From the Sector

• More than 30 leading pioneers of the chemical and material sector welcome the latest political papers from Brussels, Berlin and Düsseldorf

The political situation for renewable carbon from biomass, CO2 and recycling for the defossilisation of the chemical and materials industry has begun to shift fundamentally in Europe. For the first time, important policy papers from Brussels and Germany take into consideration that the term decarbonisation alone is not sufficient, and that there are important industrial sectors with a permanent and even growing carbon demand. Finally, the need for a sustainable coverage of this carbon demand and the realisation of sustainable carbon cycles have been identified on the political stage. They are elemental to the realisation of a sustainable chemical and derived materials industry.

The goal is to create sustainable carbon cycles. This requires comprehensive carbon management of renewable sources, which includes carbon from biomass, carbon from Carbon Capture and Utilisation (CCU) – the industrial use of CO2 as an integral part – as well as mechanical and chemical recycling. And only the use of all alternative carbon streams enables a true decoupling of the chemical and materials sector from additional fossil carbon from the ground. Only in this way can the chemical industry stay the backbone of modern society and transform into a sustainable sector that enables the achievement of global climate goals. The Renewable Carbon Initiative’s (RCI) major aim is to support the smart transition from fossil to renewable carbon: utilising carbon from biomass, CO2 and recycling instead of additional fossil carbon from the ground. This is crucial because 72% of the human-made greenhouse gas emissions are directly linked to additional fossil carbon. The RCI supports all renewable carbon sources available, but the political support is fragmented and differs between carbon from biomass, recycling or carbon capture and utilisation (CCU). Especially CCU has so far not been a strategic objective in the Green Deal and Fit-for-55.

This will change fundamentally with the European Commission's communication paper on “Sustainable Carbon Cycles” published on 15 December. The position in the paper represents an essential step forward that shows embedded carbon has reached the political mainstream – supported by recent opinions from members of the European parliament and also, apparently, by the upcoming IPCC assessment report 6. Now, CCU becomes a recognised and credible solution for sustainable carbon cycles and a potentially sustainable option for the chemical and  material industries. Also, in the political discussions in Brussels, the term “defossilation” is appearing more and more often, complementing or replacing the term decarbonisation in those areas where carbon is indispensable. MEP Maria da Graça Carvahlo is among a number of politicians in Brussels who perceive CCU as an important future industry, putting it on the political map and creating momentum for CCU. This includes the integration of CCU into the new Carbon Removal Regime and the Emission Trading System (ETS).

As the new policy documents are fully in line with the strategy of the RCI, the more than 30 member companies of the initiative are highly supportive of this new development and are ready to support policy-maker with data and detailed suggestions for active support and the realisation of sustainable carbon cycles and a sound carbon management. The recent political papers of relevance are highlighted in the following.

Brussels: Communication paper on “Sustainable Carbon Cycles”
On 15 December, the European Commission has published the communication paper “Sustainable Carbon Cycles” . For the first time, the importance of carbon in different industrial sectors is clearly stated. One of the key statements in the paper is the full recognition of CCU for the first time as a solution for the circular economy, which includes CCU-based fuels as well. The communication paper distinguishes between bio-based CO2, fossil CO2 and CO2 from direct air capture when addressing carbon removal and it also announces detailed monitoring of the different CO2 streams. Not only CCU, but also carbon from the bioeconomy is registered as an important pillar for the future. Here, the term carbon farming has been newly introduced, which refers to improved land management practices that result in an increase of carbon sequestration in living biomass, dead organic matter or soils by enhancing carbon capture or reducing the release of carbon. Even though the list of nature-based carbon storage technologies is non-exhaustive in our view, we strongly support the paper’s idea to deem sustainable land and forest management as a basis for the bioeconomy more important than solely considering land use as a carbon sink. Surprisingly, chemical recycling, which is also an alternative carbon source that substitutes additional fossil carbon from the ground (i.e. carbon from crude oil, natural gas or from coal), is completely absent from the communication paper.

