The Global KAITEKI Center and the transitioning of Chemicals and Materials Industry companies towards sustainable and circular enterprises

In a special plenary session of the “Sustainable Engineering Forum” of the American Institute of Chemical Engineers (AIChE), at the Annual Meeting of AIChE in Boston, researchers of The Global KAITEKI Center were invited to describe the results of their research on the need that the Chemicals and Materials Industry (CMI) companies must reinvent themselves, in order to accommodate the demands of the upcoming sustainable and circular economy.

AIChE Annual Meeting. Boston, MA
November 10, 2022 8:00 – 8:45 am
Session 448a

“Reinventing the Chemical/Materials Company: Transitioning to a Sustainable Circular Enterprise”
George Stephanopoulos, Bhavik Bakshi, and George Basile

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In this paper we advance the proposition that decarbonizing the Chemicals and Materials Industry (CMI) to meet the Paris Agreement goals is impossible without the transformation of the industry into a Sustainable Circular Chemicals and Materials Industry (CCMI). The implications of such transformation are extensive and multifaceted and would lead to a re-invention of the chemical company. CMI is defined as the set of industrial activities, which cover the transformation of raw material deposits in earth to consumer products, and include cement, iron and steel, non-ferrous materials (aluminum, magnesium, nickel, copper, rare earths, others), chemicals (organic and inorganic) and polymeric materials. Decarbonization of CMI is technically feasible, even though technical and economical hurdles exist. However, given the prevailing constraints from existing industrial infrastructure, limitations in the growth of zero-carbon electricity, limitations in the sustainably available biomass, and the competition for renewable energy by other sectors of the economy, notably buildings and transportation, industry cannot achieve the Paris Agreement solely on the basis of technological solutions. Furthermore, extensive research on the decoupling of GDP from resource utilization indicates that it is impossible to meet the Paris Agreement goals with observed historical rates of decoupling.  Decoupling needs to be complemented by sufficiency-oriented strategies and strict enforcement of absolute reduction targets.

Individual companies cannot transform the CMI to CCMI on their own. They need to reinvent themselves in strategic alliances with information, financial and management companies in the circular supply chain. In this paper we will discuss the primary incentives leading this transformation, such as: (a) Improved economic returns for the chemical/materials companies. (b) Significant expansion of global economic activity. (c) Broad expansion of economic benefits to underserved social groups.  The paper will sketch the transition path, as well as the fundamental questions that the academic community must answer, and which underpin the sustainability of the transition.