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C&EN’s World Chemical Outlook 2022

Our analysis of the key policies, market trends, and economic forces that will affect chemistry worldwide as the pandemic continues

by C&EN staff
January 12, 2022 | A version of this story appeared in Volume 100, Issue 2
An illustration of a globe composed of red, blue, and gray hexagons.

Credit: C&EN/Shutterstock





Chemical industry eyes scope 3 greenhouse gas emissions

by Craig Bettenhausen


As more organizations commit to achieving net-zero greenhouse gas (GHG) emissions by 2050, they are increasingly considering the scope of the emissions included in that goal. In 2022, that scope will widen significantly for chemical companies in response to shareholder and customer pressure.


• The chemical industry’s customers are demanding carbon reduction up and down the value chain.

• Most chemical companies report upstream and downstream emissions; few detail reduction plans.

• Changing feedstocks is one powerful way chemical firms can reduce upstream emissions.

Almost all chemical companies have specific and public targets for reducing what are known as scope 1 and 2 emissions: the carbon emitted from their manufacturing processes and from generating the energy to run their overall operations, respectively.

Information about scope 3 emissions—the upstream carbon footprint of raw materials and the downstream emissions associated with the use and disposal of products—is harder to find in sustainability reports and other corporate documents. And most companies don’t include scope 3 emissions in their publicized emission reduction goals.

In 2022, the norm in the chemical industry will start moving from measuring and reporting scope 3 emissions toward making plans and setting public goals to reduce them. The push to do this will come largely from the industry’s customers, which are demanding that suppliers rapidly cut all types of emissions.

Setting boundaries
Scope 1 emissions include those from a company's production and other internal operations, such as the carbon dioxide produced by yeast in a bioreactor. Scope 2 adds most forms of power. Scope 3 captures the rest of the value chain and is more complex; it has more overlap between companies and their customers. Many chemical firms count only some scope 3 categories against their sustainability goals—and a few don't publicly track scope 3 at all.

Source: GHG Protocol. a Hydrofluorocarbons. b Perfluorocarbons.

David Yankovitz, who leads the chemical group at the consulting firm Deloitte, says scope 3 emissions are on the minds of the industry’s sustainability executives, but few firms have detailed plans to reduce them. Because chemical firms are often far removed from their products’ final uses, he says, it can be hard to calculate scope 3 emissions.

The industrial gas company Linde offers one of the more robust treatments of scope 3 emissions among the firms C&EN analyzed, but even it doesn’t try to make a complete accounting of them. “Linde is at the beginning of numerous value chains and provides many intermediate products with many downstream applications, each of which has a very different GHG profile,” the firm says in its Sustainable Development Report 2020. “Linde does not estimate the downstream emissions associated with the various end uses of all its products.” That sentiment echoes throughout the chemical industry.

Chemical companies have more control over their upstream scope 3 emissions. They can score big cuts by switching from fossil-derived raw materials to biobased and recycled feedstocks, says Robert Kumpf, a chemical and materials specialist at Deloitte. Chemical recycling of plastic is developing quickly, Kumpf says, and approaching commercial scale. “That’s an innovation from the chemical industry that’s being implemented right now and is a way to lower the amount of pure virgin feedstock.”

Even if chemical companies are slow to embrace scope 3 accounting, their consumer-facing customers are barreling ahead. According to the consulting firm McKinsey, $1.5 trillion of the chemical industry’s sales are under scope 3 scrutiny by customers, and 50% of brand owners are promising low-carbon products to consumers.

To get there, brands need their suppliers to cut emissions, Kumpf says. “There’s a broad understanding of the ecosystem aspect. If everyone takes care of their own business, emissions will reduce in scope 1 and scope 2, and that will reduce scope 3. We’re all in this together.”


Greenhouse Gases

Chemical firms will lead heavy industry into carbon capture

by Craig Bettenhausen
Credit: Shutterstock
Air Liquide, Air Products, ExxonMobil, and Shell are all considering adding carbon capture to their hydrogen production operations at the port in Rotterdam, the Netherlands.


The chemical industry has a special relationship with carbon capture (CC): it’s both a potential customer and a key technology supplier. That dynamic will put chemical firms at the center of the CC market in 2022 and the years beyond as new, flexible technologies become real, functional, carbon dioxide–capturing products.


• Carbon capture will be needed to get chemical production to net-zero carbon dioxide emissions.

• Chemical firms own a lot of carbon-capture technology and are poised to capture some of the industry’s growth.

