How should chemical companies improve resource efficiency and reduce the carbon footprint of their operations in the next decade?
Over the next few decades, rising global demand for chemicals forced chemical companies to increase production, while at the same time, the industry had to transition to sustainable development in order to alleviate the climate and environmental crisis. Facing the double challenge, it is necessary for companies to adopt creative solutions, recycle or reuse materials, and create a circular economy as an alternative to the linear economy. United Nations Sustainable Development Goal 12 emphasizes the concept of “responsible consumption and production”, which has been adopted by many chemical companies as a guideline.
Chemical companies are taking various approaches to improve resource efficiency, and the pursuit of energy efficiency is a relatively easy goal that may not require large capital investments. Energy security and improving energy efficiency are the main concerns of chemical company executives at a time of frequent geopolitical conflicts around the world. Another way to improve resource efficiency is to reuse raw materials, such as advanced plastic recycling solutions.
It is important to note that in the pursuit of optimal resource efficiency, commodity chemical manufacturers may employ a different set of strategies than smaller specialty chemical manufacturers. For example, ethylene producers urgently need to reduce Scope 1 emissions, while specialty polymer manufacturers may focus on eliminating waste and product circularity. Regardless of the size, nature and priorities of a chemical product production plant, digital solutions can help maximize resource efficiency. A holistic view of the entire production value chain is required to improve operational efficiency, profitability and sustainability as a whole.
Effective Planning and Scheduling
During the epidemic, global supply chains have been under unprecedented pressure, and supply chains in the energy and chemical industries have been frequently disrupted. Demand for plastics in healthcare has skyrocketed, while demand for energy has plummeted. While the pandemic receded and the world started to get back on track, the conflict in Europe added to market volatility. In the face of such a changing market environment, chemical companies can maintain profitability by integrating upstream and downstream models, meet product demand through production planning and scheduling, and save resources (such as raw materials) to maximize production profits. For example, PTT Global Chemicals, a well-known olefin and aromatics producer in Southeast Asia, cooperated with Aspen on a supply chain planning optimization project to improve supply chain visibility.
Improve energy efficiency and reduce carbon footprint
Some chemical companies are experimenting with new business models to take advantage of new raw materials, new energy sources and new products, while others have pledged to reduce their carbon footprint and become carbon neutral by 2050. In addition to the EU’s emissions trading system (ETS), other parts of the world are also considering promoting carbon taxes in the form of trading markets. Deviation from these targets will result in high operating costs and slash profit margins. Free allowances for emissions trading are expected to decrease, which in turn will drive up carbon permit prices. In addition to reducing the need for utilities such as fuel gas and steam, businesses must improve the energy efficiency of vital processes if they are to survive and thrive in the long run. With a highly competitive market, volatile raw materials, and low profit margins, commodity chemical producers can significantly improve their bottom line with just a small improvement in operations to increase energy efficiency.
Creating a plant digital twin can help identify opportunities across the plant to improve energy efficiency without capital investment. For example, LG Chem’s 900,000-ton-per-year ethylene plant in Daesan, South Korea, used Aspen Plus and Aspen Energy Analyzer to create a digital twin for the plant. A single energy analysis can reveal about 60 energy saving opportunities. After assessing the commercial and operational viability, LG Chem selected 20 of these opportunities and implemented corresponding initiatives, resulting in a 3-4% reduction in overall energy consumption, which is estimated to bring in an estimated $10 million per year for the plant extra profit.
Another avenue to improve margins and reduce carbon footprint is to optimize utilities such as fuel, hydrogen and steam. Some large chemical companies are adopting active utility management to improve energy efficiency. By deploying digital solutions such as advanced process control (APC) and digital twins, companies will be able to better understand and control utility operations, emission levels and consumption reduction opportunities. APCs have been used by the process industry for decades to improve process efficiency. In addition to solving nonlinear problems, the new APC tool leverages artificial intelligence and machine learning (ML) to learn from the plant’s historical performance, allowing users to optimize desired economic and operational variables with minimal effort. Likewise, a digital twin is a powerful tool for tracking and managing emissions and can provide insights into process bottleneck removal. Digital twins facilitate monitoring at the facility level, locate emission sources, and help validate and harmonize site-wide data that can be used for reporting and decision-making.
The waste generated by the chemical industry accounts for a large portion of the total global waste. Waste can be liquid, solid or gaseous. In the United States alone, 23,700 active generators generated 34.9 million tons of hazardous waste in 2019, according to the U.S. Environmental Protection Agency (EPA). As the chemical industry consumes large amounts of water to cool processes or as part of the process, wastewater is the largest waste stream.
To minimize waste generation, the chemical industry utilizes digital solutions in different ways, firstly by balancing various preventive strategies to prevent or minimize waste generation, and secondly by strategies for managing the waste that has already been generated. Both aspects of this circular approach benefit from the implementation of digital solutions. For example, the incineration of manufacturing plants produces waste that affects the environment of nearby communities. Other initiatives include reducing the need for further processing of the product, or minimizing catalyst decay.
Figure 1. Schematic diagram of a circular value chain in the chemical manufacturing industry, with potential opportunities to leverage digital solutions listed at each link
To meet new technological and environmental challenges, the chemical industry needs digital technologies more than ever. Digital solutions are critical to improving resource efficiency and reducing the carbon footprint of industry operations. In several cases in this paper, we have used digital solutions to help clients improve the overall reliability, productivity and efficiency of their factories without any new capital expenditure. Given the limited resources of businesses, increasing customer demands for responsible production, and increasing competition in the chemical market, chemical manufacturers are rapidly overhauling operations to capture additional revenue opportunities.
Facing the pressure of global chemical demand growth and sustainable development, enterprises in turbulent markets urgently need to improve operational agility, flexibility and insight. As an important part of industry transformation, leading chemical companies are adopting digital solutions to improve resource efficiency and minimize the carbon footprint of their operations. The companies mentioned in the article are using digital solutions to improve the overall reliability, productivity and efficiency of their factories without any new capital expenditure. Digital solutions provide operational insights and create value at every step of the chemicals value chain, from supply chain, through design, to production, reliability and maintenance.
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