INSTITUTE FOR PROSPECTIVE TECHNOLOGICAL STUDIES

SEVILLE W.T.C., Isla de la Cartuja, s/n, E-41092 Sevilla

Innovation and cleaner technologies as a key to sustainable development: the case of the chemical industry

Authors: Peter Eder (IPTS) and Mahshid Sotoudeh (ITA)

January 2000

EUR 19055 EN

EUROPEAN COMMISSION

JOINT RESEARCH CENTRE

 ECSC-EEC-EAEC, Brussels • Luxembourg 2000 The views expressed in this study do not necessarily reflect those of the European Commission (EC). The European Commission retains copyright, but reproduction is authorised, except for commercial purposes, provided the source is acknowledged: neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information. Printed in Spain

Preface

Preface Sustainable development has been reinforced by the Amsterdam Treaty. The promotion of a harmonious, balanced and sustainable development of economic activities is referred to in Article 2 of the EC Treaty as a main task of the European Community. The EC Treaty establishes a close link between the promotion of sustainable development and economic, social and environmental concerns, endorsing the need for an integrated approach and efficient coordination between policy sectors and their policy objectives. The chemical industry is a key sector of the European economy. The European Union is the world’s largest producer of chemicals and has been at the forefront of technology development in this sector, which has given it an excellent competitive position. But although European chemical companies are still spending large amounts of money on research and development, the pace of innovation is slowing down, and Europe’s competitive edge is now seriously at risk. At the same time, the public and political concern about the potential environmental and health impacts of the chemical industry remains an issue of highest importance. The main political discussion currently focuses on the classification, labelling, assessment and restriction of chemicals. The different bodies of the European Union are concerned about the efficiency and effectiveness of the current legislation governing these issues, and are looking for a more efficient, integrated and coherent approach that harmonises the various legal instruments currently in force. This report goes beyond the subject of chemicals’ regulation and explores how the double challenge of environmental protection and guaranteeing competitiveness can be addressed through the support of innovation and cleaner technologies. This means it addresses two of the three pillars of sustainable development in an integrated way. The report consists of two parts: Part I, the general report, and Part II, two studies on more specific questions. The first specific study was carried out by the Institute of Technology Assessment of the Austrian Academy of Science. It identifies those problem areas within the production of chemicals that are conflicting with the principle of ecoefficiency and therefore need to be addressed by efforts aiming to improve the environmental performance of the sector. The second specific study is about an expert inquiry carried out by the IPTS to identify innovation options that have the potential to improve both the eco-efficiency and economic performance of the sector. The general report was written using the findings of both specific studies together with other relevant literature on the subject.

Contents

Contents PREFACE

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EXECUTIVE SUMMARY

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Innovation as a key to eco-efficiency and competitiveness Innovation options for cleaner technologies The role of public policy Especially promising innovation options

PART I — GENERAL REPORT Introduction The challenge of sustainable development for policy and industry The case of the chemical industry Innovation as a key to eco-efficiency and competitiveness The double dividend More and more radical innovation Innovation options for cleaner technologies Introduction General findings Specific findings The role of public policy Why should policy become active? Systemic, innovation-oriented policy for sustainable development Dedicated measures of science and technology policy Differences between subsectors Example: alternative synthetic pathways Understanding the implications of servicising Conclusions and outlook References

PART II — SPECIFIC STUDIES

7 8 8 9

12 13 13 14 16 16 18 19 19 21 21 24 24 25 28 29 30 32 32 34

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A — Problem areas with respect to eco-efficiency Goals and scope Technology-related problems Substances Products Core processes Periphery processes Underlying problems Conclusions: Starting points for eco-efficiency improvements Acknowledgements

37 38 39 39 42 45 50 51 54 64

B— Expert inquiry on innovation options for sustainable development Introduction Scope of the inquiry Size and target group The object The questions The ecological potential

65 66 66 66 67 67 68

Contents

The socioeconomic potential Realisation in 2010 Barriers Main results Response Expertise The ecological potential of the innovation options The socioeconomic potential of the innovation options Realisation in 2010 Barriers Matrix classification of innovation options Findings from the matrix classification Some more perspectives Additional innovation options suggested by respondents Private business and academia The viewpoint of respondents from the United States Check concerning expert bias Conclusions Appendix A: Detailed findings for selected innovation options Appendix B: List of further innovation options suggested by respondents (reproduction of original wording) Appendix C: Population of answers by qualified respondents in per cent

68 70 70 70 70 72 72 74 77 77 81 83 84 84 84 86 86 87 89 92 93

Executive summary

Executive summary The challenge of sustainable development for the chemical industry This report explores for the case of the chemical industry how good environmental performance and competitiveness can be pursued in an integrated way and what role innovation and clean technologies play for this purpose. The chemical industry has been chosen as the target sector because it has been one of the first sectors to be faced by the double challenge of environment and competitiveness and because of its special importance for the European industry. The European Union (EU) is the world’s largest producer of chemicals, well ahead of the United States and Japan. The EU’s chemical companies lead the field in exports in particular. The EU accounts for over 30 % of the world’s turnover of chemicals, but its share in world chemical exports is about 50 %. The chemical industry represents 15 % of investments by the European manufacturing industry and over 20 % of expenditure for industrial research and development. Its products and services are essential for satisfying the needs of mankind, which range from food and health via clothing, accommodation, communications and mobility to leisure activities. Therefore, it can make a decisive contribution to sustainable development. The chemical industry has, however, its own share of negative impacts on the environment and health through high consumption of raw materials and energy, the production of hazardous substances and wastes, emissions, and other risks. Examples of important problem areas are products which contain persistent organic pollutants such as polycyclic aromatic hydrocarbons (PAH) and organo-metallic compounds as well as ozone-depletion substances such as hydrochlorofluorocarbons (HCFCs). Another problem group are compounds with global warming potential (GWP) such as hydrofluorocarbons (HFCs) and carbon dioxide (CO2). The potential environmental and health impacts of the chemical industry are a source of important social and political concern. The environmental and health aspects have to be seen in the context of other challenges confronting Europe’s chemical industry, which is undergoing a structural change necessitated by the globalisation of markets. The global structure of this industry will have to adapt to the changing regional structure of the world chemical market. Exports are increasingly being replaced by local production in the countries where the European chemical industry used to sell its products. The strength of competitors is growing, particularly in the Asian and Pacific region. In order to face such competitive challenges, it is clear that strategies for sustainability must seek cost-effectiveness.

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Executive summary

Innovation as a key to eco-efficiency and competitiveness In the early days of the environmental debate, the prevailing view was that there was an inherent and fixed trade-off: ecology versus economy. On the one side of the trade-off are the social benefits that arise from strict environmental standards, and on the other are industry’s private costs for prevention and clean up — costs that lead to higher prices and reduced competitiveness. But companies operate in the real world of dynamic competition. They are constantly finding innovative solutions to all kinds of pressures — from competitors, customers, and regulators. Properly designed environmental standards can trigger innovations that lower the total cost of a product or improve its value. Such innovations allow companies to use a range of inputs more productively — from raw materials to energy and labour — thus offsetting the costs of improving the environmental impact and leading to what is often called ‘eco-efficiency’, which is obtained through innovation leading to process- and product-integrated environmental protection. Ultimately, this enhanced resource productivity makes companies more competitive, not less. Such integrated innovation can fall into two broad categories. The first is new technologies and approaches that minimise the cost of dealing with pollution once it occurs. In many cases, the key to this approach is recycling. The second and clearly more interesting and important type of integrated innovation addresses the root causes of pollution by improving resource productivity in the first place. Innovation offsets can take many forms, including more efficient utilisation of particular inputs, better product yields, better products, and alternative synthetic pathways. A large number of case studies show that frequently such innovation enhances resource productivity or eco-efficiency in such a way that the arising costs are more than compensated. Innovation to improve environmental performance and competitiveness has been a reality in the chemical industry for the last few decades. This is, however, no reason for complacency. In fact, the efforts to utilise the potential of innovation need to be multiplied for different reasons. First, sustainable development requires that the service or function obtained from the available raw materials, energy and land is increased radically over the medium to long term. Second, Europe is losing its competitive edge in the chemical sector, partly because the amount of innovation is on the decrease and advances in technology and innovative breakthroughs are becoming less frequent. With sustainable development being one of the decisive megatrends of global socioeconomic development, it seems clear that it will be of crucial importance for the European chemical industry to generate radical innovations leading to cleaner technologies in order to maintain or regain a leading edge in this sector.

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Executive summary

Innovation options for cleaner technologies While it is clear that enhanced ‘clean innovation’ is desirable, the question arises as to which kinds of innovation and cleaner technologies promise to bring a double dividend in terms of ecological and competitive improvements and how big is their potential. An expert inquiry on 36 innovation options carried out by the Institute for Prospective Technological Studies (IPTS) has shown that there are a number of these options for the chemical industry that promise great benefits in both ecological and economic terms but which need to be stimulated proactively to deliver these benefits. It confirms that there is quite a strong correlation between the ecological and economic potential of the innovation options investigated. Options that are promising from the ecological point of view are expected to become important in terms of market size if existing barriers can be overcome. They would also considerably increase the competitiveness of the European chemical industry. Several of the innovation options investigated have the potential for strong positive effects on the overall ecological impact of the sector. All of them have the potential to find at least a niche demand. Some of them even have the potential to find a market-wide demand or become a major source of European added value. However, for some of the most promising options, there are important barriers that prevent the utilisation of their full potential if business as usual is continued.

The role of public policy Following Porter and van der Linde (1995), there are several reasons why policy should become active for innovation leading to both ecological and competitive improvements. On the one hand, it needs to create pressures that motivate companies to innovate while, on the other hand, it has to increase the likelihood that product and process innovations in general will be environmentally friendly. Another important role is to level the playing field during the transition period to innovation-based environmental solutions. Furthermore, it is important to alert and educate companies about likely resource inefficiencies and potential areas for technological improvement and to create a demand for environmental improvement until companies and customers are better able to perceive and measure the resource inefficiencies of pollution. Furthermore, there are certain concrete problem areas hindering innovation that could be tackled directly by policy action. They comprise diverging national emission limits, insufficient guarantee of voluntary and responsible action by the industry, lack of credible information about environmental performance, and lack of long-term innovation goals, as well as high patent and environmental management costs for small firms. Generally, there is a clear need for a regulatory system that promotes improved environmental responses in a way that encourages industrial innovation and shapes it in the direction of greater resource efficiency and reduced environmental impact. Important elements of such a policy approach are (according to Porter and van der Linde, 1995):

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• • • • • • • •

to focus on outcomes and not specific technologies; to enact strict rather than lax regulation but to employ phase-in periods; to regulate as close to the end-user as practical, while encouraging upstream solutions; to use market incentives; to harmonise or converge regulation in associated fields; to develop regulations in sync with global competitors; to make the regulatory process more stable and predictable; to require industry participation in setting standards from the beginning.

Different instruments need to act in combination and should support innovation as a process taking account of the different phases of innovation. Such a framework should be characterised by a policy style that is based on dialogue and consensus. It requires a configuration of actors that favours horizontal and vertical policy integration and where the various regulatory authorities are closely networked (Blazejczak et al., 1999). An especially important element of a policy mix for cleaner technologies in the chemical industry is science and technology policy. While it is clear that support of curiositydriven research needs to be maintained, special support should be given to research that has sustainable development as a main aim. Existing support for research in sustainable chemistry could be intensified, and more policy measures should be taken to take advantage of the cumulative and self-reinforcing characteristics of technical change by guiding industry’s continual research for innovations and technologies towards those which are environmentally beneficial. New public mission-oriented projects to achieve sustainable development may strengthen such approaches. They would need to combine procurement such as direct research funding with other policies in order to achieve pervasive effects. Mechanisms need to be found through which it is possible to integrate and coordinate different policy areas such as science and technology policy, environmental policy, industrial policy, financial policy, trade policy, etc., for the pursuit of sustainable development. In doing so, it is of essential importance to give adequate consideration to all three pillars — ecological, economic and social — of sustainable development.

Especially promising innovation options The IPTS expert inquiry on innovation options for sustainable development drew attention to three options that have an especially high potential to enhance the environmental performance and competitiveness of the chemical industry: • • •

alternative synthetic pathways; heterogeneous catalysis; services instead of products.

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Executive summary

Alternative synthetic pathways (i.e. new reaction routes to obtain a certain product involving different processes, inputs and by-products) could be identified as an especially promising innovation option, although confronted with high barriers and relatively low expectations for realisation in the medium term in a business-as-usual scenario. One important barrier to alternative synthetic pathways is entrenchment. Economies have developed skills and sunk capital into particular solutions so that the cost (in terms of risk, time and capital) involved in moving to a fundamentally different approach becomes a serious deterrent. However, there is evidence that technological trajectories may be reversed as a result of changing circumstances, particularly if the array of forces that tended to sustain and reinforce it becomes fragmented and disrupted. This raises the possibility of reshaping existing technological trajectories through external pressures and incentives. Given the right external signals, there may be a reservoir of untapped innovation within industry, and processes, products and pathways that could be developed. Both an innovation-friendly environmental policy as well as a science and technology policy oriented towards sustainable development can play a key role in this sense. The main report specifies in more detail some strategies to follow. The ecological potential of heterogeneous catalysis was ranked as very high and its market potential is comparable to that of alternative synthetic pathways. This innovation option is regarded as especially important for competitiveness. In contrast to alternative synthetic pathways, heterogeneous catalysis is expected to find wide industrial application in 2010, even in a business-as-usual scenario. Finally, it was found that there is an increasing tendency for product manufacturers (especially within the chemical industry) to transform themselves into service-based enterprises that sell services instead of products. (It is important to understand that they continue to produce products. They are simply sold as part of a service.) White and Feng (1998) call this trend ‘servicising’ and explain that it has been a voluntary process, driven by market forces which require firms to deliver value through high-performance functional sales rather than physical goods. Procuring, training, testing, inventorying, regulatory compliance, point-of-use application, internal waste management, and disposal are some of the aspects of chemical management that most manufacturers would be pleased to outsource under the right (cost-saving) contractual arrangements. The environmental gain of such a strategy may be enormous but is largely unexplored. Such are the policy implications. Generally, more effort and basic studies are needed to get a deeper understanding of the ‘turning products into services’, which has also been identified as one of the main issues in the ‘Natural Resources and the Environment Panel report’ of the IPTS futures project.

Conclusions For both maintaining or improving its competitive position as well as meeting citizens’ expectations concerning environmental performance, it seems essential that the European chemical industry increases its innovative performance. There is a clear perspective that 10

Executive summary

much cleaner technologies comprising better processes, products, organisational settings and system solutions are actually possible if sufficient and adequate efforts are dedicated to realising them. It will be an important task for the chemical industry as well as for European and national policy to actively seek a better understanding of promising innovation options such as alternative synthetic pathways or turning products into services and to facilitate the utilisation of the opportunities they offer. Public policy can play two main roles in such a scenario. First, an appropriately designed innovation-friendly environmental policy (as outlined in this report) would create the necessary pressures that motivate companies to innovate and it would increase the likelihood that innovation driven by other factors will be environmentally friendly. Second, major breakthroughs may require science and technology policy to multiply the support given to promising new developments and technologies that may give rise to decisively cleaner technological regimes. This needs to be accompanied by targeted socioeconomic research to understand the mechanisms and implications of such change.

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Part I — General report

Part I — General report by Peter Eder (IPTS)

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Part I — General report

Introduction The challenge of sustainable development for policy and industry If we want to maintain or even increase wealth, and, in particular, meet the growing aspirations of the developing world, without escalating levels of environmental damage, far-reaching changes will be needed in our current system of industrial production and patterns of consumption. Weizäcker et al. (1996) argue that we need to increase energy and resource-use productivity by a factor of four, in order to double total wealth while simultaneously halving total resource use. Furthermore, toxic dispersion has to be controlled even stronger than today. This will necessitate profound changes to the technologies and production processes currently deployed and to the product mix offered by business and industry. Such changes need to consider the environmental, economic and social dimensions of sustainable development in an integrated way. To manage them is a considerable challenge given that the links between the economic, environmental and social dimensions are complex, possibly involving trade-offs between them, and longterm benefits may be contrasted by short-term contradictions. On the political level, sustainable development has been reinforced in the Treaty on European Union and the Treaty establishing the European Community, both modified by the Amsterdam Treaty. The promotion of a harmonious, balanced and sustainable development of economic activities is referred to in Article 2 of the EC Treaty as a main task of the European Community, together with the promotion of a high level of employment and social protection, a high degree of competitiveness, a high level of protection and improvement of the quality of the environment and the raising of the standard of living and quality of life. The EC Treaty establishes a close link between the promotion of sustainable development and economic, social and environmental concerns, endorsing the need for an integrated approach and efficient coordination between policy sectors and their policy objectives. Consequently, different policy areas should be integrated in such a way that they reinforce each other, rather than continuing separately with sometimes conflicting objectives. In this sense, increased interrelation between environment and industrial policies will promote environmental protection, competitiveness, innovation and employment. The efforts to achieve a high level of environmental protection may encourage industrial innovation and increase competitiveness. And it is clear that a highly competitive economy is better placed for pursuing a high level of environmental protection and promoting employment. The aim of this report is to explore for a specific industry sector how environmental performance and competitiveness can be addressed in an integrated manner, and which role innovation plays in this context. The chemical industry has been chosen as the sector of focus because it has been one of the first sectors to be faced by the double challenge of

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environment and competitiveness and due to its key role for European industry, as is pointed out in the next section.

The case of the chemical industry The European Union is the world’s largest producer of chemicals, well ahead of the United States and Japan. Within the EU, the chemical industry is the second largest sector of the manufacturing industry. The main area of activities consists of the chemical conversion of various base materials into substances and materials with new chemical and physical properties. The base materials used are oil, minerals, metals and some agricultural products. The main industrial customers are the automotive, construction and textiles industries. An important part of products is sold directly to final consumers. In many respects, the chemical industry is one of Europe’s key industries. Its annual turnover is currently more than EUR 350 billion, which is equivalent to between 3 and 4 % of western Europe’s total gross domestic product (GDP). The chemical industry represents 15 % of investments by the manufacturing industry and over 20 % of expenditure for industrial research and development. Some 1.6 million people are employed in the chemical industry, i.e. more than 6 % of employees in the manufacturing industry in the European Union. The EU’s chemical companies lead the field in exports in particular. The EU accounts for over 30 % of the world’s turnover of chemicals, but its share in world chemical exports is about 50 %. The most important country as far as the chemical industry is concerned is Germany, the location of some of the largest chemical companies in the world. About 8 % of companies account for 80 % of turnover. The 10 largest EU companies account for just about half of the industry’s turnover. Although 6 of the world’s 10 leading chemical companies are located in the European Union, the industry as a whole is characterised by small and medium-sized enterprises (SMEs). While big businesses dominate in the petrochemical industry, SMEs play a leading role in paints, speciality chemicals, cosmetics, pharmaceutical base materials and plastics processing. The chemical industry is a key industry whose products and services are essential for satisfying the needs of mankind, which range from food and health via clothing, accommodation, communications and mobility to leisure activities. It makes a major contribution towards solving problems arising in other areas of the economy, from the energy industry via information sciences and communications, the manufacture of capital goods and consumer goods to the environment and waste disposal. At the same time, it is a major employer, making a major contribution to added value and hence to the financing of public expenditure. The chemical industry can therefore make a decisive contribution to sustainable development (Committee on Economic and Monetary Affairs and Industrial Policy, 1997). The chemical industry has, however, its own share of negative impacts on the environment and health through high consumption of raw materials and energy, the production of hazardous substances and wastes, emissions, and other risks. Examples of 14

Part I — General report

important problem areas are products which contain persistent organic pollutants such as polycyclic aromatic hydrocarbons (PAH) and organo-metallic compounds as well as ozone-depletion substances such as hydrochlorofluorocarbons (HCFCs). Another problem group are compounds with global warming potential (GWP) such as hydrofluorocarbons (HFCs) and carbon dioxide (CO2). High energy and material intensity are general problems of organic and inorganic chemicals. The potential environmental and health impacts of the chemical industry are a source of social and political concern. This has led to the setting-up of a complex regulatory framework at the European, national and regional level that controls the processes and products of the chemical industry. EU regulation related to chemicals comprises: • • • •

the classification, labelling and packaging of hazardous substances (1992 framework directive on new substances (1) and 1993 regulation on existing substances (2)); the use and marketing of hazardous substances (1976 framework directive and subsequent supplementary directives); the import and export of chemicals (3); the placing of plant protection products on the market (4).