Many chemical plants release CO2 as part of the reactions they employ. No amount of energy efficiency or renewable power can abate such process emissions, though better routes are in the works for some transformations. At the same time, CC is a chemical process. Chemical firms have a lot of the needed know-how, and the start-ups coming to market are full of chemists and chemical engineers.

The most mature CC technology today dissolves CO2 in aqueous amine solutions. That approach works well on the huge, consistent gas volumes that come from power plants and natural gas purification facilities. But chemical plants often have many small pipes venting a wide variety of gas mixtures.

CC firms are developing technology to meet that need. In late 2021, Carbon Clean launched a modular CC unit small enough to deploy several at different locations around a chemical plant. Aker Carbon Capture has a modular offering as well. Both systems use next-generation amines.

Other firms are rolling out next-generation CC systems based on membranes, cryogenics, and solid sorbents.

According to Emma Martin-Roberts and coworkers at the University of Edinburgh, CC will need to provide up to 15%—5.6 billion metric tons per year by 2050—of the global CO2 reductions needed to avoid the worst effects of climate change.

Investments are starting to pour in. More than 100 new CC projects were announced in 2021, up from 18 in 2019, according to an analysis by Samantha McCulloch of the International Energy Agency. That roster is led by facilities that capture CO2 from the production of hydrogen and biofuels.

In 2022, expect to see CC to become part of the chemical industry’s social license to operate. Also expect even more project announcements, both for chemical plants and for other hard-to-abate heavy industries like steel and cement.

CORRECTION: This story was updated on Feb. 22, 2022, to correct an estimate of how much carbon dioxide needs to be removed from the atmosphere by carbon-capture methods to avoid the worst effects of climate change. It is 5.6 billion metric tons per year, not 5.6 million metric tons per year, by 2050.



Cleantech is poised for another year of eye-popping investments

by Matt Blois
Credit: Shutterstock
An investment arm of Koch Industries has funneled more than half a billion dollars into battery companies since November 2020.


Companies working in clean technology raised huge amounts of money last year. Some investors believe the environment is ripe for even bigger numbers in 2022.


• Consumer demand and government incentives are spurring investment in clean technology.

• Technologies are still maturing, which means funding bets are risky.

$7.9 billion

Funding for energy storage companies during the first three quarters of 2021


Increase in funding for energy storage companies compared with the same period in 2020

Source: Cleantech Group

The consulting firm Cleantech Group reports that industrial biotech businesses, which include companies, like Impossible Foods, that are focused on plant-based proteins, raised $2.4 billion during the first three quarters of 2021, more than in all of 2020. Energy storage companies raised $7.9 billion, more than in 2019 and 2020 combined.

Ian Hayton, Cleantech’s biomaterials and biochemical analyst, says there’s a clear upward trend, driven by public policies promoting environmentally friendly technology and consumer pressure to produce products more sustainably.

Koch Industries in November 2020 formed an investment arm, Koch Strategic Platforms, in part to take advantage of the momentum of clean energy companies. The group has invested more than half a billion dollars into nearly every aspect of the battery life cycle. The transition toward electric vehicles will spur more investment, according to Koch Strategic Platforms managing partner Jeremy Bezdek. “We’re at that pivot point for the growth of this industry,” he says.

For industries that need a fuel other than electricity, Michael Finelli, a Solvay executive who sits on a committee that selects the chemical company’s venture investments, says hydrogen could be a viable clean fuel. He estimates that 500 hydrogen start-ups have launched in the past 18 months. “We don’t know who the winners are going to be, but there will be winners,” Finelli says.

That implies that there will also be losers. At some point, says Joško Bobanović, who oversees an industrial biotech investment fund at the venture capital firm Sofinnova Partners, obsolete technologies will fall by the wayside and true advancements will rise to the top. Investors will lose money on failures, but that’s no reason to bet against clean technology, he says. “This is just the beginning. We are just scratching the surface in terms of investment amount.”



The plastics industry needs broad changes to reduce its carbon footprint

by Alexander H. Tullo
Credit: Carlsberg
Carlsberg binds its cans together with an adhesive instead of using plastic rings.


In recent years, the plastics industry—shamed by the public over the amount of discarded plastic landing in oceans and waterways—has mobilized to do something about the waste problem it helped create.


• Plastics demand is on pace to nearly double by 2050, with a nearly proportional increase in greenhouse gas emissions.

• To improve its carbon footprint, the plastics industry and its customers will need to rethink plastic packaging and manufacturing methods.