Berlin: Coalition paper of the new German Government: “Dare more progress – alliance for freedom, justice and sustainability”
The whole of Europe is waiting to see how the new German government of Social Democrats, Greens and Liberals will shape the German climate policy. The new reform agenda focuses in particular on solar and wind energy as well as especially hydrogen. Solar energy is to be expanded to 200 GW by 2030 and two percent of the country's land is to be designated for onshore wind energy. A hydrogen grid infrastructure is to be created for green hydrogen, which will form the backbone of the energy system of the future – and is also needed for e-fuels and sustainable chemical industry, a clear commitment to CCU. There is a further focus on the topic of circular economy and recycling. A higher recycling quota and a product-specific minimum quota for the use of recyclates and secondary raw materials should be established at European level. In the coalition paper, there is also a clear commitment to chemical recycling to be found. A significant change for the industry is planned to occur in regards to the so-called “plastic tax” of 80 cents per kilogram of non-recycled plastic packaging. This tax has been implemented by the EU, but most countries are not passing on this tax to the manufacturers and distributors, or only to a limited extent. The new German government now plans to fully transfer this tax over to the industry.

Düsseldorf: Carbon can protect the climate – Carbon Management Strategy North Rhine-Westphalia (NRW)
Lastly, the RCI highly welcomes North Rhine-Westphalia (NRW, Germany) as the first region worldwide to adopt a comprehensive carbon management strategy, a foundation for the transformation from using additional fossil carbon from the ground to the utilisation of renewable carbon from biomass, CO2 and recycling. For all three alternative carbon streams, separate detailed strategies are being developed to achieve the defossilisation of the industry. This is all the more remarkable as North Rhine-Westphalia is the federal state with the strongest industry in Germany, in particular the chemical industry. And it is here, of all places, that a first master plan for the conversion of industry from fossil carbon to biomass, CO2 and recycling is implemented. If successful, NRW could become a global leader in sustainable carbon
management and the region could become a blueprint for many industrial regions.

On 27 November 2021, the Scientific Award for International Sustainable Aviation and Energy Society (SARES Award) was awarded to Professor Dr Thomas Gries from the Institut für Textiltechnik of RWTH Aachen University. The award ceremony took place during the closing ceremony of the International Symposium on Sustainable Aviation (ISSA) in a hybrid format online and simultaneously at Kasetsart University, Bangkok, Thailand.
 
With the award, the committee recognised the ongoing contribution of Pro-fessor Gries and the Institut für Textiltechnik to the digitisation and bio-transformation of the textile sector, as well as the Institute as a place of innovation for sustainable aviation.

Examples of this include the development of 3D braided ceramic matrix composite components for aircraft engines, which were researched together with partners in a Horizon 2020 project (EU project AllOxITD). The ongoing Chrysomallos research project as another example, funded under the national aeronautics research programme in Germany, aims to develop a completely new and sustainable high-performance insulator for aircraft cabins based on aerogels. These have a significantly lower weight than the glass fibre mats used up to now, while providing the same insulation performance, and solve the problem of the previously high manufacturing costs of aerogels. The aim of the project is to develop an insulation material with reduced density (reduction of more than 20 percent). To this end, a new type of insulation material based on aerogel is to be developed. The basis is an aerogel fleece (0.06 W/mK at 28 kg/m³), which has already been developed as part of a dissertation at the Institut für Textiltechnik of RWTH Aachen University (Mroszczok, J.: 2019).

The aviation industry is one of the fastest growing industries in the world. Due to this fact and its importance for society and the global economy, it needs to make special efforts towards sustainability. The ISSA, an international multi-disciplinary symposium, aims to address current issues in aviation such as improving aircraft fuel efficiency, promoting the use of biofuels, minimising environmental impact, mitigating greenhouse gas emissions and reducing engine and aircraft noise. ^

Through the award, SARES honours scientists and researchers whose work on sustainable aviation issues has made an important contribution at the international level. The selection is based on the scientific publications of the applicant or nominee, the h-index, i.e. the key figure for the worldwide perception of a scientist in professional circles, the project topics and the project results.

