At the UEIL Congress 2023 in Manchester, Elisa Swanson-Parbäck, Business Development Director for Sustainable Lubricants at Perstorp, presented on the challenges and strategies involved in building resilient and sustainable raw material supply chains.
Perstorp, a Swedish company with over 140 years of experience, is a global leader in specialty chemicals and provides key components for synthetic base stocks in the lubricant market. As a relatively new member of UEIL, Swanson-Parbäck aimed to introduce Perstorp and shed light on their approach to sustainable raw materials. The presentation highlighted the growing complexities in the raw material supply chain and emphasized the need for collaboration, innovation, and sustainability in decision-making processes.
Increasing Complexity in Raw Material Supply Chains
Swanson-Parbäck outlined the various factors that have contributed to the increasing complexity in raw material supply chains. Firstly, the globalization of businesses has led to the need for raw material approvals from different regions, along with the management of a global portfolio of raw materials. Additionally, regulatory variations across different regions, particularly with the introduction of REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals), have added further complexity to the industry. The reclassification of raw materials under REACH has triggered reformulation needs, requiring lubricant blenders to adjust their product portfolios. Moreover, emerging industries, such as the battery industry for green energy transition, have posed competition for raw materials, leading to additional challenges for grease manufacturers.
The Impact of the Pandemic and Sanctions
The COVID-19 pandemic highlighted the vulnerability of global supply chains. Lockdowns, border closures, and transportation difficulties disrupted the flow of raw materials, causing significant challenges for businesses heavily reliant on global supply chains. Swanson-Parbäck cited a European Commission report stating that 75% of companies reported supply chain disruptions due to the pandemic. Furthermore, import restrictions and sanctions have become more prevalent, creating additional obstacles for businesses that depend on a single supply of raw materials and complex value chains.
The Growing Significance of Sustainability
Sustainability has emerged as a major factor in raw material selection and supply chain management. Swanson-Parbäck highlighted the German supply chain act and the stricter European Union (EU) version expected to come into effect, emphasizing the need for companies to consider sustainability in their operations. Perstorp recognizes the importance of sustainable raw material streams and focuses on reducing dependence on virgin fossil fuels, minimizing the carbon footprint, and ensuring no disruption to food production.
Sustainable Raw Material Options and Challenges
Perstorp leverages waste fats and oils containing valuable natural fatty acids from sources such as forest and agriculture residue, and bio-waste. However, competition for these raw materials from other energy-intensive industries has intensified as more industries embrace sustainability. To address this challenge, Perstorp emphasizes the use of traceable mass balance, which enables the transition to renewable and recycled raw materials without requiring the construction of new production facilities. This approach decreases dependency on virgin fossils and lowers the carbon footprint without compromising quality, performance, or regulatory compliance.
Traceable Mass Balance and Certification
Traceable mass balance allows Perstorp to track the volumes of renewable and fossil feedstocks throughout the value chain, ensuring transparency and accountability. Swanson-Parbäck emphasized the importance of third-party certification to establish trust among value chain partners. Perstorp's traceable mass balance, raw materials, production processes, and products are certified by ISCC PLUS, the strictest of the different mass balance accreditations. This certification further enhances the company's sustainability claims.
Project Air: Advancing Sustainability through Methanol Production
To demonstrate their commitment to sustainability, Perstorp initiated Project Air in 2019. This project involves the construction of a Carbon Capture and Utilization (CCU) plant in Stenungsund, Sweden. The plant will convert carbon dioxide emissions captured from Perstorp's operations, along with other residue streams, biogas, and renewable hydrogen, into methanol. Renewable hydrogen will be supplied by a hydrogen electrolysis plant established by Uniper. Project Air will significantly reduce CO2 emissions, contribute to the Fit for 55/Green Deal policy objectives, and help build resilience in supply chains by providing renewable methanol through traceable mass balance.
Swanson-Parbäck concluded by acknowledging the increasing challenges in raw material supply and the complexities faced by the lubricant industry. To overcome these challenges, she emphasized the importance of cross-functional collaboration among purchasing, innovation, regulatory, and sustainability departments. Building resilient supply chains requires proactive strategies, such as traceable mass balance, third-party certification, and embracing sustainable alternatives. By taking these steps, companies can navigate the complexities of raw material supply chains, contribute to sustainability goals, and deliver products with substantially lower carbon footprints.
In an ever-evolving landscape, Perstorp's approach to sustainable raw materials provides valuable insights for the lubricant industry and beyond, highlighting the importance of adaptation, collaboration, and innovation to ensure a sustainable future.
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