But the plastics industry’s environmental impact doesn’t end at solid waste. The business also has a substantial greenhouse gas footprint. According to a recent report from the consulting firm Wood Mackenzie, the roughly 360 million metric tons (t) of plastic produced in 2021 generated about 1.2 billion tof carbon dioxide equivalent emissions.

If the industry changes little—what the report calls the base case—plastics production will grow by 90% by 2050. Emissions will grow 75%, to 2 billion t. “We see a slight carbon efficiency improvement in the industry in the base case,” says Guy Bailey, head of intermediates and applications at Wood Mackenzie and one of the report’s authors. Such efficiencies will come from incremental improvements, such as newer equipment and novel catalysts.

However, the report envisions that more aggressive interventions by plastics makers and their customers could lead to a “peak plastic” scenario, in which the market for plastics produced from fossil fuels grows 30% by 2040, then starts to contract. Under that scenario, emissions max out at about 1.5 billion t in 2035 and by 2050 sink to the levels of today.

Reaching such a goal will require a sharp reduction in plastics consumption by streamlining, or even eliminating, plastic packaging in some applications. The Wood Mackenzie report says such changes may reduce plastics demand 13% by 2050.

Companies are starting to take small steps in this direction. Walmart, for example, eliminated the plastic window on the cardboard box for a line of dolls, opting to put a picture of the toy on the box instead. The brewer Carlsberg is gluing together six packs of beer cans instead of binding them with plastic rings. Some firms are choosing different business models altogether. PepsiCo aims to expand its SodaStream make-it-yourself beverage business in an effort to circumvent the production of 200 billion plastic bottles by 2030.

Achieving peak plastic will also require the industry to adopt biobased feedstocks, as it has with polylactic acid polymers. It will also require a sharp scale-up in chemical recycling of plastics using routes such as pyrolysis and depolymerization, Wood Mackenzie says.



Plastics and chemicals will be on the global environmental policy agenda

by Cheryl Hogue
Credit: Shutterstock
The United Nations Environment Assembly could form an international science policy panel on chemical pollution this year.


UN Environment Programme turns 50

A half century ago, delegates from around the world gathered in Stockholm for the first high-level global conference on the environment.

The influential 1972 United Nations Conference on the Human Environment highlighted the importance of a healthy environment to people’s well-being and marked a key step in the development of international environmental law. At the gathering, governments announced an agency to oversee and coordinate international action to protect and clean up the environment, the UN Environment Programme (UNEP).

For the past 50 years, UNEP has played a pivotal role in developing treaties to protect stratospheric ozone and biodiversity. It has been central to agreements to control greenhouse gas emissions, international shipments of hazardous waste, and the manufacture and use of persistent organic pollutants. And UNEP is deeply involved in implementing global sustainable development goals. Those 2015 goals grew from principles adopted at the 1992 UN Conference on Environment and Development in Rio de Janeiro, when UNEP marked its 20th anniversary.

This June, the UN’s top governing group, the General Assembly, is convening a 50th anniversary conference in the Swedish capital. The meeting, Stockholm+50, is focused on what UN organizers call the “triple planetary crisis” of climate change, the increase in pollution and waste, and the loss of nature and biodiversity.


Plan for treaty on plastics may get green light

The UN Environment Assembly (UNEA) will vote in February on whether to negotiate a global agreement to keep discarded plastic out of the environment. The US plastics industry and environmental and health groups back the creation of such an accord, though whether it would cover the entire life cycle of plastics or more tightly focus on keeping plastics out of the environment has not been decided.

Credit: Shutterstock
The United Nations says 8 million metric tons of plastic ends up in the world’s oceans each year.


Plastic additive to face scrutiny for global restriction

Governments will decide this year whether an additive widely used to protect plastics from degradation by ultraviolet light should be globally restricted or banned.

The substance is UV-328, a benzotriazole UV stabilizer. Because the additive is not bound to the polymers in which it is used, it can migrate into the environment. UV-328 spreads globally via plastic debris carried by oceans, according to the UN. Consequently, the chemical is found in the environment far from where it is produced and used, including in the Arctic. Researchers have also detected UV-328 in breast milk.

The European Chemicals Agency classifies UV-328 as persistent, bioaccumulative, and toxic. Last January, an international panel of scientific experts determined that UV-328 is persistent, is bioaccumulative, and has the potential for long-range environmental transport and adverse effects in humans or the environment.

Countries that are partners to the Stockholm Convention on Persistent Organic Pollutants will decide at a meeting, tentatively scheduled for June, whether to restrict or ban the chemical’s production and use.


