4 key challenges the UK chemical industry is facing today
Posted on 05/07/2017
How we can best prepare for future demand.
With a total turnover in excess of £50 billion annually, UK chemical and pharmaceutical companies add £20 billion GVA to the economy.
The UK chemical industry is one of the few sectors with a positive balance of trade. More importantly, chemicals are critical for almost every other UK manufacturing industry, including healthcare, home and personal care, paints and many others.
Chemicals and chemistry are also becoming increasingly important in aerospace, automotive manufacture and construction. In other words, the sector is a vital part of the national economy.
But the industry has changed over the past decade. Unlike the major global corporations that operate from other countries, the landscape in the UK is characterised by a large number of medium-sized companies and SMEs. This brings particular challenges – to address them, there are four key questions to be asked.
Where does the industry get its starting materials?
At the moment, the majority of chemicals are produced from oil and other minerals, which all have a finite supply. We need to have options which enable us to recover and re-use chemical components or to use more sustainable starting materials, such as biomass and organic waste.
Innovation is key to addressing these contemporary challenges. Last year, KTN published a report on feedstocks for the chemical industry and recently ran a well-attended event on the topic.
Industrial Biotechnology (IB) is also key to advancement in this area. The use of IB to convert renewable feedstocks, particularly biomass, waste and carbon dioxide, into chemicals is a rapidly growing technology in which the UK has some important strengths.
Synthetic biology is a relatively new discipline, but has exciting possibilities for the development of specific organisms that will enable the production of specialty chemicals and many other products – including brand new products which cannot be made in any other way. KTN is supporting cross-collaboration between business and the academic community in this area.
Where does it get its energy?
Making chemicals uses large amounts of energy, which means the industry is one of the biggest carbon emitters in the UK. Reducing emissions to achieve the climate change targets set out in the Paris agreement is vital. The industry needs to plan for its consumption of energy over the next century, investigating how it can become more sustainable while remaining competitive in a global economy.
What processes should it use to convert materials into chemical products?
Chemical plants are expensive to build and operate. So it can be difficult to justify investment in new technology that may be cheaper to run, as well as safer and more sustainable, due to existing investment in current plants and also because of the risk involved in installing relatively untested technology.
However, with encouragement from KTN and the demonstration facilities now available at the Centre for Process Innovation (CPI), part of the High Value Manufacturing Catapult, some of the larger companies are beginning to install new chemical and biotechnology processes, having effectively de-risked the change by using CPI’s facilities.
KTN aims to build on the successes of some larger UK companies that have introduced new, generally smaller scale processes into their UK operations. This is essential if the country is to retain a competitive chemical manufacturing base.
What are the new growth markets for chemicals and how can the industry be encouraged to take up opportunities to produce them in the UK?
Almost every consumer product in the world contains chemicals – the clothes we wear, our bathroom toiletries, our methods of travel, the buildings we live in and even what we eat.
And most materials are comprised of chemicals. So it is important to understand the market trends in a wide range of sectors to help the chemical industry prepare to supply customers with high quality, competitive products that meet their needs in 2020, 2030 and beyond.
With such a diverse and expansive range of products using chemicals, we are currently focusing on three areas:
– Formulated products, such as personal care, paints, and healthcare; working with the National Formulation Centre based at CPI
– Composite materials; investigating how UK-based chemical suppliers can provide more and better components for high performance composites
– Materials for energy, including photovoltaics and materials for energy storage
The team at KTN also works very closely with a number of industry-led bodies to deliver future strategies and plans, including the Chemistry Growth Partnership, the IB Leadership Forum and the Synthetic Biology Leadership Councils. For the overall growth of the industry it is important to develop conversations, influence government policy and identify key areas where support will stimulate innovation.