2021 business opportunities – Sustainability = Smart Business
This is a summary of a recent panel discussion with experts from Neste, Covestro, Unilever and the European Commission talking about scalable, affordable solutions to the sustainable materials challenge. The panel demonstrate progress, debate some difficult questions and highlight what is possible during 2021, a vitally important year, of course, for the climate. Thanks to Neste for their financial support in making this happen.
- Lars Börger, vice president brand owner management, Neste
- Lynette Chung, chief sustainability officer, Covestro
- Marika Lindstrom, vice president, procurement – packaging, and beauty and personal care, Unilever
- Werner Bosmans, policy officer – circular economy, European Commission
Moderated by Toby Webb, Innovation Forum
In the face of a changing climate and ongoing resource scarcity, the sustainability of materials is a growing concern for business executives reliant upon a steady supply of materials in the coming decades. Innovation, scalability and affordability will be crucial in the race to produce the materials we all want and need in 2021 and beyond, while reducing fossil fuel footprints and the associated carbon impacts of product lifecycles.
That was certainly the mandate outlined by experts from Neste, Covestro, Unilever and the European Commission in an extended webinar-style podcast recorded by the Innovation Forum team.
The conversation started with Lars Börger, VP of renewable polymers and chemicals at Neste, explaining the challenge ahead for developing more sustainable materials. The Finnish company has been creating renewable solutions for the biofuels, polymers and chemicals sectors. Today, it is the world’s largest producer of renewable diesel and has capacity to produce three million tonnes of renewable products a year at its refineries in Finland, the Netherlands and Singapore.
Börger pointed to the fact that 20% of fossil fuels will be used in polymers and chemicals in the coming years as evidence of a need to act. But he is buoyed by the two million tonnes of bioplastics already being produced annually. He is also encouraged by commitments shown by the likes of Coca-Cola and Unilever to switch away from ppolyethylene terephthalate (PET) plastics to biobased materials. “A lot of companies are stating they want to get rid of virgin fossil carbon as a source for chemistry. A lot of things are happening, but this is just the beginning,” he said.
Ongoing technological developments
Covestro is a company working to develop some of the alternative materials companies increasingly want to use. Lynette Chung, chief sustainability officer, said the business was trying to use carbon as efficiently as possible and keep it in product loops rather than it being emitted. One of its pioneering technologies, cardyon, is now in use. It takes CO2 and converts it into materials such as soft foam that can be used in mattresses and in the automotive sector.
Unilever is one of the companies keeping a close eye on these types of developments to help meet its own carbon goals, especially in reducing the impact of its packaging across consumer goods. Marika Lindstrom heads up the company’s packaging procurement organisation globally and is proud of the leadership her business has shown in turning its back on fossil-fuel based materials in favour of more circular ones. In 2017, Unilever promised that its plastic packaging would contain at least 25% post-consumer resin recycled plastic by 2025. In 2019, it decided to go further, to collect and process more plastic than it sells, and reduce its use of virgin plastic by 50%. “We’re driving very hard to have our bottles and closures made from the same material, which isn’t typical these days. Also, we want our sachets, which are typically multi-layer plastic with aluminium inside, to be made from mono-material so they are recyclable.”
Cost implications for supply chain
Innovation Forum’s Toby Webb pointed out that all of this has cost implications for companies along the value chain. Lindstrom agreed that recycled materials come with a cost and there’s “no way around it; everybody’s aware of that”.
In some markets, consumers are willing to pay a premium for brands showing they are using more responsible packaging. In places like Indonesia however, where Unilever sells single-use sachets of shampoo and laundry detergent “because people can [only afford to] buy a daily dose, they will not be able to pay for the [extra packaging] costs”.
For the new packaging technologies to really take off, there must be a critical mass to pay for the infrastructure that is needed for collection and processing, she added. And the cost needs to be shared. “Brand owners like ourselves can’t pay for all of it. That’s not good business for us. It’s certainly sustainable, but it’s not sustainable from a business perspective.”
Carrying the burden of increased costs is also a challenge for Covestro. It works with partners to invest heavily in researching materials technologies, but it needs to consider how those costs are shared along the value chain. For cardyon to really take off, the critical mass to which Lindstrom refers will be key to reaching a broader market acceptance, Chung said.
The right policy framework
Of course, the market will more easily accept new technologies and innovation if the right policy framework has been built. Werner Bosmans, a policy officer looking at plastics and the circular economy for the European Commission, joined the conversation, confident that the EU’s Green Deal will support companies in moving to use more circular materials. “It’s extremely clear that recycled materials are the best alternative feedstock that we have,” he said. Responding to Unilever’s pledge to make all packaging reusable or recyclable by 2030, the EU is set to implement concrete legislation by the end of 2021 that will make it easier for all businesses to follow suit.
Bosmans also noted the benefits of chemical recycling but warned companies must ensure that the additional energy use required for the process is not higher than the fossil fuels that would be used to make new plastics. “[Chemical recycling] is in a pilot phase and we still lack some data. There’s still an upscaling needed, but the potential is there, and we should push for innovation where it is possible.”
Lindstrom agreed, calling for different plastic-waste processing technologies to exist side-by-side. Mechanical recycling is perfect for dealing with high density polyethylene (HDPE) or rigid PET bottles. But the collection streams for polypropylene, for example, are much more complex and more difficult materials might require chemical recycling as the technology of choice. “I think there is a technology graduation pyramid, and we need to see which technology works for which market. They need to all coexist,” she said.
No technological silver bullet
Webb reminded the panel of a similar conversation that has been going on in the renewable energy market for the past 30 years. Would there be a silver bullet technology to dominate all others? No. The reality is that a mix of technologies is required to meet low-carbon energy targets.
The same is true of materials, Börger said. Rather than technologies competing against each other to find a silver bullet, there is no time to wait to find the ultimate solution. “We already have the opportunity [to achieve] really significant savings from sustainable waste and residue and bio-based solutions.”
The conversation kept coming back to one important factor in solving the sustainable materials challenge: recycling infrastructure. So, what is the EU going to do to improve the situation across Europe – and what role might business play in that?
Bosmans argues that we’re facing many environmental disasters right now because paying for waste infrastructure has never been factored in. The EU hopes to resolve this through new taxation and extended producer responsibility legislation, which will require companies to pay more should they continue to use materials that are not easily recycled.
He also pointed to new obligations for the separate collection of many waste streams that have been accepted by all EU member states. “Will that all be sufficient? I don’t know. At this moment, it is really too early to say,” he admitted.
Hopes, dreams and realities
The session concluded with each panellist giving their hopes for 2021 and beyond. Börger said he wants everybody to understand the need for a multitude of technologies to progress materials innovation. “My hope is that we act quickly now with the existing ones, while working on improving those and bringing in new technologies.”
For Chung, with COP26 taking place, the US re-entering the Paris Agreement and China fully committed, 2021 is the year for delivering on the climate. “We have seen a lot of targets and now we want to see the roadmaps,” she said.
Bosmans is keen to separate the dream (for a “sustainable and fair world”) from the practical realities of what policy interventions might achieve, with support from the EU’s recovery and resilience facility established in the wake of the Covid-19 pandemic. “That will have really huge financial resources that businesses can use to get out of this crisis.”
For Lindstrom at Unilever, there is “so much willingness to invest capital in sustainable solutions” both upstream and downstream. “I’m really hoping that this year we can create the critical mass that we’ve been talking about and create a breakthrough in the circular economy. That’s all I can wish for.”
Listen to the full audio version here