Sappi has approved an investment in Kirkniemi Mill in Lohja, Finland which enables a switch in its energy sourcing to renewable bioenergy. With this investment the mill’s direct fossil greenhouse gas emissions will reduce by ca. 90 percent, which is equivalent to 230 000 tons of carbon dioxide annually.

The project, set for completion in early 2023, will contribute significantly to Sappi Europe’s decarbonisation roadmap by exiting coal at one of its last facilities partially using this fuel type. Biomass will then be used in Kirkniemi’s multi-fuel boiler, built in 2015. The move advances Sappi towards its 2025 targets which include reducing specific greenhouse gas emissions (scope 1 and 2) by 25 percent and increasing renewable energy share to 50 percent in Europe compared to 2019.

The investment will establish the equipment needed to receive, store and handle woody biomass like the bark, sawdust and wood chips used for biofuel production. Such biomass types are by-products from the forest-based industry and utilising them for energy production derives further value from the forest resource.

In addition to increasing share of renewable energy, Sappi’s mills are also focused on reducing energy consumption. Sappi Kirkniemi Mill is party to Finland’s National Energy Efficiency Agreement and consistently reaches their energy saving targets. Kirkniemi’s ISO 50001 certification provides further evidence of the mill’s systematic improvement in energy efficiency.

Indorama Ventures Public Company Limited (IVL) reported a strong 3Q 2021 performance amid record production volumes. The company maintained its positive outlook for the rest of the year and 2022, noting caution as headwinds including higher energy prices and supply chain disruptions weigh against resurgent consumer demand.

IVL reported EBITDA of US$478 million in Q3 versus US$552 million in the previous quarter and US$240 million a year earlier. Production volumes reached 3.73 million metric tons, a record, as the global recovery drove consumer demand for IVL’s products.

As the global economy recovers from the pandemic, consumer appetite and increasing Brent crude oil prices are testing supply chains and driving a commodity boom, with manufacturers running at full capacity. This has driven increases in freight prices and a shortage of materials.

Still, IVL posted a solid YTD performance, ending the first nine months of 2021 with EBITDA of US$ 1,512 million, up 123% YoY. The Integrated Oxides & Derivatives (IOD) segment will start to reap the full benefits of the hot commissioning of the Lake Charles gas cracker (IVOL) in Q4 and beyond, as well as continued advantaged shale gas economics.

In Q3, Project Olympus, the company’s cost saving and business transformation project, achieved US$63 million in efficiency gains, and is on track to achieve a total US$610 million of savings by 2023. IVL also implemented enhanced disclosures in governance, strategy, risk management, and metrics and targets, and launched a comprehensive financial policy and governance structure to accelerate environmentally driven projects.

IVL strengthened its Indorama Management Council (IMC) – the company’s highest operational management committee – by rotating experienced executives and adding the COOs of the Fibers and Integrated Oxides & Derivatives (IOD) segments. The appointments will help build the segments into self-sustaining organizations while also rotating expertise across the IMC.

3Q 2021 Performance Summary

• Consolidated Revenue of US$ 3,867M, an increase of 9% QoQ and 50% YoY
• EBITDA of US$ 478M in Q3 versus US$552 million, a decrease of 13% QoQ and an increase of 99% YoY
• Reported annualized EPS of THB 4.53 and core annualized EPS of THB 4.09

Knopf’s Sohn, a contract finisher of technical textiles, has installed a fully automated Montex stenter at its plant in Helmbrechts, Germany.
Knopf’s Sohn is processing technical textiles for the automotive, aerospace, home furnishings and workwear markets, based on wool, cellulose, polyamide and polyester fabrics, along with elastane blends, in weights of 80-800gsm.

