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Global Warming

Hambrecht, Holliday See Chemical Industry As Offering Solutions

by Jean-François Tremblay
March 19, 2007 | A version of this story appeared in Volume 85, Issue 12

Credit: Jean-François Tremblay/C&EN
Credit: Jean-François Tremblay/C&EN

In 2002, Europe agreed to comply with the Kyoto protocol for reducing emissions of climate-changing carbon dioxide. The U.S. did not sign on, however, and developing countries that did are facing less stringent requirements.

When BASF announced its 2006 financial results in Ludwigshafen, Germany, last month, the company's chairman, Jürgen Hambrecht, made it clear that he was displeased with this situation.

A few days later in Hong Kong, Charles O. Holliday Jr., DuPont's chairman and chief executive officer, emphasized that U.S. industry is starting to address its emissions. Citing DuPont as an example, he argued that it is possible for a chemical company to reduce its emissions, maintain profitability, and increase sales.

Hambrecht tells C&EN that it makes little sense to force companies to reduce their emissions in Europe alone. For one thing, it puts Europe's manufacturing sector at a competitive disadvantage. Moreover, such an approach cannot be effective, he says. "The major problem I have with this is that Europe cannot take care of the whole world's atmosphere," he says.

Exacerbating the challenge, Hambrecht says, is that European manufacturers are not allowed to offset their emissions by improving energy efficiency in other countries. "Instead of spending a fortune to reduce emissions by perhaps 1% here, we should act where costs are lower and we can reduce emissions by 10, 20, or even 50% more easily," he says.

Rather than being part of the problem, the chemical industry is an important provider of materials that can be used to reduce CO2 emissions, Hambrecht points out. Polystyrene produced by BASF, for example, can be used to provide home insulation. "We have built a house that needs only 3 L of oil equivalent per square meter per year to heat and cool," he notes. This is one-tenth of the usual energy consumption in most homes, he says.

Holliday supports Hambrecht's contention that chemical companies play a key role in providing insulation materials that help homes become more energy-efficient.

But, he says, it is a misconception that U.S. companies are getting away with emitting as much CO2 as they like while European companies are hampered by costly requirements. "At DuPont's plants in Germany and other parts of Europe, we have to comply with European requirements," Holliday tells C&EN. "Besides, we apply best-of-class technology at all our plants around the world."

The U.S, along with India and China, are central actors in the emissions issue, Hambrecht says. "North America is where most of the emissions are generated," he says.

Differences aside, both BASF and DuPont have emissions reduction goals. DuPont plans to use more energy-efficient vehicles, reduce its water consumption 30% over the next 10 years, and reduce its CO2 emissions 15% by 2015 from their 2004 levels. BASF is seeking to reduce its emissions of greenhouse gases per ton of product sold by 10% in the 10 years from 2002 to 2012. The company claims that by last year it already had reduced greenhouse emissions by 12%, as compared with 2002.

Holliday agrees with Hambrecht that it is important for industry in the U.S. to take steps to reduce emissions. "The U.S. is a laggard now," he says. "If the U.S. starts doing more, it might incite others."

By taking a free-market approach to the problem, countries can avoid reductions in jobs and corporate profits, Holliday says. DuPont is focusing on developing new materials from green plant sources that will create new markets while reducing overall CO2 emissions, he explains. Futhermore, DuPont is one of the founders of the U.S. Climate Action Partnership, a coalition of major companies and nongovernmental organizations lobbying for carbon emissions trading and other measures.

Both Hambrecht and Holliday say there are still many questions surrounding climate change, and focusing exclusively on CO2 emissions may not be enough. "It makes intuitive sense that we should reduce our overall impact on the environment," Holliday says.

"The term climate change is understood to mean there is a fundamental change, which I am not sure is correct," Hambrecht says. But not knowing all the answers is not an excuse for inaction. "Until we answer the remaining questions, we need to do something, and the easiest way is to save primary resources."

Read More

  • 'The Chemical Company'
  • Riding on record profits, BASF fits recent acquisitions into its expansive 'Verbund' business model
  • Global Warming
  • Hambrecht, Holliday See Chemical Industry As Offering Solutions


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