Other important European regulation affecting the chemical industry is: • • •

the integrated pollution prevention and control directive (the IPPC directive (5)); the EIA directive (6) on environmental impact assessments of large-scale industrial plants due to their resource depletion, pollution, and impacts on human health; or the Community eco-management and audit scheme (EMAS) which is a voluntary scheme designed to promote continuous improvements of environmental performance and compliance with all relevant regulatory requirements regarding the environment (7).

European regulation is complemented by extensive national environmental and health regulation that translates the societal demands for higher environmental performance into an imperative for the chemical industry. The environmental and health aspects have to be seen in the context of other challenges confronting Europe’s chemical industry, which is undergoing a structural change necessitated by the globalisation of markets. The global structure of this industry will have to adapt to the changing regional structure of the world chemical market. Exports are increasingly being replaced by local production in the countries where the European chemical industry used to sell its products. The strength of competitors is growing, (1) (2) (3) (4) (5) (6) (7)

Council Directive 92/32/EEC. Council Regulation (EEC) No 793/93. Council Regulation (EEC) No 2455/92. Council Directive 91/414/EEC. Council Directive 96/61/EC. Council Directive 97/11/EC. Council Regulation (EEC) No 1836/93.

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particularly in the Asian and Pacific region. (The European Commission has addressed the issue in its communication entitled ‘An industrial competitiveness policy for the European chemical industry: an example’ (8).) In order to face such competitive challenges, it is clear that strategies for sustainability must seek cost-effectiveness.

Innovation as a key to eco-efficiency and competitiveness The double dividend In the early days of the environmental debate, the prevailing view was that there was an inherent and fixed trade-off: ecology versus economy. On the one side of the trade-off are the social benefits that arise from strict environmental standards and on the other are industry’s private costs for prevention and clean up — costs that lead to higher prices and reduced competitiveness. However, as Porter and van der Linde (1995) point out, a static view of environmental regulation, in which everything except regulation is held constant, is incorrect. If technology, products, processes, and consumer needs were all fixed, as assumed in the static world of much economic theory, the conclusion that regulation must raise costs would be inevitable. But companies operate in the real world of dynamic competition. They are constantly finding innovative solutions to all kinds of pressures — from competitors, customers, and regulators. Properly designed environmental standards can trigger innovations that lower the total cost of a product or improve its value. Such innovations allow companies to use a range of inputs more productively — from raw materials to energy and labour — thus offsetting the costs of improving the environmental impact. Ultimately, this enhanced resource productivity makes companies more competitive, not less. More proactive firms have reacted to such a competitive reality, which is visible, for example, through the World Business Council for Sustainable Development (WBCSD). This association promotes the concept of ‘eco-efficiency’ as a strategy to create economic advantages and new products with enhanced customer value and reduced environmental impact: ‘Eco-efficiency is reached by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing environmental impacts and resource intensity throughout the life cycle, to a level at least in line with the earth’s estimated carrying capacity.’ (WBCSD and UNEP, no year. See also Box 1.)

(8)

COM(96) 0187 — C4-0273/96.

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Box 1: Success factors for eco-efficiency The World Business Council for Sustainable Development has identified seven success factors for eco-efficiency: • • • • • • •

reduce the material intensity of goods and services; reduce the energy intensity of goods and services; reduce toxic dispersion; enhance material recyclability; maximise sustainable use of renewable resources; reduce material durability; increase the service intensity of goods and services.

Source: WBCSD and UNEP (no year).

The chemical industry was one of the first sectors to be confronted with the need for enhanced environmental protection and has been faced with especially high environmental expenditures. For example, in western Germany the chemical sector’s share of the total industry’s gross added value was 8.6 % in 1988, while it had to carry 23 % of all environmental expenditures. Often it was claimed that in this industry the ecology–economy trade-off was particularly steep. This was probably true for typical end-of-pipe pollution control activities that were characteristic for the chemical industry’s reaction to the environmental challenge in the 1970s and to a large extent also in the 1980s. For example, in western Germany the gross fixed assets for environmental protection increased by 262 % from 1975 to 1989, while gross fixed assets in general increased by only around 50 % (Faber et al., 1994). The picture is, however, different for innovation leading to process- and productintegrated environmental protection. Such integrated innovation can fall into two broad categories. The first is new technologies and approaches that minimise the cost of dealing with pollution once it occurs. The key to this approach often lies in taking the resources embodied in the pollution and converting them into something of value. The second and clearly more interesting and important type of integrated innovation addresses the root causes of pollution by improving resource productivity in the first place. Innovation offsets can take many forms, including more efficient utilisation of particular inputs, better product yields, better products, and alternative synthetic pathways. There is a large number of case studies showing that frequently such innovation enhances resource productivity or eco-efficiency in such a way that the arising costs are more than compensated (9). Porter and van der Linde (1995) report that they observed this phenomenon during the course of their research for their study ‘The competitive advantage of nations’. They refer to an analysis of activities to prevent waste generation (9)

As claimed by Faber et al. (1994), the best way to analyse this question is to study individual production processes in detail. This is due to the fact that it is hardly possible to seize the spendings for production-integrated environmental protection on a statistical base because of large difficulties in distinguishing between capital goods for production and for pollution control.

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at 29 chemical plants, in which only 1 of 181 waste prevention activities resulted in a net cost increase. In a comprehensive study on production-integrated environmental protection in the chemical industry from the 1970s to the 1990s, Faber et al. (1994) investigated innovation that led to reduced environmental impacts of the processes related to 32 major chemical products and product classes. They conclude that in at least 40 % of all cases the profitability of production processes has been improved (see Box 2 for an example). A further collection of more than 30 examples of production-integrated environmental protection is presented in Christ (1999).

Box 2: Example of integrated environmental protection: production of polypropylene, Hoechst (taken from Faber et al., 1994) Polypropylene is a versatile polymer with a broad range of applications, such as packaging material or as shaped parts in mechanical engineering. In 1991, the production in western Germany was 531 000 tonnes worth DEM 970 million. Several processes are available for the production of polypropylene, such as suspension processes and heterogeneous poly-reaction. Hoechst AG, one of the most important producers of polypropylene, used a suspension process in hexane until 1990. This process caused important wastes. The solvent hexane could not be separated completely. The removal of catalyst from the product led to wastewater. When the air emission regulation (TA-Luft) was amended, the process could not be maintained without changes because the treatment of wastewaters emitted the solvent into the air. For this reason, Hoechst replaced the suspension process with a heterogeneous poly-reaction process (as a licence from Himont). The new process has several advantages: energy consumption is reduced by 75 %, no residual solvents are produced, and there is no need to remove catalyst from the product. The production of waste per 1 000 kg of polypropylene is reduced from 128 kg to 13 kg. The new process is now generally regarded as superior to the older one.

More and more radical innovation As has been explained, innovation to improve environmental performance and competitiveness has been a reality in the chemical industry for the last few decades. This is, however, no reason for complacency. In fact, the efforts to utilise the potential of innovation need to be multiplied for a number of reasons. On a global scale, increasing population and striving after more wealth create the need to use the limited natural resources much more efficiently. It has been shown (for example by Weizäcker et al., 1997) that the service or function obtained from the available raw materials, energy and land has to be increased by a factor of four or more over the medium to long term. How to transform basic materials into useful substances and materials and to use them to deliver services will be a central question in this context, and challenges the chemical industry. Furthermore, the resistance of the public to accept the production, use and release of substances that are toxic, hazardous or harmful to

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ecosystems is likely to increase even more and will put still stronger pressures on the chemical industry. In the past, the European chemical industry has had significant advantages in the field of technology. However, this competitive edge is now seriously at risk. Many technologies are now available all over the world, and they no longer afford any specific competitive advantages in Europe. One aggravating factor is that in some European countries the implementation of new technologies is very time-consuming because of institutional obstacles. Although European chemical companies are still spending large amounts of money on research and development, the amount of innovation is on the decrease. Advances in technology and innovative breakthroughs are becoming less frequent and optimising products and processes is of major importance. This is especially true for radical innovation, which is quite severe as radical innovations are a key factor for long-term business success in the chemical industry. In their analysis of the dynamics of technological innovation in this industry over the period 1930–85, Achilladelis et al. (1990) found out that there is a rather strong correlation between originality and market success of individual innovations, and that a radical innovation may ultimately prove to be more profitable for a company than an incremental innovation despite the high risks associated with its development. As a result of radical innovation, market success is a much stronger winner than profitability, because it leads to long-term advantages through the establishment of highly profitable corporate technological traditions. With sustainable development being one of the decisive megatrends of global socioeconomic development, it is clear that it will be of crucial importance for the European chemical industry to generate radical innovations leading to cleaner technologies in order to maintain or regain a leading edge in this sector.

Innovation options for cleaner technologies Introduction While it is clear that enhanced ‘clean innovation’ is desirable, the question arises as to which kinds of innovation and cleaner technologies promise to bring a double dividend in terms of ecological and competitive improvements and how big is their potential. To shed light on this issue, the IPTS has carried out an expert inquiry with the objective of identifying innovation options with the potential for improving the ecological and economic performance of the European chemical industry and finding starting points for policy actions to stimulate such innovation. In the following, the main conclusions of this inquiry are presented. The complete study is presented as Part II.B of this report.

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The expert inquiry was carried out by means of a questionnaire that was sent out to 126 potential experts. ‘Potential experts’ were people who had shown special interest in the subject of ‘sustainable chemistry’ or ‘green chemistry’ by participating in a workshop organised by the Organisation for Economic Cooperation and Development (OECD) in October 1998, or because they had published relevant work on issues such as sustainable/green chemistry, cleaner production, clean technologies, eco-efficiency or similar subjects. The actual expertise of the respondents was evaluated by asking them to auto-assess it for each of the investigated innovation options when completing the questionnaire. Although the inquiry wanted to develop perspectives especially for the European chemical industry, it was decided to include in the inquiry experts from outside Europe. This was done in order to cover forthcoming developments that may be much more relevant for the United States or Japan at the moment but which may also become relevant for Europe. Completed questionnaires were returned by 72 experts mainly from the areas of public and private research and from corporate strategy. The questionnaire consisted of 13 questions on 36 innovation options. The 36 innovation options were grouped into 9 categories: • • • • • • • • •

system changes (2 options); alternative raw materials (4 options); alternative reagents (1 option); alternatives to solvents (4 options); process engineering (2 options); catalysis (4 options); separation/recycling (3 options); alternative products (11 options); others (5 options).

The innovation options were chosen and defined based on a literature study on problematic areas with respect to ecological efficiency and on technologies that are claimed by their proponents to have the potential for eco-efficiency improvements. The ‘alternative products’ category, which comprises the most important product classes of the chemical industry, was included to screen over the entire range of the industry’s production. Questions were asked on the following topics: • • • •

ecological potential; socioeconomic potential (potential market size, competitiveness effects, employment effects); expected realisation in 2010; seven types of innovation barriers.

For the questions on the ecological potential and on the socioeconomic potential, the addressees were asked to assume that optimal frame conditions would exist for the development of innovation options, so that their technological potential will be fully 20

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exploited. The purpose of this part of the inquiry was to get the experts’ opinion on the effects of a full development of innovation options. The question on expected realisation in 2010, on the other hand, aimed to find out the perception of what is most likely to happen in a business-as-usual scenario.

General findings The results of the inquiry confirm that there is quite a strong correlation between the ecological and economic potential of the innovation options investigated. Options that are promising from the ecological point of view are expected to become important in terms of market size if existing barriers can be overcome. They would also considerably increase the competitiveness of the European chemical industry. More specifically, it turned out that experts do not expect negative ecological effects for any of the innovation options investigated. Several of the innovation options investigated have the potential for strong positive effects on the overall ecological impact of Europe’s chemical industry. All of them have the potential to find at least a niche demand. Some of them even have the potential to find a market-wide demand or become a major source of European added value. However, for some of the most promising options, there are important barriers that prevent the utilisation of their full potential if business as usual is continued. Consistently, experts believe that they will not find wide realisation in a business-as-usual scenario, even if their market potential is high.

Specific findings Of the innovation options investigated, there are three which have an especially high potential to enhance the environmental performance and competitiveness of the chemical industry: • • •

alternative synthetic pathways; heterogeneous catalysis; services instead of products.

Alternative synthetic pathways were found to be the most promising innovation option to improve the eco-efficiency of individual processes as well as the environmental performance of the whole European chemical industry (see Box 3 for an explanatory example). It has the potential to find a market demand and even to become a major source of European added value and would bring a strong positive effect and be a huge advantage for the competitiveness of the European chemical industry. Technological feasibility and economic viability are above average when compared with other options. However, there are important barriers to the development and diffusion of this innovation option. In a business-as-usual scenario, alternative synthetic pathways are not therefore foreseen to be realised in industrial plants until 2010. The barriers, however, would to a large extent be susceptible to policy action. The highest ranked barriers are a lack of

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incentives/pressures to be environmentally friendly, a lack of research funds, and structural/industrial/commercial barriers.

Box 3: Alternative synthetic pathways — an example The following invention by Flexsys America LP (formerly Monsanto’s Rubber Chemicals Division) won the 1998 Alternative Synthetic Pathways Award of the US Presidential Green Chemistry Challenge. The 10 description is taken from a US EPA website ( ).

Elimination of chlorine in the synthesis of 4-aminodiphenylamine: a new process which utilises nucleophilic aromatic substitution for hydrogen The development of new environmentally favourable routes for the production of chemical intermediates and products is an area of considerable interest to the chemical industry. Recently, the use of chlorine in largescale chemical syntheses has come under intense scrutiny. Solutia, Inc. (formerly Monsanto Chemical Company), one of the world’s largest producers of chlorinated aromatics, has funded research over the years to explore alternative synthetic reactions for manufacturing processes that do not require the use of chlorine. It was clear that replacing chlorine in a process would require the discovery of new atomically efficient chemical reactions. Ultimately, it was Monsanto’s goal to incorporate fundamentally new chemical reactions into innovative processes that would focus on the elimination of waste at the source. In view of these emerging requirements, Monsanto’s Rubber Chemicals Division (now Flexsys), in collaboration with Monsanto Corporate Research, began to explore new routes to a variety of aromatic amines which would not rely on the use of halogenated intermediates or reagents. Of particular interest was the identification of novel synthetic strategies to 4-aminodiphenylamine (4-ADPA) a key intermediate in the rubber chemicals family of antidegradants. The total world volume of antidegradants based on 4-ADPA and related materials is approximately 300 million lb/year, of which Flexsys is the world’s largest producer (Flexsys is a joint venture of Monsanto’s and Akzo Nobel’s rubber chemicals operations). Flexsys’s current process to 4-ADPA is based on the chlorination of benzene. Since none of the chlorine used in the process ultimately resides in the final product, the pounds of waste generated in the process per pound of product produced from the process are highly unfavourable. A significant portion of the waste is in the form of an aqueous stream which contains high levels of inorganic salts contaminated with organics that are difficult and expensive to treat. Furthermore, the process also requires the storage and handling of large quantities of chlorine gas. Flexsys found a solution to this problem in a class of reactions known as nucleophilic aromatic substitution for hydrogen (NASH). Through a series of experiments designed to probe the mechanism of NASH reactions, Flexsys realised a breakthrough in the understanding of this chemistry that has led to the development of a new process to 4-ADPA that utilises the base-promoted, direct coupling of aniline and nitrobenzene. The environmental benefits of this process are significant and include a dramatic reduction in waste generated. In comparison with the process traditionally used to synthesise 4-ADPA, the Flexsys process generates 74 % less organic waste, 99 % less inorganic waste, and 97 % less wastewater. In global terms, if just 30 % of the world’s capacity to produce 4-ADPA and related materials were converted to the Flexsys process, 74 million lb/year less chemical waste and 1.4 billion lb/year less wastewater would be generated. The discovery of the new route to 4-ADPA and the elucidation of the mechanism of the reaction between aniline and nitrobenzene have been recognised throughout the scientific community as a breakthrough in the area of nucleophilic aromatic substitution chemistry. This new process for the production of 4-ADPA has achieved the goal of waste elimination at the source via the discovery of new chemical reactions which can be implemented into innovative and environmentally safe chemical processes.

(10)

http://www.epa.gov/opptintr/greenchemistry/aspa98.htm

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The ecological potential of heterogeneous catalysis (see Box 4) is ranked as second highest and its market potential is comparable to that of alternative synthetic pathways. There is an especially high coincidence of expert opinions that it would bring a strong positive effect and a huge competitive advantage to the European chemical industry. In contrast to alternative synthetic pathways, heterogeneous catalysis is expected to find wide industrial application in 2010, even in a business-as-usual scenario. The supply of services instead of products is the third innovation option with the potential of strong positive effects on the overall ecological impact of the European chemical industry (see Box 5 for more details). It has similarly good market potential as alternative synthetic pathways and heterogeneous catalysis. Of all the innovation options, it ranks highest as regards employment effects. Generally, barriers to its realisation are seen as relatively low, and neither technological feasibility nor economic viability is a significant barrier. However, this option is faced with important structural, industrial and commercial barriers and with a lack of respective education and skills. In a business-asusual scenario, it is expected that this innovation option will become widely applied in industry in 2010. The following options also seem promising from both the ecological and economic point of view, although to a lesser extent than the three priority innovation options discussed above: solvent-free reactions, solid phase/state reactions; biocatalysis; new solvents and cleaning agents; new refrigerants; and new detergents and surfactants.

Box 4: Catalysis in general and heterogeneous catalysis (11) Whereas 80 % of basic chemicals are made catalytically (meaning all types of catalysis), fewer than 20 % of fine chemicals are manufactured using a catalytic process. This industry segment is growing at a rate which is higher than the industry average (+ 10 % for some of the pharmaceutical intermediates), while on the other hand the production processes used are still mainly based on scale up from laboratory synthesis. There is a clear gap in the use of catalysis that is not solely due to the lack of available catalytic processes. Replacing stoichiometric processes by catalytic ones will have a tremendous impact on the reduction of byproducts, often produced in the synthesis of fine chemicals, sometimes exceeding the product by some orders of magnitude. Application of heterogeneous catalysis to fine chemical production generally requires liquid phase processes and should very frequently be compatible with relatively low temperature operation, since reactants and products have in most cases a relatively high molecular weight and are thermally unstable. But also many bulk chemicals are produced by catalytic processes in the liquid phase, such as pyrolysis gas hydrogenation, nitrile hydrogenation (to amines), reductive aminations (aldehydes to amines), etc. So, there is an increasing number of applications in the liquid phase. Most of our knowledge of heterogeneous catalysis, however, was developed for gas phase processes. And a lot of basic questions remain to be answered.

(11)

Taken from NICE — a network for industrial catalysis in Europe, ‘Gaps and needs and opportunities in industrial catalysis’ (http://www.dechema.de/englisch/fue/nice/pages/gaps.pdf).

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Box 5: Servicising According to White and Feng (1998), there is an increasing tendency for product manufacturers to transform themselves into service-based enterprises. They call this trend ‘servicising’ and explain that it has been a voluntary process, driven by market forces which require firms to deliver value through high-performance functional sales rather than physical goods. As a result, more value is obtained with less material; in other words eco-efficiency is increased. Servicising firms are different from service firms in that they are enterprises formerly rooted in product manufacturing which are evolving into service providers. They range from the incipient case of a product manufacturer which supplements its traditional product lines with various types of extended warranties to the intermediate case of a firm which takes back its products upon termination of their useful life. Moving still further along this progression is the fully servicised firm, one that still makes physical products but subordinates such products within a new business strategy that sells customers function rather than physical input. In this mature case, the firm redefines itself from a chemical company to a chemical services provider. White and Feng (1998) report that there are strong signs that in the chemical industry (at least in the United States) servicing is moving forward. The IPTS expert inquiry also identified ‘services instead of products’ as an especially promising innovation option. Firms such as Olin (microelectronics materials), Castrol, Ashland, Henkel and Dow have established chemical management service programmes. Here, analogous to the case of industrial and household customers of information-processing services, industrial chemical users see chemical use as a necessary but peripheral aspect of their manufacturing operations. Procuring, training, testing, inventorying, regulatory compliance, point-of-use application, and internal waste management and disposal are some of the aspects of chemical management that most manufacturers would be pleased to outsource under the right (cost-saving) contractual arrangements. Emerging chemical management service markets have led these firms to offer packages of services with unit-pricing structures — for example per door panel coated, per wafer cleaned — that reward reduced, rather than increased, chemical use. Through gain-sharing provisions, both chemical supplier and user benefit from technological innovations that reduce operating costs. These arrangements, like their computer counterparts, shift ownership of the material back to the supplier, thereby creating incentives for improved materials management, maximum recovery and recycling, and minimum losses during handling, storage, and use.

