Plastic Composites The European Bioplastics Market

• Renewable Chemicals Markets forecasts had to be revised just in one
year since we wrote the study, to account
• Bespoke consulting work on Green for the rapid changes that had taken
Markets place in the market in 2008

• Biofuels Market – Entry Strategies for

the Hungarian Market
• An Overview on Uses for Flare Gas
• Analyst Briefings
• Such as this one on Green initiatives in
the Chemicals & Materials Market
An analysis of the 170 billion cubic metres of
• White Papers flare gas wasted every year, and
identification of technologies that will create
• Environmental Sustainability Initiatives viable markets for this precious source of
in the Performance Materials Industry energy

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Conclusions

• Green initiatives must be self-funding - i.e. themselves sustainable

• There is no one thing that counts as "green." It can be anything from:

• emissions reduction or reduced usage of non-renewable raw materials
• ... to broader social responsibility considerations such as the worker's
working conditions

• Marketing is key
• ... But it is not just a marketing gimmick!

• Important to be proactive and do it before legislation forces you to

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For Additional Information

Steve Lee
Strategic Account Manager
Chemicals, Materials and Food, Asia Pacific
(65) 6890 0914
steve.lee@frost.com

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