Intensive in the use of fossil raw materials and water resources, the chemical industry needs to transform itself or there will be no possible future. The impasse will be due to pressure from consumers, legislation and investors. Analyzing the macro scenario in this interview to DINHEIRO, Daniela Manique, president in Latin America of the Solvay Group, Belgium’s largest chemical company and owner of the Rhodia brand, which has operated in Brazil since 1919, assesses that the country is undergoing a profound tax reform , facilitates access to clean energy and modernizes legislation, or chemical companies installed here will lose competitiveness in the global market. On the private sector’s side, it sees the search for renewable raw materials and carbon pricing as mandatory paths towards the green economy. “You can’t pollute for free. We have to at least compensate for our impacts”, he stated.
About two years ago, the pressure for ESG practices (environmental, social and governance) became more latent due to capital, a journey that the group began in 2007. How is the process going?
In fact, we started earlier. The Paulínia (SP) plant, Solvay’s second largest in the world, started green. During World War II, we received sugarcane and ethanol from the northeast. With the bombings, we were left without the goods that came by ship. It was then that the group bought a coffee farm and turned it into a sugarcane plantation [a área, que se tornou a fábrica de Paulínia, foi comprada nos anos 40]. We started to produce our ethanol and acetic acid, starting green chemistry in Brazil. In 2007, what we did was to make our practices official in a structured program. In the future, there will be no chemical industry that is not responsible.
What are the company’s main commitments in ESG?
Last year, we launched the 2030 sustainability program, Solvay One Planet, with ten goals to drive progress across three pillars: climate, resources and a better life. One of them is to reach decarbonization by 2025. In Paulínia, we have already reduced emissions by 96%. Globally, we had the goal of having 50% of our products coming from a sustainable source by 2025. We anticipate the result for 2019. Now, the focus is to reach 65%. In Brazil, we have a line of green solvents based on glycerin, but unfortunately the Brazilian market does not show great interest and 80% of production is exported. We also produce the world’s first biodegradable polyamide, made in Santo André (SP), our textile base. Two 100% Brazilian technologies.
Why are green solvents not receiving attention from the Brazilian market?
In chemicals, the transformation of customers towards more responsible attitudes is driven by consumers, but much more by regulation. One example is California, considered a premium market, where all manufacturers of home care and personal care products – our main market – want to be. It was society that pressured and the public authorities adjusted the legislation in this direction. In Brazil, as we do not have this awareness among consumers and where price sensitivity is great, we are still in the initial process of transformation.
The chemical industry is based on the petroleum industry. How much of the production is renewable?
In Brazil, the share is still small. Close to 10%. But we are evolving. We are seen by the group as the breadbasket of green chemistry and all our research and development is focused on renewable raw materials. Our challenge now is to launch a line of carbon neutral products, considering the entire chain.
What transformations do you see ESG causing in the industry?
The first one is consumer change. Whether individuals or companies, they are pushing for more sustainable products. We will have to be more renewable and, in what we cannot achieve, we will have to compensate for the impacts. It is no longer acceptable for companies to pollute for free. In this way, I believe in carbon pricing. Whoever pollutes has to pay.
Is there interest in the carbon market?
For a long time, we traded carbon credits in our greenhouse gas abatement unit, the Angela project, in Paulínia. Today, we continue with the project even without payment for the credits. Even though I believe this will be priced in, this project is important to us not for remuneration, but to neutralize our product line.
What are the big difficulties that chemical companies are facing in the green economy?
It is very difficult to remain competitive if the company prioritizes clean energy. The competition between those who invest in wind and solar energy against those who burn coal is unfair. In Brazil, the issue of taxation is very painful. I don’t want subsidies or privileges, but at least leave all players on an equal footing. Another example: I support the use of natural gas, but I don’t want to pay four times as much for it.
What are the risks of a careless policy for the chemical industry?
I’m afraid we have an episode in Brazil like the Port of Beirut: an abandoned chemical charge that causes an explosion. And that can happen at any minute because imported products arrive here without any security.
Is ESG compliance costly for the company?
All the ethanol I buy must have a worldwide certification attesting to good practices. I pay more for it. Our glycerin is vegan and I have attested to it. Outside we have to show these stamps and they pay the prize. There is no such thing here. This whole process makes the product more expensive, yes. But it needs to be done.
Is this transformation changing the business rule?
In the international market, yes. Here will have to change. The group is looking at suppliers critically. Those who use charcoal are being excluded. Our customers have already informed that they are interested in purchasing carbon neutral products and those that will be produced on our sites certified with the Green Site Certificate (an international seal that the company works to obtain). Furthermore, to attract a new generation of collaborators, we either change our mindset or stay out of choice. ESG isn’t just about a better planet. It’s an economic issue.