The role of public policy Why should policy become active? The chemical industry is a highly technology-based sector and to a large extent it is true that it is capable of developing and/or implementing clean technologies itself. If this is so and if the advantages of clean innovation are so clear, why can business not be relied on to take them into account anyway and enhance clean innovation autonomously? One factor is that regulation needs to translate long-term societal goals into factors that are relevant for corporate decision-making which is often short-term. Second, as Porter and van der Linde (1995) point out, it would make a false assumption about competitive realities that all profitable opportunities for innovation have already been discovered, that all managers have perfect information about them, and that organisational incentives are aligned with innovating. In fact, in the real world, managers often have highly incomplete information and limited time and attention. We are in a transitional phase of industrial history in which companies are still inexperienced in handling environmental issues 24

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creatively. Porter and van der Linde give six major reasons why regulation is needed for innovation leading to both ecological and competitive improvements. • •

• • • •

To create pressures that motivate companies to innovate. It has been shown that outside pressure plays an important role in overcoming organisational inertia and fostering creative thinking. To improve environmental quality in cases in which innovation and the resulting improvements in resource productivity do not completely offset the cost of compliance, or in which it takes time for learning effects to reduce the overall cost of innovative solutions. To alert and educate companies about likely resource inefficiencies and potential areas for technological improvement (although government cannot know better than companies how to address them). To increase the likelihood that product innovations and process innovations in general will be environmentally friendly. To create demand for environmental improvement until companies and customers are better able to perceive and measure the resource inefficiencies of pollution. To level the playing field during the transition period to innovation-based environmental solutions, while avoiding that one company can gain position by avoiding environmental investments. Regulation provides a buffer for innovative companies until new technologies are proven and the effects of learning can reduce technological costs.

Furthermore, there are certain concrete problem areas hindering innovation that could be tackled directly by policy action. They comprise diverging national emission limits, insufficient guarantee of voluntary and responsible action by the industry, lack of credible information about environmental performance, and lack of long-term innovation goals, as well as high patent and environmental management costs for small firms (see Part II.A of this report). In the following, two strategic policy approaches are outlined that can contribute to enhancing innovation geared towards cleaner technologies in the chemical industry. The first concerns a systemic, innovation-oriented environmental policy, and the second concerns dedicated measures of science and technology policy. While these two approaches address the issue from different directions, they both address the problem by widening the scope of traditional policy areas. Logically they should not be understood as being isolated, but they are partly overlapping and should be deployed in a coordinated way.

Systemic, innovation-oriented policy for sustainable development Regulation is one of the main influences on the environmental and related behaviour of firms. With respect to innovation, it can play a positive or negative role. A number of

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studies have suggested that some of our existing models of environmental regulation may not encourage industry to take risks with the kind of technological innovation that could lead, eventually, to fundamentally cleaner solutions. For example, regulatory pressures for immediate compliance may force firms to seek short-term responses, which may take the form of known technological solutions, such as end-of-pipe waste treatment plants. Another problem occurs if ‘technology-forcing’ regulation requires improvements in a context where proven solutions do not yet exist or are not widely agreed. Such a situation leads to uncertainties regarding both the technical feasibility of compliance and the costs, and will be associated with conflict between regulators and industry. On the other hand, there are win–win scenarios in which regulation enables better coupling between environmental protection and resource use. In a context where organisational inertia and other factors constitute a barrier to innovation within firms, regulatory pressure might be an important stimulus for change. In such a case, regulation that stimulates innovation geared towards improving resource efficiency can result in improved industrial competitiveness. In order to make use of the double dividend, there is a need for a regulatory system that promotes improved environmental responses in a way which encourages industrial innovation and shapes it in the direction of greater resource efficiency and reduced environmental impact. Properly designed regulation should, therefore, stimulate and harness the firm’s capacity for innovation encouraging it to search for and implement cleaner solutions. This should build on existing tendencies within industry and pay attention to ongoing processes of innovation (Clayton, Klemmensen and Williams, 1999). Porter and van der Linde (1995) suggest the following principles of regulatory design that will promote innovation, resource productivity (eco-efficiency), and competitiveness: • • •

• • • • • •

Focus on outcomes, not technologies. Enact strict rather than lax regulation. Companies can handle lax regulation incrementally, often with end-of-pipe or secondary treatment solutions. Regulation, therefore, needs to be stringent enough to provoke real innovation. Employ phase-in periods. Ample but well-defined phase-in periods tied to industry– capital–investment cycles will allow companies to develop innovative resourcesaving technologies rather than force them to implement expensive solutions hastily, merely patching over problems. Regulate as close to the end-user as practical, while encouraging upstream solutions. This will normally allow more flexibility for innovation in the end product and in all the production and distribution stages. Use marker incentives. Harmonise or converge regulation in associated fields (for example safety and environmental regulations related to refrigerator cooling agents). Develop regulations in sync with other countries (to avoid possible competitive disadvantages) or slightly ahead of them (to allow early mover advantages). Make the regulatory process more stable and predictable. Require industry participation in setting standards from the beginning.

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• •

Develop strong technical capabilities among the regulators. Minimise the time and resources consumed in the regulatory process itself (such as licensing or registration).

Blazejczak et al. (1999) point out as further important factors that within an innovationfriendly policy framework different instruments need to act in combination and should support innovation as a process taking account of the different phases of innovation. Such a framework should be characterised by a policy style that is based on dialogue and consensus. It requires a configuration of actors that favours horizontal and vertical policy integration and where the various regulatory authorities are closely networked. In fact, a coordinated mix of different policy instruments can probably give key support to innovating towards cleaner technologies. This is supported by the findings of Achilladelis et al. (1990), who have investigated the driving forces for radical innovation by asking large US and European chemical companies to rank a number of driving forces concerning their relative importance in influencing their management to undertake the R & D projects which led to the seven most original innovations they introduced over the period 1950–80. They found that the two most important driving forces are ‘in-house expertise’ and ‘market demand’. They are followed by ‘science and technology advances’ and ‘raw materials’ (availability or scarcity of feedstocks). ‘Competition’ came fifth and was followed by ‘governmental legislation’ and ‘societal needs’. Most of these factors can be addressed directly by policy instruments. Raw material prices are influenced by subsidies and taxes, science and technology advances very much depend on public S & T policy, and market demand can partly be shaped through green public procurement. Finally, there is the possibility of direct environmental regulation through government legislation. Coordination is needed between these instruments but also with other factors. Take, for example, investment cycles. Their influence on the feasibility of radical environmentally sound innovation is considerable. They provide critically important windows of opportunity for environmental improvements. Times of expansion are also opportune points at which to include environmental investments. To direct such investments towards cleaner technology requires that the firm is prepared and ready to seize the opportunity, and that there are no overwhelming pressures to install end-of-pipe devices (Duffy and Ryan, 1999). An example of a European policy initiative that intends to follow a systemic, integrated approach is integrated product policy. It could have a very important positive effect on innovation leading to cleaner technologies if designed according to the principles described above. Furthermore, as the IPTS expert inquiry has shown, it may be a wise strategy to include services within the concept of such a policy. While the traditional core competency of the chemical industry is clearly to supply products and leave the application of the products to the customer, it may be a strategic ‘soft’ innovation to integrate the business activities of producing and using chemicals. It would be very useful to look at the sectoral implications of an integrated product policy for the chemical industry, addressing the various aspects of innovation-friendly innovation.

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Dedicated measures of science and technology policy A key element of an innovation-oriented policy mix for sustainable development is science and technology policy. Soete (1998) highlights the importance of considering sustainable development in science and technology policy in a market economy, which selects products and processes not on the basis of environmental criteria but on the basis of profitability. There is the need to develop policies that can take advantage of the cumulative and self-reinforcing characteristics of technical change by guiding industry’s continual search for innovations and technologies towards those which are environmentally beneficial. Ideally, the process would be self-reinforcing in that additional searches for new technical solutions would follow within the same technical pathway. The experience gained from new technologies in the first few situations where this technology is economically competitive should lead to learning effects that gradually improve the cost-effectiveness and thus also the competitiveness of the technology. Increasing competitiveness should then attract additional investment in the technology, leading to further technical improvements and cost reductions and a higher number of economically feasible applications. European science and technology policies have already been oriented towards sustainable development and competitiveness. The fifth framework programme for research and technological development and demonstration contains a thematic programme on competitive and sustainable growth. One of the objectives within this thematic programme is sustainable chemistry (see Box 6 for a description of this objective).

Box 6: Objective 5.3 within the thematic programme on competitive and sustainable growth: sustainable chemistry RTD in this area is focused on generic chemical issues, advanced polymers, fine or speciality chemicals, and solid state chemistry. The overall aim is to achieve sustainable chemistry based on clean processing routes and efficient use of resources, including the use of renewable raw materials, for example for the production of organic chemicals. Research is also needed on higher added value and safer materials (e.g. ‘smart’, multifunctional, packaging materials). RTD tasks should include functional materials for chemical engineering, including catalysts and materials for separation technologies, as well as formulation engineering and new synthesis routes, supramolecular chemistry and chemistry for new materials, including colloidal systems and nanostructured materials.

Such approaches could be further strengthened to arrive at what Soete (1998) calls new big public mission-oriented projects to achieve environmental goals, similar to the nuclear, defence and aerospace programmes of the 1950s and 1960s. While the earlier projects aimed at the development of radically new technologies through government procurement that was largely isolated from the rest of the economy, the new missionoriented environmental projects will need to combine procurement with many other

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policies in order to have pervasive effects on the entire structure of production and consumption within the economy. Again, integration with other policy areas would be an essential new feature, as the pervasive character of new projects calls for a more systemic approach to policy, such as coordination between science and technology policy, industrial policy, direct environmental regulation and economic instruments. A green or sustainable chemistry award to recognise outstanding inventions or innovations that lead to cleaner chemical technologies may be a useful tool in this context. (A prestigious award in this sense has existed in the United States for several years (12) and a similar initiative is currently being established by European institutions and chemical societies.) Kemp et al. (1998) suggest strategic niche management as a further concept to support the shift to using more sustainable technologies. The idea is to create temporary protected spaces for more sustainable technologies. Strategic niche management is defined as ‘the creation, development and controlled phase-out of protected spaces for the development and use of promising technologies by means of experimentation, with the aim of: (1) learning about the desirability of the new technology, and (2) enhancing the further development and the rate of application of the new technology’. More specifically, the aims of strategic niche management are: • • •

•

to articulate the changes in technology and the institutional framework that are necessary for the economic success of new technologies; to learn more about the technical and economic feasibility and environmental gains of different technology options; to stimulate the further development of these technologies, to achieve cost efficiency in mass production, to promote the development of complementary technologies and skills and to stimulate changes in social organisation that are important to the wider diffusion of the new technologies; to build a constituency behind a product — of firms, researchers, and public authorities — whose semi-coordinated actions are necessary to bring about a substantial shift in interconnected technologies and practices.

Differences between subsectors While important insight into the role of innovation and cleaner technologies for the sustainable development of the chemical industry can be obtained from an analysis in the general context of this industry, there is the need for more differentiated analysis related to its individual subsectors. In fact, it may be worthwhile to dedicate subsequent studies to this subject. The report of a European project (funded by the Directorate-General for Research under the European Commission’s environment programme, ‘Socioeconomic research on the environment’) entitled ‘Implementation of cleaner technologies: a crossregional comparison’ could serve as a starting point. Based on that project, Clayton, Spinardi and Williams (1999) indicate some of the basic differences between subsectors. (12)

The annual Presidential Green (http://www.epa.gov/opptintr/greenchemistry/presgcc.htm).

Chemistry

Challenge

Awards

Programme

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They argue that in those parts of the chemical industry in which resource efficiency is a major competitive feature (refinery sector, petrochemical sector) the search to improve resource efficiency may be deeply institutionalised in expertise and decision-making practices. Here the role of regulation should be to enforce such pressures and to augment and support the processes already under way. At the same time, a key policy concern might be to ensure that regulatory requirements did not inhibit, or divert resources away from, cleaner responses, but were integrated with the existing dynamism of the industry. Given the potentially high costs of developing cleaner technologies, there might, furthermore, be a role for public initiatives to share the costs and risks of research and development, by promoting links with public sector research, collaboration between firms, or even through public subsidies. The situation is different in the pharmaceutical sector, as it is an industry with very high-value products, in which resource efficiency is a less important competitive factor than product quality. In this case, economic pressures may not be sufficient to motivate cleaner responses and there will probably be the need for the regulatory environment to favour cleaner technologies. A special problem in the pharmaceutical industry is that strict product safety regulations and the need to avoid delays in getting production going given the limited period of exploitation of patented drugs may often inhibit process improvement.

Example: alternative synthetic pathways The IPTS expert inquiry identified alternative synthetic pathways as an especially promising innovation option, although confronted with high barriers and relatively low expectations for realisation in the medium term in a business-as-usual scenario. Here some policy implications related to this innovation option are developed in the light of the considerations presented so far. Following Clayton, Ryan and Williams (1999), one important barrier to alternative synthetic pathways is entrenchment. Economies have developed skills and sunk capital into particular solutions so that the cost (in terms of risk, time and capital) involved in moving to a fundamentally different approach becomes a serious deterrent. This is aggravated for organic chemistry, which is moulded into a complex system of coupled production. Relatively major perturbations may be required to shake an industry out of a deeply established mode. However, there is evidence that technological trajectories may be reversed as a result of changing circumstances, particularly if the array of forces that tended to sustain and reinforce it becomes fragmented and disrupted. This raises the possibility of reshaping existing technological trajectories through external pressures and incentives. Given the right external signals, there may be a reservoir of untapped innovation within industry, and processes, products and pathways that could be developed. Both an innovation-friendly environmental policy as well as a science and technology policy oriented towards sustainable development can play a key role in this sense. In the petrochemical and fine chemical sectors, synthetic pathways and technological regimes, in general, are materialised in the form of large-scale, capital-intensive 30

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operations, which makes them very susceptible to technology lock-in and at the same time require long planning horizons. High fixed capital costs and the inherent delay in significant plant upgrades or replacements may create a significant time lag before regulatory and market pressures are fully reflected in plant design and new technologies. These considerations apply particularly to the large-scale production end of the chemical sectors: oil refineries and petrochemicals. The enormous investment in fixed plant required in the refinery sector obliges firms to plan 10 or more years ahead. In fact, the more sophisticated of these firms are already incorporating environmental factors into their long-term planning, particularly regarding anticipated regulatory change affecting product markets and future compliance requirements, which may affect their ability to ‘stay in business’ (Clayton, Spinardi and Williams, 1999). This needs to be taken into account by environmental policy. Environmental regulation should be increasingly stringent over a long-term time frame, to allow environmental improvements to be integrated into commercial planning. To encourage firms to pursue the potentially greater improvements in environmental performance available from changing main reaction pathways, the regulatory environment needs to combine powerful incentives as well as predictability over time. Such a policy requires that both industry and policy have access to long-term planning instruments which allow the assessment of technologies in the context of long-term sustainable development. The uncertain character of the future implies considerable difficulties and there is the need to develop adequate procedures for dealing with this issue. Scenario analysis oriented towards sustainable development will certainly play an important role in this context. Where the search for radical improvements in technologies involves potentially large costs and uncertain outcomes, public sector science and technology initiatives may be needed to share the costs and risks. Concerning alternative synthetic pathways, the following three-step procedure seems appropriate: 1. Collection of cases studies of alternative synthetic pathways with detailed descriptions of the related technological systems, the potential ecological and economic advantages of these pathways, and the barriers to their realisation. 2. Carry out for a selection of especially promising cases an integrated systems analysis that assesses the new technology as to their sustainability from the longer-term perspective of one or two decades. Such an analysis would involve a scenario analysis considering the most important global and European drivers and trends, especially also different development options of the main public policy areas. It would widen the understanding of how sustainable development can be integrated into different policy areas if innovation is seen as a key facilitator of sustainable development, and would allow the identification of alternative technology systems to be stimulated actively in the third stage. Examples of cases that might be subject to such an analysis would be the production of substances and materials related to an emerging

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hydrogen-based energy system, or the extended use of renewable raw materials for the production of energy, substances and materials (13). 3. Stimulate actively the development and implementation of new technology systems corresponding to promising alternative synthetic pathways. This could be done, for example, through strategic niche management or new mission-oriented projects, special R & D focuses, etc.

Understanding the implications of servicising Until now, market forces have been the main drivers for servicising (the tendency for product manufacturers to transform themselves into service-based enterprises). The environmental gain of such a strategy may be enormous but is largely unexplored. Such are the policy implications. Therefore, the IPTS is participating in an ongoing research project that investigates eco-efficient producer services and their implications for policymaking (14). Generally, more efforts and basic studies are needed to get a deeper understanding of the ‘turning products into services’, which has also been identified as one of the main issues in the ‘Natural Resources and the Environment Panel report’ of the IPTS futures project (Sørup and Gameson, 1999).

Conclusions and outlook Sustainable development requires policy to stimulate the enhanced uptake of cleaner technologies by the chemical industry, at the same time taking into account the fact that it is to a large extent within the industry’s own responsibility how it develops cleaner modes of production and what their exact nature will be. Environmental policy can play an important role in such a context and can best serve this purpose if it is designed in an innovation-friendly way. This means, on the one hand, that it needs to create pressures that motivate companies to innovate while, on the other hand, it has to increase the likelihood that product and process innovations in general will be environmentally friendly. Another important role is to level the playing field during the transition period to innovation-based environmental solutions. Furthermore, it is important to alert and educate companies about likely resource inefficiencies and potential areas for technological improvement. Another especially important policy area for cleaner technologies in the chemical industry is science and technology policy. While it is clear that support of curiositydriven research needs to be maintained, special support should be given to research that (13) (14)

These examples merely serve to clarify conceptually what is meant by the term ‘cases’. At this stage, they do not constitute any preference for hydrogen or renewable raw material technologies. Project entitled ‘Creating eco-efficient producer services’, funded within the fourth EU RTD framework programme: ‘Environment and climate’.

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has sustainable development as a main aim. Existing support for research in sustainable chemistry could be intensified, and more policy measures should be taken to take advantage of the cumulative and self-reinforcing characteristics of technical change by guiding industry’s continual research for innovations and technologies towards those which are environmentally beneficial. New public mission-oriented projects to achieve sustainable development would need to combine procurement such as direct research funding with other policies in order to achieve pervasive effects. Mechanisms need to be found through which it is possible to integrate and coordinate different policy areas such as science and technology policy, environmental policy, industrial policy, financial policy, trade policy, etc., for the pursuit of sustainable development. In doing so it is of essential importance to give adequate consideration to all three pillars — ecological, economic and social — of sustainable development. Given the key role of the chemical sector for the European industry and the environment and due to the fact that many questions remain to be answered, further research should be dedicated to the role of innovation and cleaner technologies for making this industry fit for sustainable development. Priority tasks for such socioeconomic research into innovation and cleaner technologies would be to investigate the particularities of a number of subsectors of the chemical industry (e.g. petrochemicals, fine chemicals, or pharmaceuticals), to assess alternatives to major synthetic pathways, or to have a deeper look at the opportunities of servicising. The role of SMEs in introducing cleaner technologies in the chemical industry and how to provide them with the necessary support deserve special attention. Furthermore, it would be important to analyse how new developments on the agenda of environmental policy (e.g. integrated product policy) would affect innovation and cleaner technologies in the chemical industry and its subsectors.

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References Achilladelis, B., Schwarzkopf, A. and Cines, M. (1990), ‘The dynamics of technological innovation: the case of the chemical industry’, Research Policy, 19, pp. 1–34. Blazejczak, J., Edler, D., Hemmelskamp, J., Jänicke, M. (1999), ‘Umweltpolitik und Innovation: Politikmuster und Innovationswirkungen im internationalen Vergleich’, Zeitschrift für Umweltpolitik und Umweltrecht, 22 (1), pp. 1–32. Boyd, J. (1998), ‘Searching for the profit in pollution prevention: case studies in the corporate evaluation of environmental opportunities’, Discussion Paper 98-30, Resources for the future, Washington, DC. Christ, C. (ed.) (1999), Production-integrated environmental protection and waste management in the chemical industry, Wiley-VCH. Clayton, A., Klemmensen, B. and Williams, R. (1999), ‘Regulatory frameworks: a crossnational overview’, in Clayton, A., Spinardi, G. and Williams, R. (1999), Policies for cleaner technology — A new agenda for government and industry, Earthscan, London. Clayton, A., Ryan, B. and Williams, R. (1999), ‘Cleaner technologies and the greening of industry: an introduction’, in Clayton, A., Spinardi, G. and Williams, R. (1999), Policies for cleaner technology — A new agenda for government and industry, Earthscan, London. Clayton, A., Spinardi, G. and Williams, R. (1999), ‘What shapes the implementation of cleaner technology? — Conclusions and recommendations’, in Clayton, A., Spinardi, G. and Williams R. (1999), Policies for cleaner technology — A new agenda for government and industry, Earthscan, London. Committee on Economic and Monetary Affairs and Industrial Policy (1997), Report on a communication from the Commission to the Council, the European Parliament and the Economic and Social Committee on an industrial competitiveness policy for the European chemical industry: an example. Duffy, N. and Ryan, B. (1999), ‘Fine chemicals sector’, in Clayton, A., Spinardi, G. and Williams, R. (1999), Policies for cleaner technology — A new agenda for government and industry, Earthscan, London. Faber, M., Jöst, F. and Müller-Fürstenberger, G. (1994), ‘Umweltschutz und Effizienz in der chemischen Industrie — Eine empirische Untersuchung mit 33 Fallstudien’, Diskussionschriften, Universität Heidelberg, Wirtschaftswissenschaftliche Fakultät.