The Montex machinery range is constantly being upgraded to meet evolving customer needs for greater automation, ease of operation and energy optimisation. The latest ten chamber line at Knopf’s Sohn, with a working width of up to 2.0 metres, was engineered to specific requirements in order to accelerate the company’s move to fully automatic control of its production, and high scaffolding was required for its installation.

The line benefits from two integrated ECO Booster modules to provide high energy savings. These compact, air-to-air heat exchangers, installed within the roof structure of the line, exploit energy from the exhaust gas to preheat up to 60% of the incoming fresh air entering the stenter.

The use of a single ECO Booster unit has been calculated to save up to 35% in energy costs, based on fixation processes. Fully automatic operation, set at the Monforts Qualitex control unit, ensures there is no additional burden on the machine operator.

The line is powered by Exxotherm indirect heating, which practically eliminates the yellowing which can be experienced during the treatment of certain polyamide and elastane-based fabrics, and is also equipped with a Conticlean circulating air filter system for constant high drying capacity.

Software
The latest Qualitex visualisation software offers operators reliability and easy control with its full HD multi-touch monitor and slider function, dashboard function with individual adaptation to operating states and faster access to comprehensive recipe data management.

With the Monformatic control system, the exact maintenance of the dwell time in combined treatment processes (drying and heat-setting) can be monitored. When the heat-setting point is reached, the fan speed is automatically adjusted, keeping energy consumption fully under control.

Recycling is the key factor in achieving the EU climate targets. This is shown by the results of the "resources SAVED by recycling" study published today, which Fraunhofer UMSICHT prepared on behalf of the ALBA Group, one of the ten leading recycling companies worldwide. According to the study, 3.5 million tons of greenhouse gas emissions and 28.8 million tons of primary resources could be saved in 2020 alone. Further potential could be raised, for example, through minimum quotas for the use of recycled raw materials.

“Fit for 55” thanks to the circular economy: the recycling of raw materials leads to a systematic reduction in the greenhouse gas emissions of our civilisation – and can therefore make a key contribution to achieving the EU climate goals. This is the outcome of the “resources SAVED by recycling” study presented today, which the Fraunhofer Institute for Environmental, Safety and Energy Technology UMSICHT prepared on behalf of the ALBA Group. Thanks to the closed-loop circulation of 4.8 million tonnes of recyclable materials, the ALBA Group succeeded in preventing some 3.5 million tonnes of climate-damaging greenhouse gas emissions in the year 2020 alone. This amount is equivalent to the emissions from some five million return flights between Frankfurt am Main and Mallorca. At the same time, recycling also secures valuable raw materials for the industry: in 2020, in comparison with primary production, recycling saved 28.8 million tonnes of resources, such as crude oil and iron ore.

“The circular economy is one of the strongest pace-setters on the journey to achieving climate neutrality,” highlights Dr. Axel Schweitzer, CEO of the ALBA Group. “We will only achieve the goal of reducing greenhouse gas emissions by at least 55 per cent throughout Europe by 2030 if we make consistent use of recycled raw materials.” This includes the area of plastics, for example: compared with primary plastics made from crude oil, the use of high-quality recycled plastics achieves a reduction of greenhouse gas emissions of more than 50 per cent. “It is now necessary to lever this potential,” explains Schweitzer. “We are expecting the new Federal Government in Germany to act decisively and push ahead directly with the transition to a circular economy. The environmental benefits of recycling due to its clearly superior CO2 balance should also find reflection in prices. As immediate climate protection measures, clear industry standards for recyclates combined with minimum quotas on the use of recycled raw materials in products and packaging are also urgently necessary. Last but not least, the state sector is also called upon to prioritise resource protection in the area of procurement. Sustainable procurement can ultimately provide a significant boost to the circular economy”.

