“The bioeconomy offers great opportunities for the European chemical industry to create new products, diversify its raw material base and reduce its dependence on non-renewable resources”. To say it – in this long exclusive interview with Il Bioeconomista – is Daniele Ferrari, CEO Versalis, the Chemical Division of Italian oil giant ENI, and President CEFIC, the European Chemical Industry Council. Ferrari talks with us about the main challenges the European chemical industry is facing, the circular bioeconomy and the next steps of Versalis in the green chemistry field.
Interview by Mario Bonaccorso
What are the main challenges the European chemical industry is facing nowadays?
Our world is at the crossroad of major transformations: the global population is expected to increase of another billion by 2030 and to concentrate in megacities with more than 10 million citizens. Products, food and energy will increasingly be required and consequently emissions, pollution and waste will grow.
Therefore, industry will face a dual challenge: on one side contributing to the development of innovative solutions for the increasing demand of energy and goods, on the other managing this growth and the needs that derive from it, by the efficient use of primary resources and by providing technologies allowing the valorization of waste while reducing CO2 emissions.
Global chemical industry is set for overall growth in 2019, despite a global economic deceleration and many factors of uncertainty, and the outlook for the European chemical industry is particularly uncertain: after a strong year in 2017 with a turnover of 542 billion euros, growth continued in 2018 but slowly, in fact the production of chemicals in EU declined 0.5% in 2018.
The European Union is on the edge of some major changes, as topics like immigration, democratic values, Brexit and finances – to name a few – are reshaping the whole scenario. One of the main concern is a potential no-deal Brexit, because it could bring trade between European Union and United Kingdom to a standstill.
Another topic that is affecting chemicals confidence regards world trade. The EU chemical industry is a historically important player in the global market, and US and China are the biggest trading partner.
In this context, trade tensions between the US, China and the EU, new chemical capacity waves from the US shale revolution and the expansion of the Chinese chemical industry are issues of primary importance.
Finally, higher energy and raw materials costs compared to other regions and significant regulatory costs which nearly doubled from 2004 to 2014. Accelerating the circular model and the waste enhancement is particularly significant in a region such as Europe, with limited access to natural resources that made the success of other regions of the world.
From a technological-industrial point of view, bio-based chemistry is a relatively ‘young’ sector: it aims to develop technological platforms able to maximize the use of the vegetables raw materials with integrated processes. In fact, this has also been the development of traditional processes, which have tripled yields in recent decades; the same path must be tackled on the chemistry from renewables but leveraging the knowledge consolidated in traditional chemistry.
Bio-based chemistry offers the opportunity to “rethink chemistry” to develop new, higher added value, and therefore more competitive, products with an improved environmental profile and able to respond to the development of a circular bioeconomy model.
Convinced of the potential for growth and innovation in this sector, we have actively embarked for a few years on a path that sees us increasingly engaged in renewable chemicals, leveraging research and innovation activities, and also strengthening them with strategic partnerships.
Our vision has always been very clear, aiming to create a fully integrated platform. A business model generating synergies, not only between products from renewable sources but also with the traditional Versalis supply chains, targeting the full valorization of the biomasses.
We put the know-how of traditional chemistry at the service of the development of chemistry from renewable sources, and developed innovative products intended both for applications similar to those of current products and for market applications with higher added value.
Finally, our business model envisages the development of processes capable of maximizing the value of biomass, to ensure a highly sustainable profile through the cascade use of the same.
The first industrial project was carried out in Porto Torres, in partnership with Novamont (JV Matrìca). An integrated complex of chemicals from vegetable oils was designed and built, with innovative plants first of their kind (start-up at the end of 2014). The products are intended for multiple application sectors, for examplepaints and inks, bioplastics, bio-lubricants and plant protection.
One of the products of Matrìca plant, the pelargonic acid, can be used as a biodegradable and non-toxic herbicide: this is an important example of portfolio development, with the aim of substituting traditional products with innovative ones, able to reduce environmental footprint and to ensure performances.
An interesting and innovative chain is the production of natural rubber from the guayule plant as a sustainable alternative to production from Hevea Brasiliensis, which has extraordinary characteristics of hypoallergenicity compared to traditional natural rubber, a very important quality for medical and consumer applications. We have already established experimental fields in southern Italy and furthermore, we are developing a process able to achieve the full exploitation of biomass (production of rubber, latex, second generation sugars and other special products). An important agreement was signed with Bridgestone last year to create synergies and accelerate the development of the technological platform from Guayule, making use of their pilot plant and their farms in Arizona.
Another very significant example is the use of residual biomass as feedstock for producing “advanced bio-fuels” via fermentation and potentially other bio-chemicals. Our R&D efforts in this field have the ambition to use residual feedstock that is notin competition with the agri–food chain to realize products with such performances to be suitable for high level applications, reaching an higher level of sustainability.
Through the acquisition of the “bio-activities” of Mossi Ghisolfi Group, we are building a platform of chemicals from renewables which integrates the upstream part based on the Proesa® technology for converting biomass into second-generation sugars, with the research and downstream know-how developed by Versalis. This allows to pursue further goals in the production of a full range of renewable chemicals via fermentation such as bio-oils for Green Refinery, total renewable PHA polymers, intermediates for biopolymers and biochemicals.
This platform paves the way for a new phase of chemistry from renewables at Versalis, both for two important sectors such as the bio-chemicals and bio-fuels.
All these efforts are driven by the belief that, as already happened with traditional refineries over the years, bio-refineries producing up to now mainly bio-fuels will expand their portfolio towards higher added value feedstock for chemistry.
In 2017, Cefic together with 28 other organizations from the industry, academia and NGO community signed the European Bioeconomy Stakeholders Manifesto, which presents the opportunities and challenges of developing a bioeconomy. One of the key recommendations to the EU and member state authorities is to stimulate market demand for renewable and resource-efficient products in order to further develop bioeconomy in the EU. The Manifesto also stressed the importance of making the shift towards a “circular bioeconomy”, meaning that only waste and residues that can’t be recycled or reused should be used for incineration with energy recovery. Primary resources should be kept in the loop for as long as possible.
The existing policy framework still needs to be adapted to help create successful business models based on the circularity principle to achieve the ambition of EU governments to move Europe towards a more low-carbon and circular economy.
Most of the existing policy frameworks operate under the linear economy principles, which slows down the development of circular value chains. It is important to implement a cross-sectoral and coordinated approach to ensure that all relevant EU policies (e.g. chemicals, waste, product policies) are based on the circular economy principles. For example, the harmonization of waste policies at EU level and the creation of a Single market of materials where resources (materials, substances) can be easily transported, traded and used will significantly accelerate recycling along the value chain.
Europe needs also a progressive environment to overcome the innovation ‘valley of death’ and bridge the gap from research to the marketplace. This should be done through joint public-private partnerships.
Furthermore, a fit-for-purpose information system on chemicals in products needs to be improved. For example, communication in the value chain about the substances in products: this will help ensure that all actors of the value chain are aware about the presence of chemical substances in the end product and can pass the information on to a recycler. This system will help recyclers remove problematic substances from waste before recycling.