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Kemp, R., Schot, J. and Hoogma, R. (1998), ‘Regime shifts to sustainability through processes of niche formation: the approach of strategic niche management’, Technology Analysis & Strategic Management, 10(2), pp. 175–195. Porter, M. E. and van der Linde, C. (1995), ‘Green and competitive: ending the stalemate’, Harvard Business Review, September–October 1995. Soete, L. (1998), ‘Global possibilities: technology and planet-wide challenges’, in OECD, Balancing economic, social and environmental goals, Dusseldorf, pp. 147–167. Sørup, P. and Gameson, T. (1999), ‘Natural Resources and the Environment Panel report’, EUR 18970 EN, Institute for Prospective Technological Studies, Seville. WBCSD and UNEP (no year), ‘Eco-efficiency and cleaner production — Charting the course to sustainability’, Geneva, Paris. Weizsäcker, E. U., Hunter, A. B., and Hunter Lovins, L. (1996), ‘Faktor Vier. Doppelter Wohlstand — Halbierter Naturverbrauch — Der neue Bericht an den Club of Rome’, Droemer Knaur, Munich. White, A. and Feng, L. (1998), ‘Servicizing: the quiet transition to EPR’, Paper for OECD workshop on extended and shared responsibility for products: economic efficiency / environmental effectiveness, Washington DC, 1-3.12.1998.

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Part II — Specific studies

Part II — Specific studies

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

A — Problem areas with respect to eco-efficiency by Mahshid Sotoudeh (Institute of Technology Assessment, Austrian Academy of Science)

The original report of the study has been shortened and restructured by the editor for inclusion in this volume.

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

Goals and scope The main purpose of this study is to identify products and processes within the European chemical industry with: • • •

especially high environmental protection costs (economic aspect); a high consumption of raw materials and energy (resource consumption aspect); and an intensive contribution to pollution and impacts such as the greenhouse effect and ozone depletion, which receive most criticism from environmental activists (environmental aspect);

as well as to identify other problem areas that could be barriers to the improvement of eco-efficiency. As this study is restricted to problem identification and classification, it does not engage in any prioritisation of the presented problems. While it points out some of the most important problem areas, it does not claim completeness. The first part of this study provides a listing and short description of the problems and needs of the chemical industry as identified by relevant stakeholders (e.g. experts in the chemical industry and in environmental technologies, scientists who perform research on these subjects, environmental activists with relevant recent publications, regulating and controlling authorities, and experts with experience in the public supply of industry). Stakeholders’ information was gathered through expert interviews and a review of related references. Interviews were organised as two-hour meetings, brainstorming or discussions. Ten external experts with the following fields of experience were interviewed: • • • • • •

university professors of chemical engineering and unit operation with international contacts and several references on sustainable development (two interviews); university research fellow with references and international contacts on cleaner technologies (one interview); consultants with international contacts and several references on cleaner technologies, environmental impact assessment, EMAS and sustainable development (two interviews); experts of the Austrian Federal Environmental Agency who are chemical engineers and work in the working groups of the IPPC directive (a group interview); experts of environmental organisations who have much experience of and references on problems of the chemical industry (two interviews); industry experts who were consulted on specific technical questions.

Information was also gathered through discussions with Institute of Technology Assessment (ITA) staff working in different disciplines such as medicine, biotechnology, and environmental technology.

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

During the interviews and the review of related references in this study, it became obvious that different stakeholders discussed the problems related to the chemical industry in different ways and from totally different perspectives. Therefore, the identified problems were divided into two classes. The first comprises technology-related problems, which are classified as follows: • • • •

problems related to substances; problems related to products; problems related to core processes (e.g. production of chlorine); problems related to periphery processes (e.g. transport).

The second class comprises underlying problems that are considered as barriers to the resolution of the problems of the first class. Several underlying problems such as structural inertia or inertia of interactions of regulation systems, industry, research and science institutes, and markets have been identified. They are classified in the following groups: • • •

regulatory/political factors (e.g. different status of emission limits in Europe); barriers to changes and innovations which could improve process and product ecoefficiency (e.g. short-term policy or economic goals); market and consumption problems (e.g. commercialisation of new chemicals without sufficient ecotoxicological knowledge of their effects).

Drawing from the analysis of technology-related and underlying problems, starting points for eco-efficiency improvements in the chemical industry are derived.

Technology-related problems Substances The following short description of problems related to heavy metals, ozone-depletion substances (ODS), persistent organic pollutants (POPs), and greenhouse substances is mainly based on a report by the European Environment Agency (1998), which is presently considered the most relevant reference for such problems. The report contains the results of the second assessment of the state of the environment at the pan-European level. Heavy metals (organo-metallic compounds) Heavy metals with the greatest risks to health are cadmium (Cd), mercury (Hg) and lead (Pb). Cadmium is used in paints and plastics as well as batteries. Mercury is used in dental practice and also in batteries. The most important use of lead from an environmental point of view is as an anti-knock additive in petrol. All three are toxic to

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

humans and can generate harmful effects at background levels. Moreover, this harmful potential can increase as a result of bioaccumulation (European Environment Agency, 1998). Organo-metallic compounds are used as additives for special functions such as improving plastic durability when used as stabiliser. At the same time, they reduce the recycling possibility of these products. ‘Heavy metal emissions are decreasing as a result of the removal of lead from petrol, improvements in wastewater treatment and incinerators, cleaner technology in the metals industry and reductions in the use of cadmium and mercury in stationary sources. Diffused emissions of cadmium and mercury, however, are more difficult to manage and they remain a problem. Significant further improvement could be achieved if the available techniques were implemented in all countries’ (European Environment Agency, 1998). Ozone-depletion substances Man-made ozone depletion is caused by chlorine and bromine, but not all chlorine- and bromine-containing compounds are harmful to the ozone layer. A large number of compounds react with other gases in the troposphere or dissolve into rain droplets and do not reach the stratosphere. The longer the atmospheric lifetime of a compound, the more it can enter the stratosphere. The chlorine and bromine species that cause depletion of the ozone layer are chlorofluorocarbons (CFCs), carbon tetrachloride, methyl chloroform, HCFCs, and halons, all of which are entirely of anthropogenic origin. The ozone layer can also be depleted by methyl chloride and methyl bromide. Emissions of CFC-11 and CFC-12 began to fall in 1974, following reductions in their use as propellants in aerosol spray cans, resulting from concerns triggered by publications in the early 1970s which suggested that CFCs could deplete the ozone layer. Emissions rose again in the early 1980s, mainly from non-aerosol uses such as foam blowing, refrigeration and air-conditioning, and fell after 1987 in response to the Montreal Protocol. The limitations imposed on the production of CFCs triggered the use of HCFCs and HFCs as replacement compounds. HCFCs contain chlorine and can affect the ozone layer, but much less than the CFCs they replace. HFCs do not destroy ozone (but they are greenhouse gases and belong to the basket of greenhouse gases agreed upon in the United Nations Framework Convention on Climate Change Kyoto Protocol). Methyl bromide is another gas that can deplete stratospheric ozone. Global emissions and sinks of methyl bromide are not well understood. Anthropogenic emissions come from agricultural usage (mainly soil fumigation, 31 % of total emissions), biomass burning (22 %), and gasoline additives (7 %), with minor contributions from sources such as the fumigation of buildings and containers (3 %) and industry (2 %). The largest natural source of methyl bromide is the oceans (35 %), but they also act as a large sink, making their

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

overall role in the global budget of methyl bromide difficult to assess (SORG, 1996). Other sinks involve atmospheric oxidation and soil uptake. ‘Halons, CFCs, CCl4, CH3CCl3 and HBFCs have already been phased out of production due to the Montreal Protocol in developed countries’ (European Environment Agency, 1998). Other sources of ozone depletion are emissions of nitrogen oxides, water vapour, and sulphur dioxide from aircraft exhausts. Persistent organic pollutants ‘Persistent organic pollutants like cyclodienes, PCCs (polychlorinated camphenes), PCBs (polychlorinated biphenyls), PCNs (polychlorinated naphthalenes), and organo-metallic compounds (heavy metal compounds) are found all over the globe and can accumulate in the tissues of humans and animals (15). POPs are used in pesticides, insecticides, herbicides, additives, wood preservatives, plastisisers, organo-metallic compounds in paints, antifouling agents, solvents, isolating fluids, etc. Restrictions have been decided for some POPs (such as PCBs, PBBs, DDT, DDE, aldrin, dioxins and furans) in the UN/ECE Convention on Long-Range Transboundary Air Pollution Protocol on POPs’ (European Environment Agency, 1998). Greenhouse substances Substances with global warming potential (GWP) (e.g. halogenated compounds like CFCs, HCFCs, HFCs, PFCs, SF6, or CO2, CH4, N2O) ‘Atmospheric concentrations of CO2, CH4, and N2O have grown significantly since preindustrial times. Atmospheric concentrations of halogenated compounds, which do not occur naturally, have risen rapidly over the past few decades since these compounds have been in widespread use. (...) The main anthropogenic source for greenhouse gases is the emission of CO2 due to the use of fossil energy [European Environment Agency, 1998, Figure 2.15, p. 50]. Methane is emitted due to landfill disposal and pipeline leaks. The largest emissions of N2O come from fertilised agricultural land, adipic acid manufacture for nylon production, and nitric acid manufacture. Emissions of replacement gases for CFCs like HCFCs and HFCs, both greenhouse gases, are increasing. Other potentially important greenhouse gases such as PFCs and SF6 are emitted only in small quantities and thus have only a small impact on global warming at the moment.

(15)

See Table 6.3 in European Environment Agency (1998).

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

Increasing concentrations of greenhouse gases could result in changes in stratospheric circulation patterns which may lead to a thinner ozone layer in polar regions’ (European Environment Agency, 1998).

Products Biocides Biocides are considered in this study as the compounds which are used in industry and agriculture to protect products and processes against unwanted effects of microorganisms, insects, and fungi and flora. In this context, biocides are: • • • • • •

disinfecting agents (e.g. for cool water circulation in industry); antisliming agents (e.g. bactericides and fungicides containing organo-metallic compounds of Hg, tin (Sn) and copper (Cu); fungicides such as seed disinfectants and antifouling agents on ships; wood preservatives; insecticides; pesticides.

Biocides with persistent organic pollutants could have a negative ecological impact on the environment. They may lead to reproductive disturbances in birds and marine mammals, such as seals and dolphins. Moreover, they accumulate in human fat and milk through consumption of agricultural products, fish, and milk. Since biocides with POPs contain organo-metallic or chlorine and aromatic compounds, they have a high material and energy intensity in their product life cycle. High energy consumption in the production of these products causes CO2 emissions and contributes to the global warming effect. Product wastes containing such compounds are hazardous and cannot be recycled. Many persistent and toxic biocides such as esters of phenyl mercury (used as fungicides and disinfectants) are synthetic compounds. The substitution of these substances through natural biocides which are degradable and less toxic is a way of reducing the ecological impacts of biocides in the environment. Other suggestions to improve the eco-efficiency of biocides involve the use of industrial biocides in totally closed systems as well as the optimal design of products and services to reduce the need for biocides in industry and agriculture. Ozone-depletion substances, such as methyl bromide, which are used as fumigating agents should also be substituted. Paints Paints which contain persistent organic pollutants or cause ozone depletion are classified in this study in the following groups: •

paints, lacquers, and inks containing POPs or chlorinated hydrocarbons;

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

• •

water soluble paints and lacquers containing organo-metals; solid-rich paints containing heavy metals.

Some compounds such as some amines or chlorinated and aromatic hydrocarbons used in paints have carcinogenic properties. Some countries prohibit the carcinogenic compounds (16) and set limits on using synthetic solvents such as halogenated aliphatic compounds in paints and coatings. Two interim solutions for paints have been developed recently. Water soluble paints and the solid-rich systems. These new products have a low content of solvents; they can, however, contain heavy metals. Different organo-metallic compounds such as copper (Cu) and nickel (Ni) in green and blue pigments or mercury and cadmium compounds (17) cause wastewater problems in the production and use of paints. Paints with POPs have high energy and material intensity in their product life cycle. Using renewable resources and the concomitant eco-design of products and their coating systems should improve the eco-efficiency of paints and coating services. Cooling agents These and other fluids and gases which contain ozone-depleting substances are considered as products with high environmental negative impacts. Such substances should be substituted or used in totally isolated systems. Many of these substances are banned or restricted through international contracts. Additives such as stabilisers Phthalates used as plasticisers and lubricants are aromatic organic compounds. They are material- and energy-intensive in their product life cycles. The long-term safety of phthalates in plastics is still unknown. Plastic stabilisers containing organo-metallic compounds of Sn and Cd extend the durability of products but reduce the recyclability of plastics. These additives are energy- and material-intensive in their product life cycle. The appropriate eco-design of products may reduce the necessity of these toxic and persistent substances. Fertilisers Problems caused by fertilisation practices are: • • •

the build-up of nitrates in groundwater; the eutrophication of surface waters due to phosphates; the build-up of heavy metals in soils and crops.

Fertiliser phosphates produced from phosphate rock contain cadmium. Phosphate fertilisers may also contain tin between 3 and 19 mg/kg dry weight. Nitrogen fertilisers (16) (17)

Examples are prohibition or control of auramine or benzidine in OECD countries (Clarke and Anliker, 1980, Table 12). In paints, cadmium is used as cadmium sulphide or cadmium sulphoselenide, which present a range of yellow to red pigments. Mercury and zinc sulphide are also used in composites of cadmium pigments. These pigments are widely applied in plastics, ceramics and some industrial coatings, and the legal regulations for them vary from country to country.

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

may contain 0.5–4.0 mg/kg tin (see Ullmann, 1996b, and Filov et al., 1993). Organic and inorganic fertilisers are energy- and material-intensive in their product life cycles. Detergents Detergents contain many different ingredients such as surfactants (water soluble, surfaceactive), builders, bleaches, and auxiliary agents (e.g. enzymes, dyes, and fragrances). Many of these compounds are synthetic substances and have a high energy and material intensity. The ecological impacts of detergents may have different reasons, namely: • • • •

low degradability through branched side chains; eutrophication of standing or slowly flowing surface waters through phosphates (sodium triphosphate); toxic and persistent degradation products of detergents; or allergic reactions through auxiliary agents (e.g. through enzymes).

Polymers which are persistent or are from toxic monomers Persistent polymers do not occur naturally. They are not biodegradable and must be recycled or decomposed at high costs. In some cases, biodegradable polymers such as polyester amides are alternatives to persistent polymers. One approach to biodegradable plastics incorporates cornstarch as an oxidising agent in the polymeric materials. Oxidising agents react in the presence of metal salts in the soil to degrade the polymers. Degradable polymers may involve risks if their degradation products are harmful or if they are mixed with other polymers for recycling. Polymers manufactured from toxic monomers also cause problems due to their manufacturing and usage. The process of manufacturing of polymers such as polyurethane, polyvinylchloride, and polystyrol requires the production of chlorine, isocyanates, phosgene, and many other toxic chemicals (see Concerned People, 1997). The manufacturing processes of these polymers are associated with enormous health risks in the workplace. Products made of these polymers may produce toxic smoke or contain toxic monomers, dimers or additives susceptible to causing allergic reactions or cancer. There have been efforts to switch to safer production processes for polymers such as polyurethane (e.g. reaction of natural instead of synthetic polyalcohols with isocyanates). Although safer production processes can be regarded as a short-term solution, they do not solve the problems associated with the products such as persistent wastes or toxic smoke. A satisfactory and sustainable solution must therefore be developed in order to ensure the production of safer chemicals through safer processes. Excess use of chemicals A problem that is related to most groups of chemical products (e.g. solvents, pesticides, fertilisers and detergents) is the excess use of chemicals. This problem is due to inadequate

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

information for customers about the products and lack of service for applications of certain chemicals such as nutrients, pesticides, and detergents. Nutrients, fertilisers, and pesticides pollute surface water and groundwater through run-off. ‘The nutrients cause excessive algae growth, which draws down oxygen levels so low that shellfish and other aquatic organisms cannot survive. Today, the most serious contamination of groundwater appears to be high levels of nitrates from fertilisers and animal wastes’ (Ervin, 1998). One way of reducing the negative impacts of agriculture is to reduce run-off. However, it is more effective to control the application of chemicals as in fertilisers or pest management systems. There are also integrated pest management systems which include, for example, planting resistant fruits and vegetables, encouraging the presence of beneficial birds and insects, developing soil that is rich with microbial life, and proper fertilisation (see Johnson, 1998). Examples for appropriate service for customers to prevent the excess use of products exist for pharmaceutical products (see Herzenberg et al., 1998–99). Table 1 gives an overview of chemical product groups and their problems for human health and the environment.

Core processes High energy consumption of basic chemical production The high energy consumption involved in the production of basic chemicals is a main problem of the chemical industry which has been discussed in many scientific and technological references. The manufacture of products such as chlorine, ammonia, synthetic gases, sulphuric acid, and sodium hydroxide requires an enormous input of material and energy. The next paragraphs give an overview of energy-intensive processes to illustrate the scope of this problem. ‘Industrial processes are almost exclusively energised by the combustion of fossil fuels, which (by definition) are not regenerated within the system. Almost all of the processes for reducing metals from ores or producing first-tier intermediates are endothermic, that is, driven by externally supplied heat (18). Processes often use catalysts, and rates and directions are fine-tuned by controlled variation of temperatures, pressures, and flow rates or dwell times. There are five major categories of endothermic processes: (1) dehydration; (2) calcination; (3) ‘‘reducing’’ processes for splitting metal (or other) oxides into their constituents; (4) dehydrogenation processes, of which the simplest is the splitting of the water molecule; and (5) processes for combining or synthesising molecules that do not combine spontaneously at ambient temperatures or pressures. Energy is obtained initially from combustion (oxidation) and delivered either by process steam or by direct contact with the oxidation products. (18)

The obvious exceptions are elements occurring naturally (such as sulphur) and hydrocarbons that can be obtained by physical separations from natural gas (methane, ethane, propane, butane) or coal tar (benzene, xylene, toluene). Cellulose occurs naturally in some very pure forms (e.g. cotton), but it is usually obtained from wood pulp by a chemical digestion process.

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Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

Table 1: Product groups and their problems for human health and the environment (19) Products Product group

Examples of compounds Bis(tributyltin)oxide

Biocides with POPs or ODS

Cyclodienens

Paints, lacquers, and inks containing POPs or chlorinated hydrocarbons

Cooling agents, isolating fluids and blowing agents with POPs or ODS

Additives

Solid-rich paints containing heavy metals

Persistent, toxic, degradation of biodiversity

HCFCs

Ozone depletion, global warming potential

HFCs Halons, CCl4, CH3CCl3, HBFCs

Ozone depletion Persistent, toxic, degradation of biodiversity

Stabilisers with heavy metals such as cadmium

Persistent, toxic, degradation of biodiversity

Others, such as lead in petrol

Persistent, toxic, degradation of biodiversity Nitrification

Phosphorous compounds

Eutrophication

Containing heavy metals

Persistent, toxic, degradation of biodiversity

With toxic and stable degradation intermediate such as nonylphenol in detergents With allergenic enzymes Persistent without toxic substances

(19)

Global warming potential

Plastisisers and lubricants with POPs such as chlorinated paraffins, phthalatic acid esters

With phosphates (e.g. sodium triphosphate)

Polymers

Persistent, toxic, degradation of biodiversity, ozone depletion, global warming potential Persistent, toxic, degradation of biodiversity

With branched side chains

Detergents

Toxic, ozone depletion

Water soluble paints and lacquers containing organo-metals

Nitrogen compounds Fertilisers

Persistent, toxic, degradation of biodiversity

DDT, DDE, polychlorinated naphthalenes CH3Br

Paints, lacquers

Problems for human health and the environment

Persistent Eutrophication Persistent, toxic, degradation of biodiversity Allergenic (especially for workers) Persistent

From toxic monomers (PVC, polystyrol, polyurethane, etc.) or containing toxic additives

Toxic

Biologically degradable polymers from synthetic monomers

Possibility of toxicity (in case of toxic intermediates)

Furthermore, for most products it is desirable to improve other factors related to eco-efficiency, such as material and energy intensity, recyclability, or use of renewable resources.

