Industry 4.0 and Sustainability at WPC2019

Industry 4.0 and Sustainability at WPC2019

March 22, 2019

At WPC2019, petrochemical companies took a deep dive into sustainability. Leaders examined the changes necessary to continue strong financial performance as well as ways they can adapt to better preserve and protect the environment. Digitalization is an important component in those shifts, having already proven its value in enabling smarter and greener operations for many of those who spoke at the conference.



Understanding the Trends


Deepak Parikh, North America President and CEO for Clariant Specialty Chemicals discussed the key trends for specialty chemical markets. He noted how they are facing commoditization, forced by margin erosion and more broadly available production technology for chemicals. These markets are also seeing consolidation driven by factors such as access to feedstock, with Asian competitors driving this trend. At the same time, there are opportunities in growth markets, such as China, and a real opportunity to offer a unique customer experience by bundling products with value-adding services that differentiate the offerings.


Traditional fuel markets continue to face uncertainty according to Sandeep Sayal, Vice President, Downstream Energy Research, IHS Markit. He noted, among other factors, that naphtha growth will outpace most refined products, supporting petrochemical demand and integration. He also noted that International Maritime Organization (IMO) specification changes can disrupt supply and demand in the short term, and that substitution and fuel economy gains will play a role in demand well into the 2030s.



Driving Better Business Operations with Digital Tools


In addition to market dynamics, changes in approaches to the market are bringing significant changes. Dave Witte, IHS’s Senior Vice President for Energy and Chemicals noted that Industry 4.0 technologies can rapidly change petrochemical industry dynamics.  As examples, he pointed out how gas-to-chem disrupts conventional supply routes and mobility and circularity changes can require substantive CAPEX. He added that digitalization improves capital and operational effectiveness. This combination of asset optimization and process optimization can ultimately drive profitability.


Tuesday’s technology seminar included a panel discussion on Industry 4.0 where AspenTech President and CEO Antonio Pietri and executives from BASF Corporation, Petrotechnics, Advisian Americas and Schneider Electric cited examples of digitalization’s impact and where it delivers the greatest returns. Antonio pointed out that the process industries are in the best position to take advantage of digital transformation - all the data is there already, and the use cases create huge value from technology adoption. Though digital transformation in the process industries began 30 years ago, today new technology has emerged that allows organizations to get greater insights out of the data.


Predictive maintenance stands out as one of the areas where organizations can quickly capture positive ROI, letting businesses get more out of assets and potentially reducing future CAPEX. Christopher Witte, Senior Vice President, Freeport Site Manager, BASF Corporation, explained that with predictive maintenance, “your tools tell you in the middle of the night, ‘Mom, I don’t feel well, come take care of me.’“ There’s a huge savings from these early warnings.


Antonio shared that one AspenTech customer has been able to avoid costly hyper compressor shut-down, with a savings impact of $40 million USD. Though some parts of the chemical industry have been slower to embrace digital transformation, there is increasing pressure to adopt. Antonio anticipates digitalization will become a competitive issue in the next 12 to 24 months, explaining that the organizations that create and sustain value are those that train, attract, develop and maintain talent, and have processes in place to sustain the value of the technology.



Reducing Waste and Rethinking Recycling


According to Robin Waters, Director of Plastics Planning and Analysis for IHS Markit, sustainability risks to the plastics industry include infrastructure adequacy, tech readiness, rapid changing policy decisions and overall resin demand. Organizations are working to overcome these obstacles to address growing concerns. Stopping waste is a crucial part of the equation; cleanup on its own is not enough. As Dewey Johnson of IHS Market put it, "you need to turn off the faucet before you pull out the mop."


Dow CEO Jim Fitterling pointed out there are plenty of areas where the chemical industry can have an impact, including reducing greenhouse gas, increasing renewable energy and driving more sustainable agriculture. Progress in education and engagement is crucial as well, said Fitterling. Dow is a founding member of the Alliance to End Plastic Waste (AEPW), which has a goal of raising $1.5 billion over the next five years to develop and scale solutions that manage plastic waste and promote post-use solutions of plastic. As part of this effort, he called out education, infrastructure, innovation and cleanup as important focal points. Datuk Sazali Hamzah, Managing Director and Chief Executive Officer, PETRONAS Chemicals Group also highlighted the role of education – noting that they had to educate consumers on shelf life when they introduced new biodegradable bags.


Much of the discussion about environmental sustainability centered around finding ways to increase recycling and finding new ways to reuse materials. Ellen Martin, Vice President for Impact and Strategic Initiatives at Closed Loop Fund emphasized that beyond closed loop recycling, the industry needs to look for new open loops as well: ways that materials can stay in play in the environment instead of becoming waste.


As Braskem’s Executive Vice President of North American Polyolefins Mark Nikolich explained, “In the circular economy, nothing is wasted: everything is transformed.” Daniele Ferrari, CEO, Versalis and President, CEFIC (the European Chemical Industry Council) pointed out that the chemical industry can impact sustainability not just with mechanical recycling but with physical and chemical/molecular recycling as well.


Though there are still obstacles, most organizations recognize sustainability as a crucial priority that can deliver long-term value. Lyondell Basell CEO Bob Patel summarized, “I believe if we do the right things, make sound decisions and think about the world we want to leave for future generations, I have no doubt that what some consider to be a large challenge is in fact a monumental opportunity.”

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