BASF’s Climate Change Schizophrenia

Today, The Chemical Notebook features a guest post by Alex Scott, C&EN’s London-Based senior editor.

Contradictory behavior relating to climate change was on show recently at BASF’s annual financial press briefing in Ludwigshafen, Germany. BASF’s Chairman Kurt Bock, an advocate of shale gas exploitation in Europe, swatted aside questions about the climate change impact of shale gas on the basis that most people in the world still get their energy predominantly from fossil fuels so it should be okay for BASF, too.

And this, just minutes after holding up a car part made from BASF’s engineered plastic and exclaiming that it is lighter than the metal it was designed to replace and so would improve fuel efficiency and hence the environmental performance of vehicles.

Given that there is broad scientific consensus on anthropogenic climate change, it shows how leading chemical companies such as BASF – one of the world’s most innovative companies – is potentially both part of the solution and still part of the problem. And that’s a business model set to attract greater scrutiny as scientific understanding about anthropogenic climate change sharpens.

LIGHTWEIGHT: BASF’s Kurt Bock shows off lighter car components made from its engineered plastic but the firm has yet to roll out “holy grail” processes such as those that use carbon dioxide as a raw material.

LIGHTWEIGHT: BASF’s Kurt Bock shows off lighter car components made from its engineered plastic but the firm has yet to roll out “holy grail” processes such as those that use carbon dioxide as a raw material.

The struggle for companies like BASF remains one of doing better for people and planet while also making money for shareholders. Right now the s

hareholders appear to be winning. The shift to truly sustainable technologies seemingly is too expensive or too difficult – or both. Yes new technologies are being developed, but by and large the pace of change is incremental. And being less bad for the environment doesn’t qualify as sustainable.

As Bock mentioned in Ludwigshafen, truly sustainable processes such as those that consume carbon dioxide remain the “holy grail” of the chemical industry. But as Bock also noted it was too early for him to be able to provide details about BASF’s activities in this field because they haven’t been sufficiently developed.

On the one hand BASF and many other chemical companies could be blamed for this state of affairs: They make a profit and only pay the current value for

their raw materials, such as fossil fuels. The next generation will pick up the full (and hidden) costs, including those resulting from climate change.

On the other hand, all chemical companies are working in the best way that they can within the current regulations and that means staying as profitable as they can, otherwise they might not survive at all.

A potential solution for breaking this deadlock is to markedly accelerate innovation in sustainable processes by creating closer ties between academia, industry and government. Government should step up its role of funding R&D for sustainable processes, and additionally provide tax breaks and a tax regime that is attractive enough for chemical companies to make the early investment in R&D for truly sustainable (not less bad) processes without going broke.

The need for closer ties between chemical firms and academia and government was a central theme taken up by a panel of experts meeting in the past week at the Royal Society of Chemistry in London as one of the best ways for “future-proofing” chemical companies and the users of chemicals. “Just in the U.K. we throw away the same number of carbon atoms that we spend £1.5 trillion [$2.5 trillion] buying in this country,” said industry veteran Ian Shott, who among his other roles is head of the Scotland’s new national center for industrial biotechnology. “There is an enormous opportunity here,” he says.

So curing the chemical industry’s climate change schizophrenia might enable chemical companies and their users to be future-proof too.

Shott is not the only chemicals expert advocating a closer working relationship between academia and industry as a way of securing growth and unlocking sustainable technologies. The other panelists at the RSC meeting, including David Jakubovic, open innovation director for Procter & Gamble, Tony Ryan, chemistry professor and pro-vice chancellor for the University of Sheffield in the U.K., and Andrew Burgess, chief scientist for Akzo Nobel, the company hosting the meeting, also voiced support for bringing academics and industrialists closer together to accelerate innovation. Cross-fertilization of technologies across the supply chain could further accelerate innovation, the panellists agreed.

The chemical industry’s climate change schizophrenia, as demonstrated by Bock, will go on for some time yet. But the sooner the collective chemistry brains from academia and industry come closer together – as advocated by Shott and others – the sooner chemistry can really be unleashed to tackle climate change. Then maybe Bock and other chemical industry leaders can start talking about the ‘holy grail’ chemistries that we are really interested in.

Author: Alex Tullo

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2 Comments

  1. “The shift to truly sustainable technologies seemingly is too expensive or too difficult – or both”

    Not really. The problem is that it is a prisoner’s dilemma. If everyone goes clean, then we all get a clean and safe environment at a modest incremental cost increase that is easily justified by the benefits. However, any given nation or company has the incentive to cheat by being filthy, externalizing the costs of its pollution, and poaching jobs and businesses from those other nations who are playing fair and doing the right thing. The positives of these stolen jobs and business offset the cost of the fraction of the pollution the defecting nations have to bear, so it is a net win for them – and a net loss for the world. Just like the classic prisoner’s dilemma of your Econ 101 class, the best possible world is one where everyone cooperates…and it is in everyone’s own interest to cheat. These are never easy problems to solve.

  2. Another simplistic analysis: ‘part of the solution or part of the problem?’ We’re both. BASF has a mission to produce products the world needs including more efficient car parts, and to do it in as responsible a fashion as it can; but not to be ‘simon-pure’ by some critic’s criterion!
    Natural gas, whether from shale or otherwise, is an important part of the bridge, especially as it displaces coal in US, China, elsewhere. Not if its displacing nuclear. Shale gas is not more ‘evil’ than other, just takes more energy and resources to get the formation to produce.

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