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Comparatively few industrial processes are electrolytic; the production of aluminium, sodium, and chlorine and the refining of blister copper are the primary examples. (...) Most of the reactions by which ammonia, chlorine, lime, sulphur, methanol, ethanol, acetylene, ethylene, propylene, or other first-tier intermediates are converted to other ‘‘downstream’’ compounds are exothermic and — in effect — self-energising. In effect, the first-tier intermediates are the energy carriers for subsequent reactions. They play a role somewhat analogous to that of ATP [adenosine triphosphate] in biochemical systems. However, whereas the ATP is cyclically regenerated within the same cell, the first-tier intermediates are not regenerated but are physically embodied in downstream products. This is another fundamental difference between industrial metabolism in its present form and its biological analogue’ (National Academy of Engineering, 1989). Problems related to the production of chlorine Chlorine-based chemistry has received fierce criticism from environmentalists over the past few years. Chlorine is a basic inorganic chemical. Its production is responsible for very important problems in the chemical industry, namely hazardous wastes and emissions as well as high energy consumption. The problems of chlorine production are studied and described in different national and international references (see also Hendriks and Papameletiou, 1996). A good overview of these problems in Europe is provided by the Dutch Ministry (1998): ‘There are at present approximately 10 800 tonnes of mercury contained in mercury cells used for chlorine production in the EU. Due to the process characteristics, mercury can be lost from the process through emissions to air, discharges to water, and generation of waste and mercury contained in the product. The diaphragm cell and membrane cell techniques do not cause any emissions of this kind, although diaphragm cells operate with asbestos and waste is generated upon replacement of diaphragms and membranes. All three processes cause a slight emission of chlorine to air and generate wastewater and waste from brine purification and caustic treatment. The production of chlorine and alkali is an energy-intensive process and energy consumption is high in all three process types. Furthermore, the production, handling, storage, and transportation of the hazardous chlorine (and of hydrogen) imply a safety risk.’ Fine chemicals Processes for the production of fine chemicals bring their own share of environmental problems. However, they are hard to discuss in a generalised way and need a case-bycase analysis. Here they can only be treated in an exemplary way. One example of the production of fine chemicals is the chemical refining of naphthalene for the production of pure naphthalene. This process causes serious wastewater problems and toxic dispersion through chemical refining with concentrated sulphuric acid and formaldehyde. A physical refining process through multiple-stage crystallisation would solve these problems. Another example of fine chemicals is etinol, which is an intermediate in the production of 47

Part II.A — Specific study ‘Problem areas with respect to eco-efficiency’

vitamins and food dyes. The synthetic reaction consists of the addition of acetylene to a vinyl keton using lithium as the process auxiliary. These examples show that the ecoefficiency-related problems of production of fine chemicals greatly depend on their raw materials and production technologies. Biochemical processes Biochemical processes apply or exploit biological organisms, their parts and activities. Some problem areas of these processes are high expenditure for providing pure air, steam and water for processes as well as sterilisation and isolation of production systems, for example for immobilised enzymes (20). Fermentation vessels, distillation apparatus and autoclaves are the major equipment of biochemical processing. Some major utility systems that are needed to support operation are plant steam, purified water, nitrogen systems, and heating, ventilation and air conditioning (HVAC) (21). HVAC and water systems are of particular importance and must be protected from contamination through energy and material consumption. ‘HVAC systems can account for 20–50 % of initial construction costs. In addition, the space required to accommodate such systems ranges from 20–60 % of total floor space within a facility’ (Stephanopoulos, 1993). Another problem related to biochemical processes concerns allergenic products and compounds. Enzymes such as protease (which hydrolyses proteins and is used in detergents) may cause allergenic reactions in workers, if they breathe the dusts of products. Special drying systems must be used to protect the workers. Emissions and wastes Process emissions and wastes (including waste heat) are one of the most important problems in the chemical industry that affect both existing plants and the design of new plants. An early approach to solving production emissions was the end-of-pipe approach. End-of-pipe technologies were attractive in the short term because of their immediate effects, but in the long term they involve problems such as: • •

(20) (21)

shifting environmental problems from one medium to another (e.g. the application of control technologies for SO2 or dust or wastewater purification technologies leads to the creation of solid wastes and thus to waste management problems); high costs and insufficient efficiency of end-of pipe technologies for solving urgent environmental problems such as global warming and depletion of the ozone layer (see Coenen and Klein-Vielhauer, 1998);

Attaching enzymes to solid surfaces (immobilisation) was the first development towards retaining the biocatalyst efficiency within the reactor. These reactors are, however, difficult to sterilise. They involve extra costs of immobilisation and have mass transfer limitation. Membrane reactors are another alternative. The basic goal of an HVAC system is to bring fresh air into a facility, mix it with recirculated air, and then condition the mixture through filtration, heating, cooling, humidification, or dehumidification.

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•

end-of-pipe technologies which are also not able to solve the problem of product wastes.

Another approach which has the basic intention to avoid, or, if this is not possible, to reduce the creation of waste and emissions at the source results in cleaner production. In this manner, cleaner production also leads to the reduction of resource consumption. Other targets of cleaner production are reducing hazardous wastes and emissions by appropriate substitution of input materials and reducing the risk of accident or malfunction (see Schramm, 1997) (22). An important action by the European Union aiming to reduce production emissions and wastes was the development of Council Directive 96/61/EC of 24 September 1996 concerning integrated pollution prevention and control (IPPC). Article 1 of this directive describes its purpose and scope as follows: ‘The purpose of this directive is to achieve integrated prevention and control of pollution arising from the activities listed in Annex I (23). It lays down measures designed to prevent or, where that is not practicable, to reduce emissions in the air, water and land from the abovementioned activities, including measures concerning waste, in order to achieve a high level of protection of the environment taken as a whole, without prejudice to Directive 85/337/EEC and other relevant Community provisions’ (Council of the European Union, 1996). As regards problems of product wastes after usage, there are, in addition to national regulations, a number of European directives that prohibit certain products or regulate the collection and recycling of used products in the European Union (e.g. Council Directive 91/157/EEC of 18 March 1991 on batteries and accumulators containing certain dangerous substances, and European Parliament and Council Directive 94/62/EC of 20 December 1994 on packaging and packaging waste) (24).

(22)

(23)

(24)

The author analysed the causes of wastes and emissions in this article. Materials are categorised into two groups: category 1 — input materials that must be processed entirely into the product; and category 2 — input materials that are not intended for processing into the product (e.g. auxiliary materials). Based on this distribution, it follows that the generation of waste and emissions in a production process is solely a result of two causes: first, inefficiency of the production process for resources of category 1, and, second, materials not intended for processing into the desired product (category 2) must leave the production process completely as waste or emission (see Schramm, 1997). Activities of the chemical industry are described in Section 4 of Annex I: Section 4. Chemical industry: Production within the meaning of the categories of activities contained in this section means the production on an industrial scale by chemical processing of substances or groups of substances listed in Sections 4.1 to 4.6; Section 4.1. Chemical installations for the production of basic organic chemicals; Section 4.2. Chemical installations for the production of basic inorganic chemicals; Section 4.3. Chemical installations for the production of phosphorous-, nitrogen- or potassium-based fertilisers (simple or compound fertilisers); Section 4.4. Chemical installations for the production of basic plant health products and of biocides; Section 4.5. Installations using a chemical or biological process for the production of basic pharmaceutical products; Section 4.6. Chemical installations for the production of explosives (Council of the European Union, 1996). (A list of polluting substances is also indicated in Annex III to Council Directive 96/61/EC concerning IPPC.) http://europa.eu.int/eur-lex/en/lif/dat/1991/en_391L0157.html; http://europa.eu.int/eur-lex/en/lif/dat/1994/en_394L0062.html

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An approach that incorporates the concept of cleaner production and addresses the product waste problem is called ‘integrated environmental technologies’. Some features of this approach are: • • • • • •

lower input of energy and materials in production processes and products resulting in lower environmental pollution; process-integrated recycling of materials, water and use of waste heat (25); replacement of hazardous substances by other, more environmentally sound, substances; consideration of the entire life cycle of products in the engineering process; more durable and easily repairable products and processes; the application of integrated environmental technologies which can lead to an increase in overall productivity (26) (Coenen and Klein-Vielhauer, 1998).

Genetic engineering Genetic engineering is an interdisciplinary technology which is mainly used in agriculture (e.g. transgenic seeds or micro-organisms), or medicine, and for manufacturing pharmaceutical products (e.g. for diagnosis, tests, and therapy). The use of genetic engineering in closed systems is regarded in many cases as the leading future technology with high efficiency and predictable risks. On the other side, the risks associated with the release of transgenic organisms into the environment are a subject of scientific controversy with a cross-discipline character. ‘According to biologists they improve the natural processes through genetic engineering and they promise environment-friendly products. Ecologists have emphasised the need for careful safety testing and for better ecological knowledge of the environmental risks of biotechnology. Along with environmentalists, some scientists have warned that genetically modified organisms could impose a genetic treadmill, by analogy to the chemical treadmill of pesticides that have generated selection pressure for resistant pests’ (Levidow et al., 1997). Making decisions on the release of transgenic organisms is very difficult in the current context of scientific controversy. Indeed, how should one compare the different considerations of a hypothetical economic advantage with the disadvantage of hypothetical risks? (27)

Periphery processes Activities such as transportation, storage and the handling of chemicals as well as the testing and application of products are considered as periphery processes. The main eco-

(25) (26)

(27)

Recovery of chemicals from wastewater and gases (e.g. production of sulphuric acid from sulphur dioxide in waste gas) is often not economically acceptable due to the low prices of the chemicals. Traditional analyses of process economics might show that inherently safer and less polluting plants are less efficient in terms of energy or raw materials usage. ‘(...) When potential savings from reduced accident frequency, avoidance of generating hazardous waste that must be disposed of, and decreased potential liability are taken into consideration, inherently safer and less polluting plants may prove to cost less overall to build and operate’ (National Academy of Engineering, 1989, pp. 171–173). See Schomberg (1995).

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efficiency-related problems of these processes are safety risks and high energy and material consumption. Every chemical factory using toxic and/or hazardous substances implies a high safety risk. Diffused and chronic emissions are still one of the most important problems of large plants. In addition, within such plants there are huge storage and very frequent transportation of chemicals. An accident in such plants would lead to inefficiency and considerable damage, as well as endangering human life and the environment. Three types of events are traditionally associated with the chemical industry: release and spill (Seveso, Bhopal), fires (Basle) and explosions (Flixborough). These problems may happen inside or outside the factory. The Seveso accident (28) is an example of storage risks inside a factory. The product scattered over a large area by the accident was an extremely toxic dioxin. No measures had been incorporated to control this compound, since it was an intermediate compound which immediately converted to a less hazardous one. Accidents outside factories can be reduced by limiting the transport of dangerous substances, with limited amounts of material per container, and by the design of safe transport and warning systems (see Ullmann, 1996c: ‘Transport, handling, and storage’, and Ullmann, 1996b: ‘Plant and process safety’). To improve eco-efficiency, parallel to the conventional safety activities (such as safe processing, usage of special safety equipment, technical inspections, etc.), it is necessary to avoid the expansion of the sites and try to use the available space very efficiently. The rational use of site space leads to the continuous checking of operational unit functions and reduction of transport inside the sites that helps reduce the risk of plant accidents. The transportation risks of hazardous chemicals outside chemical plants must be taken into account at the early stages of the design of a plant and when choosing the location of the production site. The real costs and risks associated with the transportation of hazardous chemicals must be considered.

Underlying problems Underlying problems are considered in this analysis as barriers to the solution of technology-related problems. They comprise regulatory/political factors as well as business factors. Different status of emission limits and national environmental legislation Environmental agencies indicate that the different status of emission limits and national environmental legislation may cause economic disadvantages for some countries or retard (28)

This major accident in a chemical factory in Seveso led to a European Community regulation, the so-called Seveso directive (Ullmann, 1996d).

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the diffusion of innovative technologies. An example of different emission limits for incinerators can be found in Häusler and Schindler (1998) (29). There are examples of countries where stricter emission limits have resulted in innovative processes of using waste (gas, water or solid) as a resource for chemicals (e.g. production of sulphuric acid from sulphur dioxide in waste gas), whereas other countries are lagging behind. Insufficient guaranty of voluntary and responsible action by the industry in the absence of strong social attention and shared responsibility Environmental activists, regulation authorities, and some scientists have noticed the problem of insufficient guaranty of voluntary and responsible action by the industry in the absence of strong social attention and shared responsibility for defining goals and the continuous checking of success. There are new examples of voluntary activities like ‘Responsible Care®’ that intend to improve the environmental, health, and safety initiative performance of the chemical industry. But there are also cases such as the voluntary activities of the chemical industry due to CFCs since 1972 that show a shift of the ozone-depletion problem over rather a long period of time to other problems like the greenhouse effect. Environmental agencies which are aware of many such practical examples cannot expect sufficient guaranty of voluntary actions by economic organisations which tend towards the short-term maximisation of profits. Shared responsibility between all parties, including the public, as both citizens and consumers (fifth environmental action programme of the European Commission), assumed the active policy role in defining goals and controlling success. This cannot be achieved without clearly authorised rules depending on clear defined policy goals. Insufficient sharing of civil society regarding decisions on environmental issues Civil society can have an immense effect on industrial environmental strategy, not only through market pressure but also via social norms and cultural behaviour. This power of the society often cannot be used optimally because of the lack of information and insufficient opportunities for society for active participation in environmental decisionmaking processes. Howes et al. (1998) suggest that environmental goals can be achieved through the combination of market forces and public actions by the employment of the creative energy of millions of decision-makers. Their argument is: ‘Credible information about environmental performance, public policies that harness market forces, and public pressure — the expectation of a private commitment to the public welfare — may ultimately be enough to keep most business and communities operating on a track of continuous environmental improvement.’ (29)

Table 3 in Häusler and Schindler (1998) indicates that the Netherlands has the strictest emission limits for nitrogen oxides, sulphur dioxide, and dust, Germany has the strictest limits for heavy metals, Switzerland for ammonia and Austria for hydrochloride, hydrofluoride and carbon monoxide.

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Short-term goals which neglect long-term and sustainable solutions Most of the stakeholders mentioned the economic and legislative difficulties involved in publicly and privately subsidising long-term projects which are important for innovation. In addition, unpredictable regulations and legislation are often barriers to long-term investigations and innovations. ‘Innovation processes do not depend on the duration of legislative periods or the run time of manager contracts. They can be promoted systematically, but not accelerated for an unlimited period. Innovation remains a spontaneous, creative process, where an even predictable result does not correspond to a certain input as output necessarily’ (Kiper and Schütte, 1998). Innovative enterprises know the key role of long-term goals for innovation. ‘It is not easy to find a reasonable and affordable mix for an industrial corporation. Obviously we should have many projects with a horizon of 1 to 3 years; we should have nearly as many of 3 to 6 years. We need a few of 7 to 10 years, and we have to afford even one or two going beyond 10 years. The last two are for bridging the gap to science development including universities and to keep a standard of excellence’ (Jucker, 1998).

High patent process expenditure for small firms The high costs of gaining access to the patent system in Europe are a main problem for innovative enterprises and particularly small and medium-sized enterprises (SMEs). The Green Paper presented by the European Commission on 24 June 1997 suggests modernisation and improvement of the patent system in Europe and the development of a unitary patent to cover the entire Community. This document emphasises the important role of patents for promoting innovation, creativity, and employment through encouraging research and its commercial exploitation (see European Commission, 1999). In addition to discussions on adequate protection and optimum legal certainty, it is suggested that the patent system can become more attractive to small and medium-sized enterprises by reducing the costs of patent filling as well as translation (30). It is also necessary to provide direct information to enterprises to assist them in their representations from the moment of innovation right up to the award of the patent and its commercial management.

(30)

Due to the status quo of European patent law, the patent owner is required to translate the entire patent into all the languages under the scope of the patent.

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High environmental management expenditure for small firms During recent years, different environmental management strategies and systems have been developed in Europe. In many aspects, good environmental management and good management are the same thing. Larderel (1998) defines the scope of utility of environmental management systems in the following manner: • • • •

evaluate and improve processes and applications such as environmental audits, cleaner production assessments, safety and energy audits; design environmentally sound products, using tools such as life-cycle analysis and risk assessment; communicate with stakeholders, employees, shareholders, customers, and suppliers through mission statements, environmental reporting and environmental purchasing and procurement; and monitor the progress and compare it with that of other companies, through benchmarking, cost accounting and performance indicators.

The implementation of environmental management systems is associated with two kinds of investigation costs, namely internal and external costs. The relation of external costs to internal costs for small and medium-sized enterprises is found to be higher than for big companies. The sum of the costs per employee is also higher for SMEs than for big companies (see Kanatschnig et al., 1996). Although there are already different funding instruments for the initial implementation of environmental management systems in SMEs, it is necessary to support SMEs in the continuous improvement of these systems. Insufficient customer information about environmental aspects Customers often claim that they do not have enough information about the availability of products without negative ecological impacts or that such products do not exist at all. This indicates insufficient environmental sensibility in marketing.

Conclusions: Starting points for eco-efficiency improvements Starting points related to the improvement of eco-efficiency consider mainly structural changes (such as increasing flexibility in organisational structures) to improve the innovation atmosphere in the European chemical industry. Such issues are the basis for required technological and strategic changes such as reduction of resources consumption and emissions through effective material and energy management.

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Some identified needs such as real costs of resources and transportation provide incentives for environmentally sound innovations. They can lead to the reduction of the material and energy intensity of products and services, and the design of more durable and recyclable products as well as the maximisation of use of renewable resources with less or no negative impact on the environment. A lack of innovations is often a sign of the structural inertia of systems as well as shortterm goals and strategies of organisations. The resolution of problems to improve ecoefficiency needs innovations in all of the participating parties. For example, the companies need a more creative atmosphere. The innovative companies have some good ideas about creating such an atmosphere: ‘We may learn that the best people, the best laboratories, and the best organisation alone do not yet mean a creative and productive atmosphere ... Ideas for innovations and inventions are conceived at the centres of interference in a well-organised and structured research and development apparatus’ (Jucker, 1998). Consultants also warn of obstacles to creativity. This is a general problem within organisations. The main problem is the failure of acceptance of creative thinking as a valid employee activity. ‘Organisations cannot profit from employees’ creative potential until their supervisors encourage and ask for creativity instead of censoring it’ (Hiam, 1998). Managers often complain about the absence of profitable innovations without considering the negative impact of their short-term goals on the creative atmosphere in their enterprises. The environmentally sound technology policy of governments is an essential factor for the development of sustainable technologies. Government can accelerate the solution of eco-efficiency-related problems through promoting innovative alternatives with problemsolving potential. In this case, regulations as bans are often critical. ‘Bans in the absence of alternatives would likely lead to uncontrollable, uncooperative behaviour both by producers still seeing a market opportunity and by consumers wanting a service’ (National Academy of Engineering, 1989). This section contains brief descriptions of needs identified by stakeholders. The ranking of issues was carried out in analogy to the level of stakeholder attention. Cooperation of the chemical industry with customers to manage the final consumptionrelated problems Consumption-related problems are caused either by insufficient information available to the customers or a lack of concern by the producers about the environmental effects of the chemical products. Both of these problems can be resolved through better cooperation between the chemical industry and customers. The final consumption-related problems

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such as toxic emissions (31) or wastes should be recognised through consumer feedback and treated quickly. This requires a complete service centre in which diagnosis of problems and treatment are intertwined. Iteration and feedback, often in real time, are essential, and the product or end point may change many times (Herzenberg et al., 1998–99). Effective material and energy management Effective material and energy management is a basic requirement for all manufacturing sites. A good overview of and sufficient data on the material and energy streams and effective controlling and management of the inputs and outputs of processes are the most direct way to reduce the consumption of resources and emissions. Product design considering the ecological aspects Product design considering the ecological aspects, also called environmental awareness product development, eco-design, or design for the environment, means to provide an environmentally friendly design taking into account the entire life cycle of a product. In order to achieve the specific environmental impacts of a product, the entire expenditure for material and supplies, used in the life cycle of the product or the service needs to be taken into account. In addition, all materials must be considered which are used for energy inputs. Material inputs and service outputs must be compared with one another. The methodology of the design process must also be brought up for discussion. While in the past the product developer had to consider only the product properties for production and use, today recycling and disposal issues are also considered. More cooperation between the chemical industry and other industries to produce new (environmentally sound) products (horizontal clusters) and sustainable supply chain management More cooperation between the chemical industry and other industries is necessary to produce new, environmentally sound, products with reduced environmental impacts (horizontal clusters), and achieve sustainable supply chain management systems. The development of environmentally sound products is possible only with the cooperation of resource suppliers, chemical producers, and user industries in a horizontal cluster for research, design, and production processes. The chemical industry can also profit from such cooperation and the building of horizontal clusters to foresee market requirements and coordinate both logistics as well as optimal production and achieve a better supply management. ‘It is an economic challenge for the chemical industry to optimise the total costs for different factory sites and different raw material qualities as well as individual customer desires. Large-volume productions over longer times lower manufacturing costs and, however, cause storage and logistics (31)

An inventory of volatile organic compound (VOC) emissions in the Netherlands in the late 1980s revealed that three quarters of emissions were consumption-related, in particular in the application of paints and during vehicle refuelling (Berkhout, 1998).

