What Role Does the Chemical Industry Play in the Circular Economy?

by BOSS Editorial | Published: May 24, 2023 | Updated: May 24, 2023 7:36 am

The chemical industry is central to building a circular economy, minimizing waste and reducing emissions. Due to its connections with many other industries and supply chains, it's uniquely positioned to promote adopting circular business practices. How can chemical companies build more sustainable supply chains and prepare for the future?

Every industry, supplier, business and consumer must chip in for a circular economy to work. Why is the chemical industry critical to the success of a circular supply chain? It comes down to the central role it plays in numerous other sectors. Everything from pharmaceuticals to utilities to CPGs relies on it.

As a result, chemical suppliers and manufacturers are links in many other industries’ and businesses’ supply chains. Building circular supply chains requires participation from the chemical industry to ensure success. Businesses that try to develop and support sustainable design and manufacturing can be key contributors to large-scale circularity.

How can the chemical industry help build a circular economy? There are several strategies businesses can use to make their product life cycles greener. These include finding sustainable sourcing, utilizing recycled equipment, changing design practices and implementing consumer-focused initiatives.

Collaboration is key across the board — a truly circular economy requires everyone in the supply chain to work together. This applies within businesses, too. Marketing and design are crucial for getting customers to participate in sustainability initiatives.

Evaluating raw materials sourcing is one of the first steps chemical businesses can take to build a circular economy. Companies should look for opportunities to get items and chemicals from renewable sources or even waste. This is good for the planet and saves money, reducing costs for end users.

For example, a business that uses methane in its manufacturing process has many options for obtaining it from sustainable sources. Methane is one of the main gases created by landfills and agricultural waste. Companies could capture methane gas from garbage using anaerobic digesters installed at a local dairy farm. This is a beneficial partnership for farms or landfills, as well, since it minimizes the GHG emissions their facilities produce.

This is a perfect example of the interconnectedness of any circular economy. Chemical industry businesses must be creative and consider unconventional sources for raw materials. Waste should always be seen as potentially valuable. This is particularly true when sourcing chemicals since waste processing often creates unused chemicals.

Chemical manufacturing equipment is another type of waste that's highly valuable in the circular economy. It's normal and necessary for manufacturers to upgrade their machinery, but used items should always be part of the conversation in this process.

Selling existing equipment can offset some of the upgrade costs. Additionally, used machinery may be a great way to save money on new installations. This is especially true for unique or niche items. Chemical manufacturing machinery may be more valuable if there is limited similar equipment on the market, whether new or used.

Even in cases where chemical manufacturing equipment is no longer fit for reusing, the parts and materials should be disposed of in a circular fashion. For example, metal components and electronics could go to specialty recycling centers to be broken down for reuse.

The chemical industry should purposefully design with reusability and recycling in mind to build a circular economy. This requires a shift from single-use products, which starts in the design phase. Businesses can use many strategies to ensure their products contribute to circularity.

For example, plastic waste can be reduced by designing products with more durable packaging. This allows end users to reuse it numerous times, even for the same product. Additional marketing and labeling to point out that boxes are reusable will also help.

The chemical industry can also shift to product-as-a-service business models. Leasing chemicals or selling services rather than products lets companies retain more control over the product life cycle. A service-based business model also helps customers save money by only using the amount of a product they need, reducing waste.

Consumer engagement can be challenging when trying to reduce plastic waste. Even if products are designed for reuse, people may still throw them away if they don't see enough value in keeping them. The chemical industry can help address this challenge by implementing refill or take-back programs.

One example of this that's already popular is refillable propane tanks. Millions of people regularly use propane tank refilling programs worldwide. It's convenient for consumers since it saves them the trouble of throwing away a big metal canister. It also saves propane manufacturers money and reduces waste.

Other businesses in the chemical industry, whether B2B or B2C, can use business models like this to help build a circular economy. The important part is incentivizing end users to participate in the refill or take-back program. For example, companies can offer discounts or rebates when consumers return packaging or leftover products to the manufacturer.

Since the chemical industry is at the crossroads of many other industries and supply chains, it can significantly reduce GHG emissions. This serves a dual purpose — minimizing environmental pollution and identifying opportunities for capturing and reusing chemicals.

Businesses can use carbon calculators, such as ESG audits and other carbon footprint tracking methods, to determine their emissions impact. This provides a starting point for addressing ways to reduce the amount of GHG output. The chemical industry is uniquely well-suited for doing this.

For example, a chemical company might notice in an ESG audit that one of its supply chain partners produces an unusually high amount of CO2. Scientific experts will have the knowledge needed to workshop solutions to that emissions challenge. They could identify changes to the manufacturing process that could cut back CO2 output or even invest in a carbon capture program.

Carbon capture is one of the chemical industry's biggest steps toward a circular economy. It is specifically designed to reduce environmental impact and store waste to be reused for valuable applications, such as CO2 for the food and beverage industry.

Circular economy business practices can help the chemical industry become more sustainable. This sector is at the epicenter of many other industries, creating the potential for a positive ripple effect from sustainable practices.

A shift in business models, strategic sourcing, conscious use of waste and emissions monitoring are among the first steps any chemical business can take to begin building a circular economy.

Emily Newton is the Editor-in-Chief of Revolutionized Magazine, an online publication that explores innovations in science and technology.

Category: Energy, Supply Chain