01 Feb 2024

Out with the old, in with the new

This blog post describes the need for a radical transformation of the plastics industry towards a circular economy in order to achieve global climate goals. This transformation requires the conversion of linear production facilities, massive investments in mechanical recycling and circular product design as well as comprehensive digitalization inspired by the pioneering spirits of past industrial generations.

plastic waste with a white bottle, red plastic film and smaller products

I still remember the opening of the K trade fair 2019 by Markus Steilemann, the CEO of Covestro. At the time, I was standing in the audience as a newly minted start-up entrepreneur in the digital circular economy. "Digitalization on the one hand and sustainability on the other are the decisive levers for the future of the chemical and polymer industry and thus for the future of humanity as a whole" were his words at the time. And I thought: wonderful, in the right place at the right time.

Five years have passed since then. From corona to the Ukraine war, high energy prices to excessive bureaucracy - it's easy to name external reasons why the megatrends of digitalization and sustainability have fallen by the wayside. However, the chemical industry's self-image as the "mother of all industries" does not fit in with this blame game, as it has always been the continent's driving force for innovation and growth. Measured against this, the results are sobering: Germany is stagnating at an incredibly low level of circularity and digitalization. Too timid on the one hand, too focused on chemical recycling on the other, that is my conclusion today.

There is no question that we need the products, expertise and financial clout of the plastics industry more than ever to achieve the global climate targets. But with a completely different business model. Away from large-scale plant operators in a linear economy and towards a circularity service provider for carbon. In the future, the core function of the plastics industry must be to produce plastics from renewable raw materials in a way that is as high-quality, environmentally friendly and circular as possible in the long term.

Circular-Plastics-as-a-Service - this new vision is nothing less than the most far-reaching change in the plastics industry since the beginning of industrial polymer production. In concrete terms, this requires the consistent depreciation and conversion of all linear assets, massive investment in advanced mechanical recycling and circular product design across all industries. And an associated, comprehensive digitalization of all production steps, not to mention the opportunities that the dawn of the AI age will also open up for the chemical industry.

Anyone for whom this vision sounds too much like a young entrepreneur's blossoming fantasy should take a look at the German automotive industry. Today, it sees itself as a global mobility service provider. However, the example also serves as a warning: the long-delayed, sometimes bitterly fought transformation has caused us to fall behind as a car manufacturing nation. This must not happen to the chemical industry. It must take a bold step forward.

Let us remember the industrial pioneers of the 19th and 20th centuries, on whose shoulders a large part of our continent's prosperity is based. This pioneering spirit without a safety net, but with a long-term orientation: we need to rediscover this as an industry. In contrast, it is unworthy of such a tradition-conscious industry to think that we can reach the shores of sustainable plastics production primarily with chemical recycling, calculation tricks ("mass balancing fuel exempt") and green marketing.

This comprehensive change must not only take place in the minds of top managers, but also in the minds of each and every one of us. With the Alliance for a Circular Economy, we presented concrete initial measures to the Federal Chancellery at the Chemiegipfel 2023 on how digitalization and sustainability can shape the future of the chemical industry. If we succeed in implementing them together, I hope that I will be able to report to Markus Steilemann at the K trade fair in 2049 that we have succeeded in saving humanity. Let's get to work.

Author: Christian Schiller, CEO Cirplus

This article was first published on 31.01.2024 in "Nachrichten aus der Chemie" and translated from German to English with deepL.com.