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costs. On the contrary, flexible and demand-based charge of reactors decreases storage capacity and site costs, but often changes in the reactor cost cash and efficiency. Only firms survive in the market, warns Longley, who succeed in a global and holistic optimisation of the manufacturing processes and production logistics from the supplier to the customer’ (Rose, 1998). ‘It is important that supply chain management does not lead to an economic system which maximises the satisfaction of the customers’ wishes through rapid changes without considering the employees’ social needs — just-in-time employment system’ (Challenger, 1998). It would therefore be necessary to develop sustainable supply chain management which considers the economic and ecological aspects as well as the social facts of the production process. Real costs and suitable economic instruments such as taxes on resources that indicate environmental impacts Real costs and suitable economic instruments such as taxes on resources must indicate the environmental impacts and alter customer behaviour across the production system (32). Environmental tax policies are increasingly being implemented as part of an integrated approach to tax reform, in which revenues from environmental taxes are used to permit reductions in labour taxes and/or other existing taxes. Environmentally related taxes and charges in OECD countries are listed in the document of the OECD on evaluating economic instruments for environmental policy for 1997 (OECD, 1997). Table 1 of this document shows that all European members (except the Czech Republic) have taxes on leaded fuels. Norway and Sweden have a sulphur tax as well as taxes on fertilisers and pesticides. Denmark and Finland also have taxes on pesticides. Denmark is the only country in this table which has a tax on solvents (see Table 1, OECD, 1997, pp. 20–22). Real costs for transportation that indicate environmental impacts Transportation of resources and primary and secondary products as well as additives to the manufacturing site and finally to the market is an energy-intensive and polluting part of a product’s life cycle. The real costs of transportation are essential factors in improving the eco-efficiency of products and processes. This would also reflect the real costs of imported goods and resources and is a step towards reducing resource consumption. Clear basic environmental objectives articulated by policy-makers Properly enforced environmental regulations are needed to compensate for the uncertainty of economic instruments. But if local regulations conflicted with national and international approaches, they would cause complex burdens. Not only the consistency of the regulations but also their problem-solving potential are required for their success. For (32)

The measure of the environmental burdens and full environmental costs of product systems is an instrument of the integrated product policy (see Berkhout, 1998).

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example, if the regulations become technology-specific, they would foster the use of existing technologies rather than encouraging the development of new and more innovative solutions. On the contrary, clearly articulated basic environmental objectives are a regulation instrument that permit the institutional incentives for progress (see Jain et al., 1996). Harmonisation of the patent law in the area of biotechnology and genetic engineering ‘When the European patent was written 30 years ago, it was difficult to understand the future field of activity of biotechnological research, as well as its application possibilities or the different potential problems in the special area of ethics. Apart from the French patent law of 1994, there is no regulation in any national European patent law on the protection of intellectual property of biotechnological innovations’ (Flammer, 1999). The protection of intellectual property is essential for biotechnology firms because of the high development costs of their products. But there is still no coherent legal framework for patent protection of biotechnological inventions. National, European (European Patent Convention — EPC) and international (Patent Convention Treaty — PCT) patent rights exist in parallel. One of the main problems for European legal patent protection is the possibility of different interpretations by national laws and national courts, which causes a high risk of legal heterogeneity within Europe. The directive on legal protection of biotechnological inventions (Directive 98/44/EC) is the recent legislation which aims at a coherent legal framework for patent protection. The date for transposition into the national law of the Member States is July 2000 (see Thumm, 1999). Facilitating standardisation for environmentally sound products The standardisation procedure represents a large obstacle for many products made of renewable raw materials. Today’s standardisation is obviously structured on conventional products, in particular products associated with fossil resources. It sets narrow limits to the product properties, which often cannot be achieved by products made of renewable raw materials. Increasing flexibility in organisational structures Environmental organisations and universities notice the differences of acceptability of innovations with problem-solving potential in small and big companies. Small but autonomous companies are often more flexible when it comes to changes, while subsidiaries of big companies need a long time to accept innovations, if they do at all. These subsidiaries need more autonomy for their innovative research which is consistent with their local resources. This is often impossible due to the central organisation and structural inertia of big companies. More flexibility of the structure of big organisations and more local possibilities are the basic requirements for innovations.

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Needs related to training and education Different areas of education and training related to chemical science, engineering and practice should be improved. Society needs basic knowledge in order to allow active participation in decision-making regarding the activities of the chemical industry. General education must do more to address the properties of materials science and their effects on the environment. Chemical engineering and training programmes also need more emphasis on sustainable development and ethics especially in the area of genetic engineering. Education plays a very important role in democratic and liberal countries in preparing scientists and researchers for their great responsibility. It is also necessary to train young people in colleges and universities in additional skills such as problem solving, information handling, organisation and communication. Working in interdisciplinary teams will be more and more important for chemical research and practice. At present, there is a shortage of people who can work successfully in such teams. Continuous education is an indispensable instrument for improving the innovative climate of enterprises. These needs cannot be fulfilled without the collaboration of the public and private sectors to provide the effective financial support for general education, research, and training in colleges and universities as well as training programmes for workers. More focus of process engineering on pollution prevention and maintenance management to reduce resource consumption and risks Designing and developing units that minimise waste production as well as energy and material consumption play a key role in process engineering for environmentally sound technologies. Compact plants are a way to improve the eco-efficiency of processes because they permit more selective operations (such as separation, distillation, and reaction) with higher efficiency (see Coxon, 1999, Barlmeyer, 1998, Büttner and Passeri, 1998, and Pongratz et al., 1998). Not only the design of efficient plants but also their effective maintenance is necessary to reduce environmental impacts and production costs. In Europe, approximately DEM 2 500 billion and, specifically in Germany, approximately DEM 300 billion are spent annually on maintenance of industrial plants. In order to support engineers in the area of weak-point research and maintenance of production plants, the European Maintenance Management Academy was created.

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European Commission (1999), ‘Promoting innovation through patents’, fin. 42, 1999-0205, 28 (http://europa.eu.int/comm/dg15/en/intprop/indprop/8682en.pdf#xml=). European Environment Agency (1998), Europe’s environment: the second assessment, Office for Official Publications of the European Communities, Luxembourg. Falkner, E., Schöffl, H., Tritthart, H. A., Reinhardt, C. A. and Appl, H. (1997), ‘Tierversuche: Gentechnologie und Ersatz- und Ergänzungsmethoden’, in BMAGS, Graz. Filov, V. A., Ivin, B. A. and Bandman, A. L. (eds) (1993), ‘Elements in Groups I–IV of the periodic table and their inorganic compounds’, Harmful chemical substances, ed., Ellis Horwood Limited. Flammer, R. (1999), Biotechnologische Erfindungen im Patentrecht, Verlag Österreich. Häusler, G. and Schindler, I. (1998), ‘BAT bei Abfall- und Mitverbrennungsanlagen in Österreich’, in BMUJF, UBA, Vienna. Hendriks, C. and Papameletiou, D. (1996), ‘Strategien zur Zukunft der Chlorindustrie’, IPTS Report, 5, June 1996, pp. 7–13. Herzenberg, S. A., Alic, J. A. and Wial, H. (1998–99), ‘Toward a learning economy’, Issues in Science and Technology, winter 1998–99, pp. 55–62. Hiam, A. (1998), ‘Nine obstacles to creativity and how you can remove them’, The Futurist, October 1998, pp. 30–34. Howes, J., John, D. and Minard, R. A. (1998), ‘Resolving the paradox of environmental protection’, Issues in Science and Technology, summer 1998, pp. 57–64. IMPEL network (1998), ‘Interrelationship between the IPPC, EIA, Seveso directives and the EMAS regulation’ (http://europa.eu.int/comm/dg11/eia/eia-studies-and-reports/impelfull-text.pdf). Jain, R. K., Aurelle, Y., Cabassud, C., Roustan, M. and Shelton, S. P. (1996), ‘Environmental technologies and trends’, in Förstner, U. (ed.), Environmental engineering, Springer Verlag. Johnson, D. (1998), ‘Chemical-free lawns and gardens’, The Futurist, May 1998, pp. 12 and 13. Jucker, H. K. (1998), ‘Chemicals — An industry in a state of transition, Chimia, 52, pp. 147–153.

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Kanatschnig, D., Neuböck, J. and Potyka, S. (1996), ‘Öko-Audit, Evaluierung der ITFPilotförderung’, in B. BMWV, BMUJF, Amt der O.Ö. Landesregierung, Wirtschaftskammer Österreich, O.Ö. Umweltakademie, Institut für angewandte Umweltforschung. Kiper, M. and Schütte, V. (1998), ‘Innovation & Zukunftspolitik’, Zukünfte, 24, summer 1998, pp. 34–40. Kirk-Othmer (1980), ‘Fine chemicals’, Encyclopedia of Chemical Technology, VCH. Krotschek, C., Wimmer, R. and Narodoslawsky, M. (1997), ‘Stofflicher Nutzung nachwachsender Rohstoffe in Österreich’, in BMWV, Sustain, Graz. Larderel, J. A. D. (1998), ‘Environmental management tools for sustainable development’, in Filho, W. L. (ed.), Environmental engineering: international perspectives, Peter Lang, Europäischer Verlag der Wissenschaften. Levidow, L., Carr, S., Schomberg, R. V. and Wield, D. (1996), ‘Regulating agricultural biotechnology in Europe: harmonisation difficulties, opportunities, dilemmas’, Science and Public Policy, 23(3), pp. 135–157. Levidow, L., Carr, S. and Wield, D. (1997), ‘Environmental risk disharmonies of European biotechnology regulation’, Agbiotech News and Information, 9(8), pp. 179– 184. Lichtenecker, R., Schmidt, A. and Schneider, F. (1994), ‘Ökonomischen und technischer Grundlagen einer Recycling-Wirtschaft’, in BMWV, Johannes Kepler Universität Linz, TU-Wien. Lindfors, L.-G., Christiansen, K., Hoffman, L., Hanssen, O.-J., Ronning, A., Ekvall, T. and Finnveden, G. (1995), ‘LCA-Nordic’, Technical Reports, No 10, and Special Reports, No 1–2. National Academy of Engineering (1989), Technology and environment, Jesse H. Ausubel, Hedy E. Sladovich. Aufl., Washington, National Academy Press. Nielsen, B. B., Christiansen, K., Doelman, P. and Schelleman, F. (1994), ‘Waste management: clean technologies’, in D. EC, Update on situation in Member States. OECD (1997), Evaluating economic instruments for environmental policy. Ornetzeder, M. and Schramm, W. (1997), ‘Die Diffusion von cleaner Production in Österreich’, in BMUJF, Vienna, ITA, ÖAW. Piringer, M. (1998), ‘Daten und Fakten zum Thema Nawaro’.

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Pongratz, E., Diemer, W. and Oechsle, D. (1998), Drucknutschen — Diskontinuierlich geschlossene Filter. Roodman, D. M. (1998), ‘The natural wealth of nations’, Starke, L. (ed.), The Worldwatch Environmental Alert series, W.W. Norton & Company, Washington. Rose, B. (1998), ‘Supply chain management’, Chemie-anlage + verfahren, 11, pp. 73–76. Schomberg, R. V. (1995), Der rationale Umgang mit Unsicherheit, Lang. Schomberg, R. V. (1998), ‘An appraisal of the working in practice of Directive 90/220EEC on the deliberate release of genetically modified organisms’, European Parliament/STOA, Luxembourg. Schramm, W. (1997), ‘New findings on the generation of waste and emissions, and a modified cleaner production assessment approach illustrated by leather production’, J. Cleaner Prod., 5(4), pp. 291–300. SORG (1996), Stratospheric ozone 1996, UK Stratospheric Ozone Review Group, Sixth report. Stephanopoulos, G. (1993), ‘Bioprocessing’, in Rehm, H.-J. and Reed, G. (eds), Biotechnology, Volume 3, VCH, Weinheim. TAB (1998), ‘Kein Markt für ‘‘nachwachsende’’ Baustoffe?’, TAB-Brief Nr. 15, 1998-12, pp. 25 and 26. Thumm, N. (1999), ‘Patent protection for biotechnological inventions: incentive for European biotech innovators’, IPTS Report, 33. Ullmann (1996a), ‘Ethics and industrial chemistry’, Ullman’s Encyclopedia of Industrial Chemistry, VCH. Ullmann (1996b), ‘Fertilisers’, Ullman’s Encyclopedia of Industrial Chemistry, VCH. Ullmann (1996c), ‘Safety problems in chemical plants’, Ullman’s Encyclopedia of Industrial Chemistry, VCH. Ullmann (1996d), ‘Transport, handling, and storage’, Ullman’s Encyclopedia of Industrial Chemistry, VCH. Weiner, S. A., Cranford, B. and Chum, H. (1998), ‘The chemical industry of the future: two views’, Chemtech, April 1998, pp. 10–15.

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Acknowledgements The author acknowledges the following experts’ and colleagues’ participation in a number of interviews conducted for this study. Their knowledge and expertise in the area of sustainable technologies as well as the chemical industry as reflected in their interview results complemented the author’s review of relevant references regarding the design and content of this report. Prof. Alfred Schmidt

Institute of Chemical Engineering, Fuel and Environmental Technology, UT-Vienna Prof. Michael Narodoslawsky........ President of the Sustain Association; Institute of Unit Operation, UT-Graz Dr Michael Harasek Institute of Chemical Engineering, Fuel and Environmental Technology, UT-Vienna Dr Christian Plas ............................ Consulting Denkstatt Dr Roland Kuras ............................ Consulting TechSet Dr Ilse Schindler ............................ Federal Environmental Agency, Austria Dr Brigitte Winter .......................... Federal Environmental Agency, Austria Dipl.-Ing. Joachim Kircher ............ Federal Environmental Agency, Austria Dr Thomas Belazzi ........................ Greenpeace Austria Dr Markus Piringer ........................ Global 2000 ITA colleagues Prof. Gunther Tichy ....................... Director of the ITA Dr Wilhelm Schramm .................... Field of environmental technology Dr Mahmoud Khene Field of healthcare technology assessment Dr Helge Torgersen Field of genetic engineering and biotechnology

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B — Expert inquiry on innovation options for sustainable development

by Peter Eder (IPTS)

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Introduction As analysed in Part I of this report, sustainable development and competitiveness require innovation that brings a ‘double dividend’ or ‘win–win’ solutions, which means that it should improve both the ecological and economic performance of the economy in order to increase wealth and reduce the environmental impact at the same time. The expert inquiry presented here has had the aim of investigating the potential of innovation options to render a double dividend for the chemical industry and to identify starting points for facilitating actions. It elucidates for these options the expected ecological and socioeconomic effects, the technological feasibility and the likeliness of medium-term realisation, and it asks for the market potential of innovation options and for barriers to their development and exploitation. The results have been considered as an important input to the analysis presented in Part I of this report.

Scope of the inquiry Size and target group The expert inquiry was carried out by means of a questionnaire that was sent out to 126 potential experts. ‘Potential experts’ were people who had shown special interest in the subject of ‘sustainable chemistry’ or ‘green chemistry’ by participating in a workshop organised by the OECD in October 1998, or because they had published relevant work on issues such as sustainable/green chemistry, cleaner production, clean technologies, ecoefficiency or similar subjects. The actual expertise of the respondents was evaluated by asking them to auto-assess it for each of the investigated innovation options when completing the questionnaire. Although the inquiry wanted to develop perspectives especially for the European chemical industry, it was decided to include experts from outside Europe in the inquiry. This was done in order to cover forthcoming developments that may be much more relevant for the United States or Japan at the moment but which may also become relevant for Europe. The questionnaire consisted of 13 questions on 36 innovation options. The experts were confronted with a matrix of at least 468 individual questions, which made completing the questionnaire a quite demanding and time-consuming task.

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The object The 36 innovation options were grouped into 9 categories: • • • • • • • • •

system changes (2 options); alternative raw materials (4 options); alternative reagents (1 option); alternatives to solvents (4 options); process engineering (2 options); catalysis (4 options); separation/recycling (3 options); alternative products (11 options); others (5 options).

The innovation options were chosen and defined based on a literature study on problematic areas with respect to ecological efficiency and on technologies that are claimed by their proponents to have the potential for eco-efficiency improvements. The ‘alternative products’ category, which comprises the most important product classes of the chemical industry, was included to screen over the entire range of the industry’s production. Innovation options were not defined in an exclusive way, in fact they are intentionally overlapping in many cases. Furthermore, the experts were asked to suggest additional innovation options and to answer the predefined questions for them also.

The questions Box 7 presents the exact formulation of the questions asked on the innovation options and the possible answers. The questions were related to four topics: • • • •

ecological potential (2 questions); socioeconomic potential (3 questions); realisation in 2010 (1 question); barriers (7 questions).

For the questions on the ecological potential and the socioeconomic potential, the addressees were asked to assume that optimal frame conditions would exist for the development of innovation options, so that their technological potential will be fully exploited. The purpose of this part of the inquiry was to get the experts’ opinion on the effects of a full development of innovation options.

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The ecological potential The first two questions addressed the ecological potential of the innovation options. They were formulated according to the following reasoning: innovation can have a positive or negative ecological impact. A positive impact can be achieved by an improvement in ecological efficiency. This is the case if a new technology produces the same output causing less environmental pressures than the old technology. The positive effect can, however, be overcompensated by the volume effect. If the new technology leads to an increase in market volume, this may cause an increase in ecological pressures due to a higher amount of products or services produced, even if the new technology is more ecoefficient than the one it substitutes. For example, a new polymer with both high ecological efficiency and new useful properties may expand the market for polymers and thus lead to more ecological pressures despite a relatively green production technology. Therefore, the questionnaire asked experts for their opinion on both: •

a possible increase of the technology’s ecological efficiency through innovation; and

•

the expected overall ecological effect of an innovation option, which may be negative if the volume effect is bigger than the efficiency increase.

In order to calibrate the responses, the addressees were asked to try to consider indirect effects and to have the following types of ecological impact or risks in mind: • • • • • •

raw material consumption (including fossil, mineral and renewable raw materials, as well as water); land use; energy consumption; emissions to air and water; solid wastes; risk/hazard by use of toxic/dangerous substances.

The socioeconomic potential Concerning the socioeconomic potential, the questionnaire addressed three aspects: • • •

the expected economic importance or market size if the technological potential is fully utilised; the impact on competitiveness; the impact on employment.

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Box 7: Questions and possible answers presented in the questionnaire Question

Possible answers

Q1: Eco-efficiency

1 2 3 4 5

How would the full development of the technological potential of the innovations influence the ecological efficiency of affected products/processes? Q2: Overall ecological impact How would the full development of the technological potential of the innovations influence the overall ecological impact of the European chemical industry? Q3: Expected economic importance/market size How would the full development of the technological potential of the innovations influence the economic importance/market size of new products/processes? Q4: Expected impact on competitiveness How would the full development of the technological potential of the innovations influence the competitiveness of Europe’s chemical industry? Q5: Expected impact on employment How would the full development of the technological potential of the innovations influence employment in Europe? Q6: Realisation in 2010 Give your opinion on realisation in 2010.

