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Green Chemistry Will Save Industry $65.5 Billion by 2020
November 14th, 2011
Green chemistry will save the manufacturing industry about $65.5 billion by 2020, according to a recent market report.
In the last decade there has been a great deal of activity in the development of renewable feedstocks for a variety of chemical processes. Compared to conventional petroleum-derived feedstocks, these new materials offer greenhouse gas emissions and reduced toxicity. More importantly to the companies that use chemicals in their industrial processes, they offer significantly lower costs, says Pike Research.
In contrast to the consumer market, where choosing green products usually entails paying a premium, greener is cheaper in industry. Most renewable feedstocks are produced through biological processes or thermal and chemical processes applied to cellulosic materials, such as wood, agricultural waste, or non-food plants like switchgrass -- all of which are less costly than the purchase of petroleum products.
Pike forecasts the use of green chemistry in a range of industrial activities will grow rapidly in the coming decade, offering significant direct cost savings as well as indirect savings in the form of avoiding liability for environmental and social impacts. The total amount saved is estimated to reach $65.5 billion by 2020.
"The worldwide chemical industry is valued at around $4 trillion, so even small improvements in efficiency can have very large impacts," says senior analyst Mackinnon Lawrence. "Just by bringing laggard companies up to the baseline standard of the industry as a whole, it's possible to capture more than $40 billion in cost savings and avoided liabilities."
Originally developed in the 1990s, partly as a result of the passage in the United States of the Pollution Prevention Act of 1990, green chemistry is less a description of a distinct industrial segment than a way of carrying out industrial activities from design to manufacturing.
The primary pathways for green chemistry, in Pike Research's view, include waste minimization in the chemical production process, replacement of existing products with less toxic alternatives, and the shift to renewable, non-petroleum-based feedstocks.
The evolution of these practices is being driven by a combination of technical, regulatory, consumer preference, and economic factors. Most notably, rapid advances in biotechnology have created powerful new toolkits for the manipulation of organisms (bacteria, yeasts, and algae) to produce industrially useful compounds with great efficiency and minimal waste. At the same time, the rising price of petroleum – critical both as a source of process energy and as a feedstock for many chemical processes -– has fueled interest and investment in finding alternative, renewable feedstocks.
Overall, green chemistry represents a market opportunity that will grow from $2.8 billion in 2011 to $98.5 billion by 2020, Pike says.
Robert Peoples, Director of the ACS Green Chemistry Institute, references the Pike Research report in a recent post in which he highlights several achievements that are moving the industry forward.
Bart King is a PR consultant and principal at Cleantech Communications.