SO, HOW CAN CHEMICALCOMPANIES TAP INTO THISGROWTH POTENTIAL AT SCALE?

The circular economy:a closer look

In a circular economy, today’s linear “take-makewaste” model—where materials are made into products, the products used and materials then discarded—is replaced with an pproach that eliminates the concept of waste and unlocks new value by continuously keeping products, components and materials at their highest utility and value.

Materials and molecules are constantly cycled back through the value chain for reuse, resulting in less energy and resource consumption, creating new opportunities to realize cost savings and reinv est for growth.

Adopting internal circularity

Chemical manufacturers can unlock trapped value through cost savings by embedding circularity within internal operations.

By capturing the value of recirculating molecules from used products at their end-of-life, they can utilize more renewable feedstock. And with feedstock accounting for approximately 60 percent of a chemical company’s total costs,26 less price-sensitive alternatives can drive

cost savings and improve price stability. This also creates incentives to design products for reuse, making a positive contribution to the circular economy in both downstream and upstream applications. As a result, the use of circular inputs can help chemical companies strengthen relationships with brands and retailers, build consumer trust and offset disruptive potential.

Embracing green chemistry

By 2020, the global green chemistry market is expected to hit US$100 billion,27 giving chemical manufacturers another way to capitalize on internal circularity. Designed to reduce development or use of hazardous substances, green chemistry principles include (but are not limited to) preventing waste, increasing energy efficiency, using renewable feedstocks,

avoiding derivatives, designing safer chemicals and minimizing accident potential.28 While adoption may require initial investment costs, these will be offset as sustainable product design increases demand. What’s more, investing in green chemistry now will protect market share as new players seek to enter and disrupt the market.