Barriers In case you do not expect a technology to develop its full potential until 2010, to what extent do the following factors hinder its development? •

Q7: Technological feasibility

•

Q8: Structural/industrial/commercial barriers

•

Q9: Lack of research funds

•

Q10: Economic viability

•

Q11: Regulations/policy/standards

•

Q12: Education/skills

•

Q13: Lack of incentives/pressures to be environmentally friendly

= no positive effect = weak positive effect = positive effect = strong positive effect = radical improvement (> factor 4)

– 2 = strong negative effect – 1 = weak negative effect 0 = no effect + 1 = weak positive effect + 2 = strong positive effect 1 2 3 4 5

= just an anecdotal episode = niche demand = important niche demand = market demand = a major source of European added value

1 2 3 4 5

= no positive effect = weak positive effect = positive effect = strong positive effect = brings huge advantages

– 2 = strong negative effect – 1 = weak negative effect 0 = no effect + 1 = weak positive effect + 2 = strong positive effect 1 2 3 4 5

= still only an idea = laboratory scale = pilot plant = first industrial plants = wide industrial application

1 2 3 4 5

= no barrier = insignificant barrier = barrier = important barrier = decisive barrier

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Realisation in 2010 The question on realisation in 2010 aimed to find out to what extent experts expect the new technological options to materialise under realistic conditions until the year 2010. For this, the addressees were asked to assume a scenario without important changes to the current frameworks for science and technology until 2010 (business as usual).

Barriers In case the addressees did not expect a technology to develop its full potential until 2010, they were asked to what extent they believed that the different factors listed in the following would hinder its development: • • • • • • •

technological feasibility; structural/industrial/commercial barriers; lack of research funds; economic viability; regulations/policy/standards; education/skills; lack of incentives/pressures to be environmentally friendly.

Main results Response Some 72 questionnaires were completed and returned. This corresponds to a response rate of 57 %. Not all respondents answered all questions for all innovation options, but most respondents gave answers to a considerable part of it. The average number of answers for one of the 468 fields of the questionnaire matrix was 53, the lowest number of answers for a field was 40 and the highest 67. Respondents came from 14 countries, 9 from the EU and 5 from outside the EU (see Table 2). The over-representation in Austria is due to good personal contacts in this country, which allowed a high number of potential experts to be identified and guaranteed a high response rate. The very low representation in France seems to reflect the hesitant participation of this country in the OECD sustainable chemistry activity, while it is overaverage in Italy. Generally, the number of responses from different countries correlates more or less to the degree of participation in the OECD sustainable chemistry activity. To check for a possible bias, the inquiry has also been evaluated without considering Austrian responses. It turned out that this has only minor effects on detailed results and

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does not affect at all the important findings and conclusions of the inquiry. Furthermore, the answers of respondents from the United States and from Europe have also been analysed separately to get some indication of regional differences in perception. Some diverging tendencies could be identified and are presented further below. However, they have to be understood as rather anecdotal evidence due to the low number of respondents from the United States.

Table 2: Country distribution of respondents EU countries

Austria Germany Italy Netherlands United Kingdom Belgium Sweden France Spain

Number of respondents 14 12 12 4 4 3 3 1 1

Non-EU countries United States Japan Switzerland China Mexico

Number of respondent s 10 4 2 1 1

Table 3: Occupational position of respondents (multiple answers were allowed) Number of respondents Corporate strategy Marketing/business management Production operations Academic research Industrial R & D Research management Other

12 5 1 24 20 16 21

Table 3 reflects the occupational position of the respondents. The clear majority of respondents come from research-related activities, a minority from corporate strategy and marketing/business management. The answers are, of course, only characteristic for this very group of respondents and are not representative for any consensus of opinion on a broader level. The group does, however, constitute a very interesting and relevant community with respect to the subject, as it brings together some of the most active and renowned experts in the field of sustainable chemistry.

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Expertise The addressees were asked to auto-assess their expertise for each of the 36 innovation options. They could tick one of five categories of expertise: unfamiliar, casually acquainted, familiar, knowledgeable, expert. For the evaluation of the questionnaire, only those responses were considered for which the respondents considered themselves at least familiar with the innovation option. Based on this criterion, 52 % of all responses to individual innovation could be considered for evaluation. However, the expertise varied widely between different innovation options. For the option with highest expertise (closing/interlinking of material flows and recycling) 76 % of all responses could be considered; for the option with lowest expertise (microwave chemistry), however, only 28 %. When we look at groups of innovation options, we see that there are four groups with relatively high expertise of respondents: system changes (70 % familiar and higher), process engineering (67 %), alternative reagents (65 %), and alternatives to solvents (64 %). Expertise was average for alternative raw materials (54 %), and relatively low for alternative products (47 %), others (46 %), catalysis (45 %), and separation (46 %).

The ecological potential of the innovation options Several of the investigated innovation options have the potential for a strong positive effect on the overall ecological impact of Europe’s chemical industry. None of the options entails negative ecological effects (see the categorisation presented in Box 8). High eco-efficiency of an individual option does not automatically mean a strong positive effect on the overall ecological impact. (See, for example, new marine antifoulants, which are ranked first for eco-efficiency (see Table 4) but are expected to have only a low overall positive impact.) This can be due to the fact that the market share of substitution is expected to be low or that the volume effect is expected to overcompensate eco-efficiency improvements. The most interesting innovation options from an ecological point of view are alternative synthetic pathways, heterogeneous catalysis and services instead of products (33). Biocatalysis, which is generally seen as a future key technology, is also regarded as having a considerable potential for (weak to strong) positive ecological effects, although to a lower extent than the three options listed above. Other options with a similar potential to biotechnology are: closing/interlinking of material flows and recycling; (33)

‘Services instead of products’ was included in the questionnaire in order to consider developments such as servicising or offering product services. This means that products are indispensable as a component of a service, and not that services are provided without products, which obviously would not make any sense in the context of the chemical industry.

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solvent-free reactions, solid phase reactions (34); new solvents and cleaning agents; new refrigerants; new detergents/surfactants; and use of innocuous reagents. Nanotechnology, which is generally seen as a possible future key technology, is expected to have the potential for only weak positive ecological effects. Experts agree to a large extent that the use of renewable raw materials promises less in terms of eco-efficiency than most of the other innovation options.

Box 8: Categorisation of innovation options according to the expected effect on the overall ecological impact of Europe’s chemical industry (35) Ecology category 1: Strong positive effects Percentage of experts expecting a strong positive effect Alternative synthetic pathways Heterogeneous catalysis Services instead of products

62 50 50

Ecology category 2: Weak to strong positive effects

Closing/interlinking of material flows and recycling Solvent-free reactions, solid phase reactions Biocatalysis New solvents and cleaning agents New refrigerants New detergents/surfactants Use of innocuous reagents

Percentage of experts expecting a weak positive effect

Percentage of experts expecting a strong positive effect

52 50 49 49 48 54 48

41 42 40 40 39 38 37

Ecology category 3: Weak positive effects All innovation options not listed under categories 1, 2 or 4 belong to this category.

Ecology category 4: No effects to weak positive effects

Microwave chemistry New drugs New polymers

(34) (35)

Percentage of experts expecting no effect

Percentage of experts expecting a weak positive effect

50 40 36

45 30 41

This term was used in the questionnaire. As pointed out in a comment by Prof. Gerd Kaupp, it may have been more appropriate to call the innovation option ‘solid phase/state reactions’. Assuming that the technological potential of the innovation options will be fully exploited.

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Table 4: Eco-efficiency: ranking of innovation options with the highest percentage of qualified respondents expecting a strong positive effect on eco-efficiency or even a radical improvement (> factor 4) % 1. New marine antifoulants 2. New solvents and cleaning agents 3. Solvent-free reactions, solid phase reactions 4. Alternative synthetic pathways 5. Services instead of products 6. New pesticides 7. New detergents/surfactants 8. Biocatalysis 9. New refrigerants 10. Heterogeneous catalysis

77 77 72 71 70 70 70 70 68 66

30. Extended use of cellulose as feedstock 31. Improved separation through microporous systems 32. Alternative organic solvents 33. Optimisation of established processes 34. Extended use of lignin as raw material 35. Extended use of chromatographic separation 36. Microwave chemistry

39 39 33 32 26 25 20

The socioeconomic potential of the innovation options The results on economic importance/market size and competitiveness have a strong correlation. So innovation options enhancing competitiveness are also expected to become important in terms of market size. Generally, qualified respondents see at least the potential of a niche demand for all 36 innovation options. It is noticeable that mainly product innovations are expected to become important in market terms. This may be at least partly due to the simple fact that products are closer to the market than processes. New drugs are seen as the innovation option with by far the biggest potential to become a major source of European added value. Of the non-product-related innovation options, information technology, heterogeneous catalysis, alternative synthetic pathways and services instead of products have the highest potential to become economically important. It is expected that these will find a market demand or even become a major source of European added value. The expectations for biocatalysis are not very clear and there is a broad distribution of expert responses. The use of renewable raw materials is an option which is estimated to have a relatively low market potential if compared with other innovation options, although it is still

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expected to have the potential to satisfy an important niche demand or even a market demand. The same applies to nanotechnology. Closing/interlinking of material flows and recycling does not turn out to be especially interesting with respect to competitiveness, while the more radical alternative synthetic pathways are rated quite high. (This is in accordance with a similar trend for economic importance/market size.) According to the answers of qualified respondents for economic importance/market size, the innovation options can be grouped into five categories, as presented in Box 9. The ranking concerning effects on competitiveness is presented in Table 5. As regards employment effects, the general finding is that for almost all innovation options no effects or weak positive effects are expected. There are only two exceptions. Weak to strong positive effects are expected for services instead of products, as well as for information technology. While it seems that there is an expectation that increased competitiveness through innovation can at least compensate possible negative employment effects resulting from increases in efficiency, it is clear that deeper analysis is needed to better understand this issue.

Table 5: Competitiveness: ranking of innovation options with the highest percentage of qualified respondents rating them to bring a strong positive effect or a huge advantage to the European chemical industry % 1. New polymers 2. New drugs 3. Heterogeneous catalysis 4. Information technology 5. New pesticides 6. Molecular design 7. Alternative synthetic pathways 8. New fertilisers 9. New coatings/dyes 10. Biocatalysis

75 73 70 67 66 63 62 61 59 58

27. Extended use of waste as raw material 28. New refrigerants 29. Closing/interlinking of material flows and recycling 30. Extended use of chromatographic separation 31. Extended use of starch as feedstock 32. Alternative organic solvents 33. Liquid/supercritical CO2 as solvent 34. Extended use of cellulose as feedstock 35. Microwave chemistry 36. Extended use of lignin as raw material

33 32 32 30 24 24 23 21 15 10

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Box 9: Categorisation of innovation options according to their economic importance/market size potential (36) Economy category 1: A major source of European added value Percentage of experts expecting the option to become a major source of European added value New drugs

47 (37)

Economy category 2: Market demand or even a major source of European added value

Information technology New polymers Heterogeneous catalysis Alternative synthetic pathways New pesticides Services instead of products

Percentage of experts expecting the option to find a market demand

Percentage of experts expecting the option to become a major source of European added value

41 49 41 33 54 45

41 40 38 38 35 33

Economy category 3: Market demand Percentage of experts expecting the option to find a market demand New solvents and cleaning agents New refrigerants New coatings/dyes New marine antifoulants New detergents/surfactants New adhesives New fertilisers Optimisation of established processes New blowing agents Water instead of organic solvents Improved separation through membranes Microporous catalysis Molecular design Extended use of waste as raw material New process technology Biomimetics Solvent-free reactions, solid phase reactions Extended use of chromatographic separation Biocatalysis

(36) (37)

67 65 61 59 58 57 56 55 55 49 49 48 46 46 45 44 43 41 39

Assuming that the technological potential of the innovation options is fully exploited. The consensus of expert opinion is relatively low for this innovation option. The classification can therefore be tentative only.

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Box 9: Categorisation of innovation options according to their economic importance/market size potential (continued) (38) Economy category 4: Important niche demand or even a market demand

Improved separation through microporous systems Extended use of starch as feedstock Closing/interlinking of material flows and recycling Extended use of cellulose as feedstock Extended use of lignin as raw material Liquid/supercritical CO2 as solvent Use of innocuous reagents Nanotechnology

Percentage of experts expecting the option to find an important niche demand

Percentage of experts expecting the option to find a market demand

39 38 34 34 42 37 30 33

46 47 45 39 32 33 37 33

Economy category 5: Niche demand or even an important niche demand

Microwave chemistry Alternative organic solvents (39)

Percentage of experts expecting the option to find a niche demand

Percentage of experts expecting the option to find an important niche demand

30 35

30 27

Realisation in 2010 The addressees were asked to foresee the degree of realisation of the innovation options for the year 2010 in a business-as-usual scenario. The results can be used to group the innovation options into six categories (see Box 10). They show that some innovation options are not expected to find wide realisation in a business-as-usual scenario, even if their market potential is high (e.g. alternative synthetic pathways). This points at the existence of important barriers to their development. Barriers Seven different types of barrier were investigated in order to understand what can hinder the full development of the potential of individual innovation options. Appendix A refers to detailed findings about barriers for a number of specific innovation options. Here we have calculated an average value over all seven barrier types in order to obtain a simple measure for the general size of difficulties that can be expected for the utilisation of innovation options. Table 6 gives a ranking of the innovation options with the highest and

(38) (39)

Assuming that the technological potential of the innovation options is fully exploited. Experts are divided on this innovation option: 29 % see the chance to find a market demand.

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lowest barriers. Generally, we see that innovation options that are expected to be realised to a relatively low extent in 2010 are faced with relatively high barriers. Table 7 presents a ranking of the innovation options with respect to technological feasibility. Box 10: Categorisation of innovation options according to realisation expectations for 2010 Realisation category 1: Wide industrial application Percentage of experts expecting wide industrial application Information technology Optimisation of established processes Heterogeneous catalysis

65 61 59

Realisation category 2: First industrial plants or wide industrial application

Improved separation through membranes Closing/interlinking of material flows and recycling New refrigerants New blowing agents New drugs New coatings/dyes New detergents/surfactants Services instead of products Alternative organic solvents

Percentage of experts expecting first industrial plants

Percentage of experts expecting wide industrial application

47 40 42 44 56 39 44 42 45

44 44 38 33 44 35 39 33 34

Realisation category 3: First industrial plants Percentage of experts expecting first industrial plants Liquid/supercritical CO2 as solvent New solvents and cleaning agents New polymers Extended use of starch as feedstock Extended use of cellulose as feedstock New pesticides New marine antifoulants New fertilisers Use of innocuous reagents Biocatalysis Alternative synthetic pathways New process technology Water instead of organic solvents New adhesives Extended use of waste as raw material (40)

66 61 56 55 54 53 53 53 49 (40) 46 46 45 43 42 38

The consensus of expert opinion is relatively low for this innovation option. The classification can therefore be tentative only.

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Box 10: Categorisation of innovation options according to realisation expectations for 2010 (continued) Realisation category 4: Pilot plant or first industrial plant stages

Improved separation through microporous systems Microporous catalysis Extended use of chromatographic separation

Percentage of experts expecting pilot plants

Percentage of experts expecting first industrial plants

43 39 32

39 39 39

Realisation category 5: Pilot plant level Percentage of experts expecting pilot plants Microwave chemistry Biomimetics Solvent-free reactions, solid phase reactions

53 9 48 9 41

Realisation category 6: Laboratory scale or pilot plants or first industrial plants (low expert consensus)

Extended use of lignin as raw material Molecular design Nanotechnology

Percentage of experts expecting laboratory scale

Percentage of experts expecting pilot plants

Percentage of experts expecting first industrial plants

26 23 32

37 32 26

30 26 37

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Table 6: Average importance of barriers: the average percentage of experts regarding the different factors as a barrier, important barrier or decisive barrier % 1. Microwave chemistry 2. Biomimetics 3. Extended use of lignin as raw material 4. Nanotechnology 5. New solvents and cleaning agents 6. Alternative synthetic pathways 7. Extended use of waste as raw material 8. Molecular design 9. Biocatalysis

75 69 68 65 65 65 65 64 64

29. Alternative organic solvents 30. Extended use of starch as feedstock 31. Heterogeneous catalysis 32. Services instead of products 33. Improved separation through membranes 34. Extended use of chromatographic separation 35. Information technology 36. Optimisation of established processes

52 51 49 47 45 41 40 35

Table 7: Technological feasibility as a barrier: percentage of experts regarding technological feasibility as a barrier, important barrier or decisive barrier % 1. Nanotechnology 2. New blowing agents 3. Molecular design 4. Biomimetics 5. Extended use of lignin as raw material 6. Microwave chemistry 7. Solvent-free reactions, solid phase reactions 8. New solvents and cleaning agents

84 82 81 79 79 78 76 69

30. Heterogeneous catalysis 31. Information technology 32. Closing/interlinking of material flows and recycling 33. Extended use of starch as feedstock 34. Alternative organic solvents 35. Optimisation of established processes 36. Services instead of products

45 42 42 41 37 22 19

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Matrix classification of innovation options Based on the results presented in the preceding sections, we can classify the innovation options by applying four main criteria at the same time: • • • •

ecological potential; economic potential; expected realisation in 2010; technological feasibility.

The aim of this exercise is to identify innovation options that can give an especially important contribution to sustainable development and for which focused policy intervention may give an important stimulus. In this context, ecologically and economically promising innovation options that are not expected to find wide industrial application in the medium term despite good technological feasibility deserve special attention. The ecological potential and the economic potential form the two dimensions of the innovation option matrix presented in Table 7. Innovation options are highlighted in red if more than 75 % of qualified experts see technological feasibility as a barrier, important barrier, or decisive barrier. Innovation options are highlighted in dark blue if experts think that they will find wide industrial application in 2010 anyway (in a business-asusual scenario) and they are highlighted in light blue if experts believe that they will be realised at least in first industrial plants. As a general tendency, we see that there is a quite strong correlation between the ecological and economic potential of the investigated innovation options. Only few exceptions to this rule can be found for some technologies that are economically very promising, but do not have a very big ecological potential (new drugs, new polymers; to a lesser extent information technology and new pesticides). Deviations from the rule are even less important in the other half of the matrix, where just closing/interlinking of material flows and recycling as well as use of innocuous reagents seem somewhat better ecologically than economically. A detailed analysis of the matrix is presented in the following section.

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Table 7: Innovation options matrix Ecology category 1 Strong positive effects

Economy category 1 A major source of European added value Economy category 2 Market demand or even a major source of European added value Economy category 3 Market demand

Economy category 4 Important niche demand or even a market demand

Economy category 5 Niche demand or even an important niche demand

Ecology category 2 Weak to strong positive effects

Ecology category 3 Weak positive effects

Ecology category 4 No effects to weak positive effects New drugs

Alternative synthetic pathways Heterogeneous catalysis Services instead of products

Information technology New pesticides Solvent-free reactions, solid phase reactions Biocatalysis New solvents and cleaning agents New refrigerants New detergents/surfactants

Closing/interlinking of material flows and recycling Use of innocuous reagents

New coatings/dyes New marine antifoulants New adhesives New fertilisers Optimisation of established processes New blowing agents Water instead of organic solvents Improved separation through membranes Microporous catalysis Molecular design New process technology Extended use of waste as raw material Biomimetics Extended use of chromatographic separation Improved separation through microporous systems Extended use of starch as feedstock Extended use of cellulose as feedstock Extended use of lignin as raw material Liquid/supercritical CO2 as solvent Nanotechnology Alternative organic solvents

New polymers

Microwave chemistry

More than 75 % of the qualified experts see technological feasibility as a barrier, important barrier, or decisive barrier. In a business-as-usual scenario, the innovation option will find wide industrial application in 2010. In a business-as-usual scenario, the innovation option will be realised in first industrial plants or find wide industrial application in 2010.

Part II.B — Specific study ‘Expert inquiry on innovation options for sustainable development’

Findings from the matrix classification Of the investigated innovation options, there are clearly three which have an especially high potential to contribute to sustainable development by combining both high ecological and economic potentials: • • •

alternative synthetic pathways; heterogeneous catalysis; services instead of products.

