ARC Advisory Group conducted an insightful survey of global industry leaders earlier this year, investigating the priorities and challenges of meeting sustainability targets. ARC wanted to understand how digitalization and other technologies were aiding chemical and energy companies in these efforts.
In the ARC Strategies report, The Sustainability Future for Energy and Chemicals, industry analyst Peter Reynolds notes that 90% of companies surveyed have sustainability initiatives in place, although they may not be resourced to meet them. Most of the discussions occurred as the COVID-19 pandemic expanded across the globe, although the importance and focus on sustainability initiatives remained top of mind. Three-quarters of respondents rated digital transformation as highly important for achieving sustainability goals.
These results clearly reflect AspenTech’s experience with customers and further reinforce efforts to support these growing initiatives. Conversations on sustainability topics have expanded and accelerated in recent months, variously focused on:
- Sustainability replacing globalization as the key business driver
- Polymers for the circular economy
- Applying AI capabilities
- Navigating the energy transition
ARC survey results indicate that chemical companies are particularly concerned about and focused on sustainability objectives – more than their energy industry counterparts – even as both industries place “Operational Excellence” as the top priority. At the same time, both energy and chemical companies acknowledge that their skills, resources and capital often do not meet the requirements for success. Many companies reported they often rely on an infrastructure of aging assets that are not equipped for new efficiency standards.
Reynolds emphasizes “companies that exhibit operational excellence are distinguished by two characteristics: they manage their businesses and operational processes systematically and invest in developing the right culture.” That message resonates well today as companies work to rebuild their businesses after the shock of the pandemic and are working to boost resilience for future volatility and uncertainty.
ARC confirms what we have seen throughout the crisis – digital capabilities are critical to help companies respond, recover and emerge more resilient for future challenges and uncertain markets. And these capabilities will continue to drive success in sustainability.
Respondents ranked the top digital capabilities that are enabling success in sustainability initiatives; all mirror AspenTech’s experience with our customers in the chemical industry:
- Supply chain optimization to coordinate, manage and improve transparency of connected processes. Many AspenTech customers have supply chain planning tools to improve visibility on existing processes and have been exploring alternate scenarios as markets rapidly shift.
- Advanced process control to reduce process variability and energy consumption and support autonomous operations. China Bluestar recently installed advanced process control technologies in an organic silicones plant to help stabilize silicon operations and reduce energy consumption, saving $5.5M USD.
- Energy and utility optimization by using process modeling and simulation technologies. Korean chemical producer YNCC used modelling solutions to identify energy and emission savings opportunities across their operations. Improved operations yielded savings of $19.2M USD per year with a 12% reduction in energy use and carbon emissions, and future opportunity to achieve another 15% reduction in energy use.
- Predictive and prescriptive maintenance using machine learning and advanced analytics to improve asset utilization and predict and avoid failures. A European polymer producer used a machine learning tool to gain 27 days of advanced warning for a central valve failure and avoided an unplanned shutdown and probable emissions release.
Digitalization is a critical tool for companies as they respond to the pressures from shareholders, consumers, communities and employees to address the challenges of sustainability. The shareholder group is a relatively new entrant to this mix, yet its influence is crucial right now as companies struggle to find capital in these volatile markets. Future capital allocation is emerging as “a stress test,” according to Peter Reynolds, as companies respond to the uncertain and complex outlook for most industries. To learn more, read the report: The Sustainability Future for Energy and Chemicals.