UN could form science advisory group on chemical pollution

UNEA is expected to decide in February whether to establish a science policy body on chemicals and waste. The group would be modeled on the UN Intergovernmental Panel on Climate Change. Nearly 1,900 researchers from around the world have signed a petition calling for the formation of an Intergovernmental Panel on Chemical Pollution that would conduct scientific assessments and advise policy makers.



US chemical industry looks to put pandemic woes behind it in 2022

by Alexander H. Tullo
Credit: Shutterstock
The weak supply chain was the source of many of the chemical industry's woes in 2021.


The economy has been recovering from the COVID-19-induced downturn of 2020, when lockdowns that were meant to prevent SARS-CoV-2 from spreading halted business in sectors such as the auto industry and air travel. But an economy springing back to life is posing new challenges—namely, kinks in the supply chain and high rates of inflation, both driven by surging demand for goods.


• The US chemical industry returned to growth in 2021, but a supply chain crunch prevented it from being stronger.

• With logistical obstacles clearing, economists expect stronger growth in 2022.

• The biggest risk to the US economy is continued high inflation.

The US chemical industry turned around in 2021, posting 1.4% growth in production volume, excluding pharmaceuticals, versus a 3.5% decline in 2020, according to a year-end report from the American Chemistry Council (ACC). Nevertheless, the recovery didn't realize its full potential. "Tangled global supply chains and adverse weather events constrained US chemical production in 2021," the trade group says in the report.

A shortage of labor, such as truck drivers, choked logistics and raised freight rates. Moreover, bad weather hit the industry hard, the ACC notes. A winter freeze in Texas last February shuttered some chemical plants for months, and a hurricane in August halted production again.

The crimped auto industry—plagued by a microchip shortage that has slowed and even shut down assembly lines—has hampered producers of engineering polymers and emission control catalysts. LMC Automotive, a market research firm, estimates that the US industry lost 2.4 million units of production.


Growth in US chemical output is expected to rebound this year.

Source: American Chemistry Council.
a Predicted.
Note: "Chemical production" excludes pharmaceuticals.

Source: American Chemistry Council.
a Predicted.
Note: "Chemical production" excludes pharmaceuticals.

Source: American Chemistry Council.
a Predicted.
Note: "Chemical production" excludes pharmaceuticals.

Executives are frustrated. "We've seen across all of our markets very strong primary demand at the consumer level for our products that has generated a lot of growth for us, but it has been limited by supply chain constraints," Eastman Chemical CEO Mark Costa told C&EN in a December 2021 interview. "We're going to set record earnings this year. So you know we are doing quite well, but we could have done even better if it wasn't for those constraints."

The ACC forecasts that chemical production will bounce back to 4.3% growth in 2022. "There are signs that the bottlenecks are easing," ACC chief economist Martha Gilchrist Moore said at a recent press conference.

We’re going to set record earnings this year. So you know we are doing quite well, but we could have done even better if it wasn’t for those constraints.
Mark Costa, CEO, Eastman Chemical, speaking of 2021

The forecast assumes 4.2% US economic growth for 2022. The Conference Board, a business think tank, has a more bearish expectation of 3.5% growth. The investment banks Morgan Stanley and Goldman Sachs expect 4.6% and 3.9% improvement, respectively.

But inflation is hanging over the economy. According to the Bureau of Labor Statistics, the consumer price index has been registering its highest monthly increases in more than 20 years. In its 2022 outlook report, Goldman Sachs calls inflation—which it attributes to surging consumer demand and insufficient labor—"the biggest surprise of 2021."

Economists expect inflation to subside in 2022 but are worried about the consequences if it doesn't. "The biggest risk to the global economy may no longer be a renewed downturn because of fresh virus outbreaks, but may now be higher inflation because of tight goods supplies and excessive wage pressure," the Goldman report says.



US Congress will be gridlocked

by Jyllian Kemsley
Credit: Shutterstock


The US Congress started 2022 largely at a standstill, having passed neither a budget nor President Joe Biden’s Build Back Better climate and social spending plan. Midterm elections in the fall also portend gridlock, which would hamper progress on many issues, including immigration and a new directorate for the National Science Foundation, that are important to chemists. If Congress does pass anything, one likely candidate is cannabis regulation reform, which has bipartisan support.



International research collaborations will face continued scrutiny in the US

by Andrea Widener


National security concerns about US research increased under President Donald J. Trump’s administration. Its anti-China stance led to restrictions on international collaborations and even prosecutions of academic researchers, often for failure to report Chinese funding.