Alternative synthetic pathways (see Box 3 for an example) has been identified as the most promising innovation option to improve the ecological efficiency and performance of the European chemical industry. It will have a strong positive effect if its technological potential is fully utilised. It has the potential to find a market demand or even to become a major source of European added value and would bring a strong positive effect or even a huge advantage for the competitiveness of the European chemical industry. Technological feasibility and economic viability are above average when compared with other options. However, there are important barriers to the development and diffusion of this innovation option. In a business-as-usual scenario, alternative synthetic pathways are therefore foreseen to be realised only in first industrial plants in 2010. The barriers, however, would to a large extent be susceptible to policy action. The highest ranked barriers are a lack of incentives/pressures to be environmentally friendly, a lack of research funds, and structural/industrial/commercial barriers. The ecological potential of heterogeneous catalysis (see Box 4 for description) is ranked as second highest and its market potential is comparable to that of alternative synthetic pathways. There is an especially high incidence of expert opinions that it can bring a strong positive effect or a huge competitive advantage to the European chemical industry. In contrast to alternative synthetic pathways, heterogeneous catalysis is expected to find wide industrial application in 2010, even in a business-as-usual scenario. The supply of services instead of products (see Box 5 for description) is the third innovation option with the potential of strong positive effects on the overall ecological impact of the European chemical industry. It has about the same good market potential as alternative synthetic pathways and heterogeneous catalysis. Of all the innovation options, it has the best ranking as regards employment effects. Generally, barriers to its realisation are seen as relatively low; technological feasibility and economic viability especially are not significant barriers. However, the option is faced with important structural/industrial/commercial barriers and with a lack of respective education/skills. In a business-as-usual scenario, it is expected that this innovation option will first find wide industrial application in 2010. The following options also seem promising from both the ecological and economic point of view, although to a lesser extent than the three priority innovation options discussed

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above: solvent-free reactions, solid phase reactions; biocatalysis; new solvents and cleaning agents; new refrigerants; and new detergents/surfactants. The extended use of renewable raw materials (more specifically starch, cellulose or lignin) could not be identified as an especially promising strategy for the chemical industry. Experts do not see the potential to find more than a niche demand and expect only weak positive ecological effects. More detailed findings concerning some individual innovation options can be found in Appendix A (Boxes 11 to 16).

Some more perspectives Additional innovation options suggested by respondents The respondents were asked to propose additional innovation options to those suggested in the questionnaire; 23 respondents made use of this possibility and suggested 44 further innovation options. The suggested options are quite diverse and do not present a lot of overlap with each other. They are listed in Appendix B.

Private business and academia The question arises as to whether business representatives have other opinions about the issues of this inquiry than the respondents from academia. For this purpose, the answers of both groups of respondents have been evaluated separately. In the business group, those respondents have been considered that had indicated an occupational position in corporate strategy, marketing/business management, production operation or industrial R & D (38 respondents in all). The business group comprises those respondents that had indicated a position in academic research (24 respondents). Some of the respondents had positions in both business and academia and were considered in both groups (13 respondents). Respondents who only specified a position in research management or ‘other’ could not be considered in either group (23 respondents). In general terms, when we look at the average of all innovation options, business respondents turn out to be somewhat more optimistic about what concerns strong positive effects on the overall ecological impact as well as strong positive effects on competitiveness, and on wide industrial application in 2010 (difference 5 to 6 % of total response). Academia, on the other hand, is a little more optimistic concerning positive employment effects; 32 % of business think that existing regulations/policies/standards are no barrier, while only 19 % of academics share this attitude. A lack of education/skills is seen as a higher barrier by academia than by business. Apart from this there are no diverging tendencies that would be valid for all or most innovation options.

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Alternative synthetic pathways are seen in a concurring way by both groups, but academia is somewhat more optimistic concerning realisation in 2010 (a high percentage of business respondents expect realisation only in pilot plants). Some divergence can be detected concerning the opinion about services instead of products. While academia sees it as the absolute top option with respect to the positive ecological effects, business is a little less enthusiastic from the ecological point of view and expects weak to strong positive effects (category 2). On the other hand, as regards realisation in 2010, academia is clearly more pessimistic than business and expects pilots rather than wide industrial application. So, in simple language, one could formulate that academia sees a big ecological potential but does not expect it to be utilised, while industry is more cautious concerning the ecological benefits of a development from products to services that will be realised to quite some extent anyway. Research activities and especially enhanced discussion between industry and academia are needed to clarify this issue and to understand better the relationships between eco-efficiency and a trend towards services (41). Heterogeneous catalysis is largely evaluated identically by business and academia, with a small divergence with regard to economic importance/market size potential, where academia sees a clear market demand, while business tends to expect the technology to become a major source of European added value. Within the business group, those active in corporate strategy or marketing/business management are, however, clearly more pessimistic about this option, especially concerning its ecological benefits. Business expects a little more from biocatalysis than academia in terms of competitiveness and it sees the potential for strong positive ecological effects while academia talks about weak positive effects. Also, information technology is evaluated better by business than by academia. In this case, business sees the potential for the technology to be a major source of European added value and a high percentage sees the possibility of strong positive ecological effects. This is especially true for those respondents from business that are active in corporate strategy or marketing/business management. The lack of optimism concerning renewable raw materials in terms of ecological and economic effects is especially clear among business respondents but academia does not see it as an especially promising option either. Molecular design, biomimetics and new marine antifoulants are three innovation options which are clearly better ranked by academia concerning positive competitiveness effects than by business.

(41)

The IPTS is currently participating in a European research project on eco-efficient producer services.

85

Part II.B — Specific study ‘Expert inquiry on innovation options for sustainable development’

The viewpoint of respondents from the United States It is not possible to get statistical evidence on different opinions of the respondents from Europe and the United States, because only 10 responses were received from the latter and only an average of 8 responses could be considered for individual innovation options according to the expertise criterion. However, the group of American respondents includes some of the country’s most recognised experts in sustainable or green chemistry and so it seems worthwhile to report some special characteristics of this response population sub-group as an anecdotal indication of possible differences in perception between the regions. Compared with the European response population, the American respondents are more optimistic as regards both the ecological and economic potential of the innovation options. On average, they expect that 35 % of the innovation options will have strong positive effects on the overall ecological impact and that 23 % of the options can bring radical improvements in eco-efficiency (Europeans 25 % and 13 %). The American respondents are also more optimistic with respect to the potential economic importance/market size of the innovation options, where they expect that 25 % of the innovation options can become a major source of European added value (Europeans 19 %). This contrasts to the finding that the American respondents are less optimistic about realisation in the year 2010. On average, Americans expect that only 58 % of the innovation options will be applied in first industrial plants or find wide industrial application. The corresponding value is 72 % for European respondents. This indicates that the American respondents are clearly less confident that Europe can utilise the technological potential for innovation than the European respondents. While there is coincidence between American and European respondents that alternative synthetic pathways, service instead of products and heterogeneous catalysis have the potential for strong positive effects on ecological impacts, the Americans additionally see such high potential for new solvents and cleaning agents; new detergents/surfactants; the closing/interlinking of material flows and recycling; and especially for solvent-free reactions, solid phase reactions. As regards information technology, the Americans are less optimistic for both potential economic importance/market size as well as realisation in Europe in 2010 than the Europeans. On the other hand, they clearly see more market potential for biocatalysis, for which all eight American respondents with higher expertise expect more than a niche demand (Europe only 56 %).

Check concerning expert bias Specialists in a certain field may have a particular viewpoint. They have a very deep understanding of certain aspects and so their judgment can be extremely well founded. On the other hand, they may tend to be especially optimistic about the potential of this field. For this reason, it was checked how the opinion of those respondents who classified 86

Part II.B — Specific study ‘Expert inquiry on innovation options for sustainable development’

themselves as experts for a certain innovation option influences the results of the analysis. It turns out that the experts are indeed more optimistic than those respondents that rate themselves as knowledgeable or casually acquainted with an innovation option. The percentage of experts that chose the most optimistic answer to the questions on the ecological and economic effects is around 10 % higher than for the entire population of respondents that were considered in the evaluation. Barriers are seen as somewhat less important by the absolute experts than by the other respondents, with the exception of education/skills, which is regarded as more important by the experts. This sort of bias, however, only has a very low impact on the results of the analysis due to the fact that the percentage of respondents that rate themselves as experts for an innovation option is low (7 % of the entire population of respondents). If we exclude for each innovation option those respondents that have rated themselves as experts from the evaluation, this changes the categorisation of the innovation options only slightly and in very few cases. New drugs drop from realisation category 2 to 3. The ecological categorisation of new drugs becomes less clear. Alternative synthetic pathways drop from economy category 2 to 3, and the realisation potential of nanotechnology for 2010 is seen slightly more optimistically. Apart from these changes, the categorisation is the same whether the opinion of supposed specialists is considered or not.

Conclusions The inquiry carried out a systematic screening to find starting points for efforts to make Europe’s chemical industry fit for sustainable development. It has identified a number of innovation options for the chemical industry which have the potential for strong positive effects on the ecological impact of this industry. These options have, at the same time, a big market potential and promise to improve considerably the competitiveness of Europe in this field. However, for some of the most promising options there are important barriers that prevent the utilisation of their full potential if business as usual is continued. In these areas, it will be especially useful to perform in-depth analyses of the innovation environment for the identified opportunities and of possible mechanisms to facilitate them. Such an exercise should involve all important players in the innovation system, especially also industry. Alternative synthetic pathways are an innovation option that deserves special attention because it is very promising in economic and ecological terms and seems at the same time adaptable to facilitating measures. More information needs to be collected on the technological, economic and ecological characteristics of concrete processes and technologies related to specific new pathways. The very generic term used in the questionnaire comprises a wide range of routes for the transformation of substances and materials and requires specification. Based on a closer definition, it should be analysed to what extent alternative synthetic pathways are actually emerging as new technologies and with which diffusion environment they are confronted at the business, industry- and economy-wide levels. The relationships between pre-competitive research, corporate R &

87

Part II.B — Specific study ‘Expert inquiry on innovation options for sustainable development’

D and industrial realisation of new pathways should be explored. Barriers and drivers have to be analysed more closely, and mechanisms should be investigated through which diffusion can be accelerated. Comparisons between the situations in the United States, Japan and Europe could bring interesting insights. Enlargement is a crucial aspect of the European situation. Heterogeneous catalysis is a technology that is already widely used and still has considerable potential for further diffusion. The position of Europe in this field in comparison with its main competitors should be clarified in order to assess the need for additional efforts in order to make use of the double dividend promised by this technology. A number of projects have already been carried out which have investigated a shift from supplying services instead of products in the chemical industry. There is still, however, the need for a systematic appreciation of the importance of this approach within the structure of the European and other chemical industries and of its market potential. This would be the base that allows the development of sector-specific policy implications. Special attention should be paid to frameworks that ensure that shifts from products to services are carried out in a way that allows the ecological potential of this approach to be exploited in an optimal manner.

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Part II.B — Specific study ‘Expert inquiry on innovation options for sustainable development’

Appendix A: Detailed findings for selected innovation options Box 11: Highlights concerning alternative synthetic pathways ½

Alternative synthetic pathways are the most promising innovation option to improve the ecological efficiency and performance of the European chemical industry.

½

Alternative synthetic pathways have a high potential to become important in terms of market size.

½

Alternative synthetic pathways can make an important contribution to the competitiveness of Europe’s chemical industry.

½

The use of alternative synthetic pathways is expected to have slightly positive employment effects, but is not among the options with the strongest positive employment effects.

½

In a business-as-usual scenario, it is expected that in 2010 there will be first industrial plants based on alternative synthetic pathways.

½

The most important barrier to fully develop alternative synthetic pathways is a lack of incentives/pressures to be environmentally friendly, followed by a lack of research funds and by structural/industrial and commercial barriers. Existing regulation and technological feasibility are the least important barriers.

½

Compared with other innovation options, technological feasibility and economic viability are above average for alternative synthetic pathways.

½

The expertise of respondents is very high for alternative synthetic pathways when compared with other innovation options. This is especially due to the fact that the number of respondents rating themselves as experts is by far the highest for this innovation option, while there are also a considerable number of respondents that are only casually acquainted or familiar with the issue.

½ The interest of respondents seems to be high in alternative synthetic pathways. This innovation option has the third highest (out of 36) response rate.

89

Part II.B — Specific study ‘Expert inquiry on innovation options for sustainable development’

Box 12: Highlights concerning services instead of products ½

71 % of qualified respondents expect strong positive effects on eco-efficiency or radical improvement (ranking 5).

½

A strong positive effect on the overall ecological impact of the European chemical industry is expected by 50 % of qualified respondents (ranking 3).

½

Services instead of products have the potential to satisfy a market demand or to become a major source of European added value.

½

Respondents are divided about the effect on competitiveness, but the services instead of products option has the highest percentage of qualified respondents rating it as having the potential to bring a huge advantage (30 %).

½

A weak to strong positive employment effect is expected. It is the innovation option with the best ranking for employment.

½

In 2010, the supply of services instead of products will be between first industrial plants and wide industrial application (although the wording is not very suitable here).

½

47 % of qualified respondents see important or decisive structural/industrial/commercial barriers (ranking 2).

½

82 % of qualified respondents believe that technological feasibility is no barrier or only an insignificant barrier (ranking 1).

½

64 % of respondents with higher expertise believe that economic viability is no barrier or only an insignificant barrier (ranking 3).

½

Generally, the barriers are relatively low (e.g. compared with alternative synthetic pathways).

Box 13: Highlights concerning heterogeneous catalysis ½

50 % of qualified respondents see the potential of a strong positive effect on the overall ecological impact (ranking 2).

½

Heterogeneous catalysis has the potential to satisfy a market demand or even become a major source of European added value.

½

70 % of qualified respondents say that heterogeneous catalysis can bring a strong positive effect or a huge advantage to European competitiveness (ranking 3).

½

Wide industrial application is foreseen for 2010.

½ Generally, barriers are seen as low.

90

Part II.B — Specific study ‘Expert inquiry on innovation options for sustainable development’

Box 14: Highlights concerning biocatalysis ½

70 % of respondents with higher expertise believe that it has the potential for strong positive effects or radical improvements in eco-efficiency (ranking 6).

½

With respect to the overall ecological impact, the respondents’ opinion is a little less positive. Some 40 % expect strong positive effects.

½

It is an innovation option with the potential to satisfy a market demand (expected to be slightly less important than heterogeneous catalysis).

½

Fair ranking concerning competitiveness (10).

½

Foreseen to be realised in first industrial plants in 2010.

Box 15: Highlights concerning new solvents and cleaning agents ½

69 % of qualified experts see technological feasibility as a barrier, important barrier or decisive barrier (ranking 8).

½

Generally, barriers are seen as high, especially regulations/policy/standards, which is regarded as a low barrier in most other cases, and structural/industrial/commercial barriers.

½ Of the alternative products category of innovation options, it is the one which is most promising in ecological terms, but at the same time is faced with the highest barriers.

Box 16: Highlights concerning closing/interlinking of material flows and recycling ½

For this innovation option, the highest expertise (85 % of respondents familiar or more) could be found.

½

It is ranked 13th with respect to eco-efficiency (63 % of respondents seeing potential for strong positive effects or radical improvement). The innovation option is promising with respect to overall ecological impact (52 % see potential for weak positive effects and 41 % for strong positive effects).

½

However, it is only average with respect to economic importance/market size potential. And it is below average as regards expected competitiveness effects.

½

Industry-wide application is expected in 2010.

91

Part II.B — Specific study ‘Expert inquiry on innovation options for sustainable development’

Appendix B: List of further innovation options suggested by respondents (reproduction of original wording) 100 % yield by gas/solid reactions: no solvent, no workup 100 % yield by solid/solid reactions: no solvent, no workup Alternative energy use Alternative source — (raw) — materials (e.g. plants, fibres, renewable resources, etc.) Approach to using CO2 soluble polymers + adhesives to enable CO2 sol. to be used Biomass into energy conversion Biotechnology (genetic engineering) Carbon sequestration Chitin/chitosan Colours, dyes, renewables Composites from renewable raw materials Composites of metal and organic fibres Direct electrochemical processes for organic and inorganic synthesis Distributed processing — mf. at site of use Extended use of oils + fats as raw materials Extraction of metals Fluorous phase and aqueous soluble homogeneous catalysis (two-phase catalysis) Gaseous phase polymerisation Heterogeneous catalysis in conjunction with ultrasound or microwave activation Homogeneous catalysis Indirect electrochemical processes — complexes for asymmetric synthesis Indirect electrochemical processes — transition metal ion complexes as reagents & catalysts Indirect electrochemical processes — transition metal ions as reagents in water Intensified processes, e.g. micro-reactors intensive conditions Light protection, antioxidants, renewables Metrics for environmental impact and improvement need to be established to guide industry, regulators and society Multiple cascade reactions with high yield New innovation strategies (e.g. eco-design, ecotechnology) New insulation New management systems (e.g. learning organisation) New process strategies (e.g. cascadic use, zero emission, aquaculture) No conservation/disinfecting, renewables Photocatalysis (Hydrocarbon Activation) Photo-voltaic cells Process synthesis in combination with industrial ecology design methods Risk description of processes Risk description of products Robotics and automation in process optimisation Solvent-free microwave chemistry with mineral oxides or supported reagents Sustainable agr. (combination of many concepts practices & technologies) Systems engineering Tools for early economic and ecological assessment of products & processes Use of solar energy in chemistry Water-saving technologies

92

Appendix C: Population of answers by qualified respondents in per cent Number of lifi d respondents

Question number Possible answers (see Box 7 for verbalisation)

Eco-efficiency

Overall ecological impact

Economic importance/ market size

Competitiveness

Employment

Realisation in 2010

1

2

Q1 3

4

5

-2

-1

Q2 0

+1

+2

1

2

Q3 3

4

5

1

2

Q4 3

4

5

-2

-1

Q5 0

+1

+2

1

2

Q6 3

4

5

0

2

33

62

0

7

22

33

38

2

13

22

40

22

0

7

36

43

14

0

2

29

46

22 44

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46

2

2

24

47

24

2

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55

0

13

24

50

13

2

0

6

52

41

0

9

34

45

11

4

23

42

28

4

2

7

35

50

6

2

0

14

40

([WHQGHGXVHRIFHOOXORVHDVIHHGVWRFN

39

5

13

42

24

16

0

11

24

51

14

3

13

34

39

11

16

18

45

16

5

0

3

49

46

3

0

9

31

54

6

([WHQGHGXVHRIVWDUFKDVIHHGVWRFN

35

3

18

32

38

9

0

9

24

45

21

0

9

38

47

6

12

12

52

21

3

0

3

36

58

3

0

6

26

55

13

([WHQGHGXVHRIOLJQLQDVUDZPDWHULDO

31

3

26

45

23

3

0

10

27

53

10

3

16

42

32

6

13

23

55

6

3

0

3

57

37

3

4

26

37

30

4

([WHQGHGXVHRIZDVWHDVUDZPDWHULDO

51

4

12

25

39

20

2

2

12

51

33

0

16

24

46

14

4

20

43

27

6

2

2

26

57

13

2

6

28

38

26

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47

4

15

26

41

13

2

0

13

48

37

0

15

30

37

17

7

22

33

31

7

0

2

62

27

9

0

9

23

49

19

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36

0

6

22

42

31

0

3

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50

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29

44

12

0

3

42

48

6

0

15

41

29

15

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47

4

11

38

30

17

0

4

20

61

15

0

22

37

33

9

7

30

41

16

7

0

5

63

26

7

0

5

18

66

11

:DWHULQVWHDGRIRUJDQLFVROYHQWV

52

6

10

33

39

12

2

6

16

61

16

0

14

29

49

8

8

24

30

34

4

2

0

63

31

4

2

7

22

43

26

$OWHUQDWLYHRUJDQLFVROYHQWV

49

4

22

41

29

4

2

0

42

50

6

0

35

27

29

8

11

22

43

24

0

0

2

64

33

0

0

7

14

45

34

1HZSURFHVVWHFKQRORJ\

44

0

11

32

43

14

0

0

11

61

27

0

5

29

48

19

2

12

37

39

10

0

10

37

49

5

3

3

25

45

25

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53

0

17

51

26

6

0

0

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51

25

0

10

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55

12

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33

12

6

6

51

31

6

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29

61

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38

5

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42

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0

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9

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59

0LFURSRURXVFDWDO\VLV

28

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52

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44

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20

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68

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53

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39

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70

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31

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58

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65

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53

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7

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22

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59

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0

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58

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67

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61

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36

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6

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53

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42

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0

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51

41

3

0

22

42

33

Appendix C: Population of answers by qualified respondents in per cent (continued) Number of respondents

Barrier: technological feasibility

Structural/industrial/ commercial barriers

Barrier: lack of research funds

4

5

Barrier: lack of incentives/pressures to be environmentally friendly Q13 1 2 3 4 5

$OWHUQDWLYHV\QWKHWLFSDWKZD\V

46

14

35

33

16

2

5

26

33

31

5

5

20

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28

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52

7

7

22

22

32

20

5

10

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10

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20

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55

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31

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2

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4

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27

42

11

0

17

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30

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6

32

17

23

19

9

20

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17

2

9

21

28

28

15

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39

17

33

31

19

0

3

29

37

23

9

6

34

34

20

6

9

23

26

34

9

31

31

17

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Question number Possible answers (see Box 7 for verbalisation)

Barrier: economic viability

Barrier: regulations/policy/ standards

Barrier: education/skills

1

2

Q7 3

4

5

1

2

Q8 3

4

5

1

2

Q9 3

4

5

1

2

Q10 3

4

5

1

2

Q11 3

4

5

1

2

Q12 3