Reducing emissions makes good business sense
Bob Patel is the CEO of energy and chemical major LyondellBassell. In this interview with ‘India Global Business’, he tackles some of the tough questions around the war on plastic waste and the company’s commitment to a greener future.
Is shale gas a reliable prospect for the world economy?
The US has abundant resources in terms of natural gas, shale gas. The reserves are enormous, and the cost of production is quite low. The US is becoming much more of an export centre for LNG, which comes from shale gas. As far as environmental impact is concerned, natural gas is a much cleaner fuel compared to coal. It is clean-burning and it holds good prospects in terms of its longevity and low environmental impact. Even the exploration process for natural gas is becoming much more environmentally friendly.
What is the role being played by LyondellBasell’s India units and how do you see the country’s manufacturing base progressing in future?
We strongly believe in the growth prospects of the Indian economy. The growth of the middle class will continue, and they will consume both durable goods and plastics through packaging. The growth rate will be quite significant going forward. We think that the middle class is driving 75 per cent of the consumer spending by 2030 in India. As a company, we want to participate in this. We have polypropylene compounding manufacturing in India, mainly in the automotive market. So, as plastics are replacing steel and other heavier materials in automobiles, our aim is to participate in making vehicles lighter. This provides the benefits of fuel efficiency. We’re producing polypropylene compounds that enable this. Also, our company produces polyethylene pipes which are used for carrying sewage. These are also used in clean water systems. Between the use of plastics in vehicles and infrastructure, we can significantly participate in the Indian market going forward.
Where do emerging economies like India fit in within the future of petrochemicals?
The growth of the middle class is going to drive a lot of consumption of goods that come from petrochemicals, eventually plastics. We think that India is a very important end market for us and we continue to focus on reaching that market through local production, like polypropylene compounds, and also build on exports from the US and Europe of polyethylene grades – raw material which enables everyday life and the development of food packaging, pipes. In a market like India, people don’t buy in bulk because they don’t have the place to store. And generally, they can’t afford to buy four-six weeks’ worth of supply at a time. They buy as they need. Plastic enables the packaging of food and other goods in smaller quantities so that they can purchase and consume on a daily or weekly basis.
Are the Paris climate change targets realistic from an industry perspective?
These targets are being evaluated. But as a company, we think that looking after the climate and reducing emissions makes good business sense. What we are trying to do is try to prove our operational reliability and reduce the amount of energy required to produce the chemicals or plastics. We are using cleaner-burning boilers and furnaces in our plants. We try to recover heat that otherwise may go into the environment and use it to heat something else. Reducing carbon footprint will be an important part of our strategy going forward, but it has to make economic sense as well. I think both are possible together.
Is the war on plastics a winnable proposition?
Yes, absolutely. First of all, the war on plastics is actually a war on plastic waste. We have to separate the two. Without plastic, we can’t undertake everyday life. The challenge is really about what we do with the waste. The waste must be collected close to the source. And it cannot be released into the environment. People litter plastic packaging and it ends up in the sewage system which eventually ends up in rivers and into the ocean. Our company, in addition to a few other large chemical companies, has started the Alliance to End Plastic Waste. Essentially, the idea is to be a cross value chain alliance. We not only have chemical companies like ourselves but also packaging manufacturing companies, consumer companies like Procter & Gamble and waste handling companies who help the waste from leaking into the environment. We want to develop sustainable products and packaging that is easier to recycle. We engage the entire value chain to address the lifecycle of plastic. The Alliance has four strategic pillars:
1) Infrastructure – This aims to collect plastic waste.
2) Innovation – This is intended to spur innovation and convert the waste into a usable product. We are providing catalytic capital for research on subjects like making plastics that are more recyclable.
3) Education – It is the education of governments, municipalities, consumers on how to responsibly dispose of waste once it is created.
4) Clean up – We dedicate some resources from the Alliance to clean up the waste in the environment.
One example is the project we have undertaken which involves the clean-up of the Ganga in Varanasi in partnership with Renewology. It’s undertaking the separation and conversion of waste into fuel. The idea is that we would employ mostly impoverished women around the area to collect waste which can then be converted to fuel that can be used in winters there. Being an Indian, I am proud of that project and the significance of the river and the social good the project will do.
So, my answer is that yes, the war on plastic waste is winnable. People must realise that waste has value. If we can collect it, we can reuse it. Plastics actually do so much in terms of reducing environmental impacts of everyday life are a very sustainable material. The entire value chain is working on how to solve the challenge of plastic waste and how to recover the waste and convert it into new sustainable products.
Can you tell us about some of the initiatives undertaken by LyondellBasell to help this?
In the Netherlands, we have entered into a joint venture with Suez, a waste collecting company, to recycle polyethylene and polypropylene. They segregate waste like plastic packaging, shampoo bottles and then we wash it, grind the waste and create new raw material that can be used in consumer packaging. Unilever is one of our biggest customers for that. Recently, we also got into a partnership with Samsonite to create bags made from recycled waste.
We are working on several things to promote circularity. We are doing research on molecular recycling – converting the waste into feedstock that can be used to make new plastics. We are also using bio-based material like cooking oil to make plastic. In a project in the Netherlands, we are converting wastewater into steam to reduce CO2 emissions. It is equivalent of taking off emissions from over 30,000 vehicles on the road in the Netherlands every year.
What, in your view, is an ideal mix for countries to balance their energy needs with environmental concerns?
I think using clean sources of energy is very important. And most of them are all around the world. So, global trade will be important. LNG, or even propylene, that is being exported from the US is being used for cooking in places like India, Thailand and even parts of China. There will have to be trade of energy that has a lower environmental impact. LNG is something that will come from the US or the Middle East and be shipped to places around the world. It has to be a global game.
Same thing with plastics. Global trade will be important. The cost to produce plastics is lower in regions that have an abundance of shale gas like the US or cheap natural gas like in the Middle East. These can be exported to the rest of the world.