Among the various industries impacted by current supply chain issues, the chemical industry is one of them. The situation is forcing companies to take notice of critical chemical supply, as many companies are having difficulty supplying the synthetic chemicals they presently rely on.
Chemicals are used in formulations that support household, industrial and institutional products; personal care products; agricultural products; water treatment; paints and coatings; and aid in all aspects of energy production. In essence, chemicals help the world go round, and access to them is vital.
To improve the current supply chain situation as well as access to essential chemicals, companies must quicken their shift from synthetic chemicals to sustainable chemicals, such as bio-based surfactants, made from plants and microorganisms. The vast majority of the industrial chemicals in the markets mentioned above are synthetic, so having an alternative when they’re unavailable – like right now – is crucial.
Synthetic chemicals have ruled the day since the Industrial Revolution, but sustainable, bio-based chemicals continue to boom. Not only are sustainable chemicals better for business, but they’re also better for the environment than synthetics. Synthetic chemicals facilitate the need for oil and gas production, consume more hydrocarbons and generate a lot of waste, while sustainable, bio-based chemicals are derived from renewable sources and are typically biodegradable.
Another advantage to sustainable chemicals is that they are impacted far less by global supply chain issues like what we are experiencing with semiconductor chip shortages due to the pandemic, combined with extreme weather patterns and China's power failures of late because they are locally sourced and grown from raw material. Meanwhile, most synthetic chemicals are subject to refinery output/production and associated logistics problems of moving energy around the globe.
Many people tend to focus on the environmental benefits of sustainable chemicals because that’s where the exciting technology sits, but nobody is talking about the supply chain and logistics benefits. Having a stable supply chain that equates to revenue and allows companies to potentially grow through disruptions should be the catalyst for manufacturers to switch to sustainable technology and green chemical alternatives.
Sustainable chemicals were previously inaccessible due to high cost and low availability, causing most manufacturers to default to synthetic chemicals. There’s also a perception that being sustainable means sacrificing performance, but that’s not the case anymore. The technology has improved rapidly, and now sustainable chemicals are high-performing, affordable, locally available in most cases and production is on par with synthetics.
Implementing sustainable chemicals has a near-immediate effect on the environment; it’s a change that will have an impact now, rather than in 10-15 years, as many corporations promise. As with anything, there are costs associated with such change, but the world is giving companies a reason to make change right now, and the pay-off will far exceed the costs.
Every business has a role to play in fighting climate change. The chemical industry is no exception. But, here’s the real difference -- the chemical industry has a unique opportunity to dramatically improve global sustainability and reduce the use of synthetic chemicals to aid in the transition to more renewable energy. The solution is to use bio-based chemicals, molecules that are biodegradable and do not harm the environment.
The sheer volume of use of synthetic chemicals is so massive that replacing them with bio-based alternatives creates huge volumes of sustainable products across multiple industries. The net effect of this is huge. By significantly reducing the number of gallons of synthetic chemicals used globally on a daily basis, the chemical industry can begin to make a serious run at reducing our environmental footprint today.
The ultimate question is, how do you marry existing infrastructure investments, like that of the synthetic chemical industry, with sustainable and renewable practices, including its supply chain capability, while maintaining a profitable business model? It involves a number of actions like updating supply chain technologies, including the use of artificial intelligence (AI), robots and cloud communications all with an eye toward the chemical industry leading the charge toward supply chain transformation.
Supply chain disruptions will only grow more common given the pandemic, climate disruptions and power disruptions, so it’s critical for companies to future-proof their supply chains by adopting sustainable chemicals to maintain productivity and profitability, while at the same time being a force for good when it comes to combating climate change.
In the last 10 years, a lot of exceptional bio-based and bio-chemical companies have entered the market. The supply chain is poised to support the demand for sustainable technology.