Plastics, metals, waste electrical (and electronic) equipment, wood, paper, cardboard, cartons or glass: the Fraunhofer UMSICHT has now been researching the specific benefits of recycling for 14 years. Detailed comparisons have also been made of the primary processes and recycling processes for the various material flows. “This means we can precisely quantify the extent to which the recycling activities of the ALBA Group can contribute to reducing the burden on the environment,” explains Dr.-Ing. Markus Hiebel, Director of the Department for Sustainability and Participation at Fraunhofer UMSICHT. Hiebel believes that the greatest savings can be achieved if the entire value chain is aligned consistently with the circular principle: “The transformation towards a genuine circular economy requires completely new thinking. Products should be designed and managed to ensure that they contain recycled raw materials right from the start – which enables them to be recycled appropriately.”

The Indorama Mobility Group, a manufacturer of industrial fibers, cords and fabrics, - like other companies - is confronted with significant inflation since the beginning of the year. The global economy has gradually recovered in 2021 from the impact of the COVID-19 pandemic, but is still experiencing very volatile market conditions: The global freight remains unreliable and expensive, cost for energy and global commodities is increasing, and the increasing focus on sustainability and environmental impact is driving compliance cost upward in most part of the world.

In detail:

• Utilities: gas price has tripled in the past few months in Europe (from a level of 15 EUR/MWh in Q4’20 to 45 EUR/MWh recently), while increasing by 50% in USA
• CO₂ emissions and compliance cost: prices for CO₂ certificates in Europe have almost doubled, approaching 60 EUR/ton from 30 EUR/ton at the end of last year, while regulations continue to expand the need for CO2 compensation
• Chemicals and additives (spinfinish, dip chemicals, coating & laminating chemicals): cost have increased by 5%
• Packaging: prices for standard packaging materials have increased by more than 30%
• Logistic: despite our local manufacturing footprint which is not fully affected by global freight issues, the regional logistic costs are also increasing up to 20% (road transport)

Despite constant efforts to optimise the cost structure through comprehensive initiatives to improve operations, cost increases have now reached a level, the group said, that can no longer be offset and must be passed on to the market. This is a necessary step to be able to continue supplying high-quality products and services of the broad product portfolio, it said.

As part of Suominen Corporation’s Half-Year Financial Report for January 1 – June 30, 2021 the company shared their insights and actions defined in their sustainability agenda.
A new Code of Conduct was launched in the beginning of 2021 and a mandatory training program about the Code will be start in the third quarter of this year.

Suominen is committed to continuously improving their production efficiency and the efficient utilization of natural resources. What active measures towards reducing energy consumption, greenhouse gas emissions, water consumption and waste to landfill are concerned, the commitment is to diminish them by 20% per ton of product by 2025 compared to the base year of 2019.
Offering a comprehensive portfolio of sustainable nonwovens and continuously developing new and innovative solutions with a reduced environmental impact, the target is a 50% increase in sales of sustainable nonwovens by 2025 compared to 2019, and to have at least 10 sustainable product launches per year. During the first half of the year, nine sustainable product launches were made.

OUTLOOK FOR 2021
As announced on August 12, 2021 Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2021 will decrease from 2020 due to the slowdown in the demand for nonwovens in the second half of 2021 as well as some continuing volatility in the raw material and transportation markets. In 2020, Suominen’s comparable EBITDA was EUR 60.9 million.

• Textile Exchange report shows growth of preferred fiber and materials market needs to be accelerated
• With post-pandemic fiber production increasing, the transition to preferred fibers and materials must be a non-negotiable decision, notes Textile Exchange.

According to a new Textile Exchange report, the market share for preferred fiber and materials grew significantly in 2020. The Preferred Fiber and Materials Market Report 2021 outlines the market for plant fibers such as cotton, hemp, and linen; animal fibers and materials such as wool, mohair, cashmere, alpaca, down, silk, and leather; manmade cellulosics (MMCFs) such as viscose, lyocell, modal, acetate, and cupro; as well as synthetics such as polyester, polyamide, and more.

The report is a unique annual publication about global fiber and materials production, availability, and trends, including those associated with improved social and environmental impacts, referred to as ”preferred.” The comprehensive report includes quantitative data, industry updates, trend analysis and inspiring insights into the work of leading companies and organizations as they create material change.

The results show that between 2019 and 2020 the market share of preferred cotton increased from 24 to 30 percent and recycled polyester from 13.7 to 14.7 percent. Preferred cashmere increased from 0.8 to 7 percent of all cashmere produced while Responsible Mohair Standard certified fiber expanded from 0 to 27 percent of all mohair produced worldwide in its first year of existence in 2020. The market share of FSC and/or PEFC certified MMCFs increased to approximately 55-60 percent. While the market share of recycled MMCFs is only 0.4 percent, it is expected to increase significantly in the following years.

Brands’ increased interest in the use of preferred fibers and materials was also demonstrated by 75 percent increase in the total number of facilities (to 30,000) around the world becoming certified to the organization’s portfolio of standards in 2020. However, the report also notes that despite the increase, preferred fibers only represent less than one-fifth of the global fiber market. Less than 0.5 percent of the global fiber market was from pre- and post-consumer recycled textiles.

Indeed, global fiber production has almost doubled in the last 20 years from 58 million tonnes in 2000 to 109 million tonnes in 2020. While it is not yet clear how the pandemic and other factors will impact future development, global fiber production is expected to increase by another 34 percent to 146 million tonnes in 2030 if the industry builds back business as usual. If this growth continues, it will be increasingly difficult for the industry to meet science-based targets for climate and nature.

Textile Exchange aims to be the driving force for urgent climate action, and its Climate+ strategy calling for the textile industry to reduce greenhouse gas emissions by 45 percent by 2030 compared to a 2019 baseline in the pre-spinning phase of textile fiber and materials production, while also addressing other impact areas interconnected with climate such as water, biodiversity, and soil health.

The Turkish company ARIKAN Mensucat Industry and Trade Inc. was founded in 1993 and is located in Kahramanmaraş, one of the southernmost cities of the country. Today, the family-owned company employs around 1,500 people and finishes around 55 tons of knitwear every day. In addition to many well-known Turkish fashion manufacturers, ARIKAN also supplies international manufacturers in Europe, Russia, the Gulf States and other leading international markets.

The German machinery manufacturer BRÜCKNER supported the Turkish company from the very beginning. From the foundation of the dyeing and finishing plant, BRÜCKNER supplied three stenters for the finishing of the high-quality knitted fabric in 2014. Two more lines followed in 2016. For decades, BRÜCKNER has been the market leader for the finishing of knitted fabric. Especially for very fine and elastic fabric, special line configurations and technological know-how are necessary to be able to produce a high-quality end product. During the drying and heat-setting process, for example, extremely accurate and uniform temperature distribution over the entire length and width of the dryer is essential. In the BRÜCKNER stenter this is achieved, among other things, by the alternating arrangement of the thermal zones every 1.5 meters and by the proven split-flow air system.

The machine operators at ARIKAN appreciate the easy control of BRÜCKNER lines. The visualization is intuitively designed and offers many auxiliary systems for an optimized production process. In addition, significant energy savings can be achieved with just a few changes to the machine parameters.

The management at ARIKAN attaches great importance to energy saving, especially in the fabric finishing department. The drying process is one of the most energy-intensive in the entire process chain, therefore the biggest savings can be made here. These have a direct impact on the manufacturing costs of the textiles and thus on competitiveness in the market. In the meantime, talks are already in progress for another BRÜCKNER line which will include a very special feature: a combined heating system for the dryer. For many customers - and so also for ARIKAN in Turkey - e.g. steam energy is available free or very cheap. With the combined heating system developed by BRÜCKNER it is possible to use this steam energy for heating up the dryer and thus to achieve significant savings. If the available steam is not sufficient for a running process, it is automatically switched over to gas heating. This mode of operation does not only have an effect on the energy costs, but also makes a considerable contribution to environmental protection.