• The US Office of Science and Technology Policy recently released guidance governing research security and the reporting of international collaborations and funding.

• Congress is also debating several research security regulations.

• The future of the Department of Justice’s China Initiative is unclear after the agency recorded one conviction and several losses in 2021.


Proportion of Chinese scientists in the US who feel racially profiled by the government, compared with 8.6% of non-Chinese scientists


Proportion of Chinese scientists in the US who report difficulty getting research funding because of their race, nationality, or country of origin, compared with 14.2% of non-Chinese scientists


Proportion of Chinese scientists in the US who fear or have anxiety about being surveilled by the US government, compared with 11.7% of non-Chinese scientists

Source: University of Arizona and Committee of 100 survey of almost 2,000 scientists at US research universities in 2021.

While the rhetoric has changed somewhat under President Joe Biden, efforts to address research security concerns continue. On Jan. 4, Biden’s Office of Science and Technology Policy (OSTP) released guidelines for how federal funding agencies should seek information from researchers about their international collaborations or non-US funding (see page 15). The US Congress has also been negotiating national security restrictions for academics.

Universities hope that Congress looks at the OSTP’s new guidelines and doesn’t add anything that conflicts with them, which would be “a big challenge,” says Deborah Altenburg, associate vice president for research policy and government affairs at the Association of Public and Land-grant Universities. Faculty are already confused by research security rules and reporting requirements, and the problem could get worse if the OSTP and Congress have contradictory requirements.

The US Department of Justice (DOJ) is also rethinking its China Initiative, a Trump-era effort to root out Chinese espionage throughout the US. Under the initiative, the DOJ has charged a large number of academic researchers—but those charges are for failing to disclose legal collaborations or funding rather than for espionage. Most scientists charged are of Chinese descent, which has left many Asian scientists feeling targeted.

The DOJ so far has had mixed results from its prosecutions. Judges have dismissed some cases, and the DOJ has dropped others. One of those cases involved Anming Hu, an engineering professor at the University of Tennessee, Knoxville. Hu was charged with failure to disclose ties to China. The jury failed to reach a verdict, and the judge threw out the case. More recently, the DOJ won its case against Harvard University chemist Charles Lieber, who was found guilty of making false statements, filing false tax returns, and not declaring a foreign bank account.

At the same time, more academics have been standing up against what they see as unfair treatment of Asian scientists. Over 2,000 academics signed a letter asking the DOJ to end the China Initiative. John Yang, executive director of the advocacy group Asian Americans Advancing Justice–AAJC, says it is encouraging to see so many faculty members speak out. Academics “would be very critical of any grant fraud or abuses of the grant system,” he says. “But they understand that that is very different than national security concerns.”

Several organizations asked the OSTP to ensure that cases are brought only against academics who have shown a clear intent to deceive rather than those who made an oversight or were unclear on the reporting requirements. The new OSTP guidelines require that agencies “not stigmatize or treat unfairly members of the research community.”

The OSTP guidelines aim to clarify reporting requirements and make them uniform across agencies within 120 days. Sarah Spreitzer, director of government relations at the American Council on Education, which represents a range of higher education institutions, says such consistency will make following the rules easier.

As for restrictions being discussed in Congress, universities are particularly concerned about rules that would remove reporting thresholds for non-US funding, forcing everything to be reported. “We’re concerned that it could actually capture perhaps a visiting scholar taking a faculty member out for a cup of coffee,” Spreitzer says.

Overly onerous or restrictive requirements could hurt the US in the long run, Altenburg says. US science has thrived by training scientists from around the world and encouraging them to stay, she says. “If this whole set of policies discourages that in the future, how do we live with those consequences?”



Europe’s chemical makers will face ‘crucial crossroads’ on sustainability

by Alex Scott


The European chemical industry is bracing itself for a tough 2022. The European Union is drafting new legislation for curbing greenhouse gas emissions and producing sustainable chemicals, known collectively as the European Green Deal. The European Chemical Industry Council (Cefic), a trade association, says the new policy will leave the industry facing unbearable costs. The sector is at a “crucial crossroads,” the group states.


• The European Green Deal will significantly challenge the chemical industry.

• Companies want more certainty about timelines and costs.


Number of chemicals that the European Green Deal could affect

$80 billion

Potential annual sales decrease in Europe’s chemical industry

Source: European Chemical Industry Council.

A study by the consulting firm Ricardo Energy & Environment, commissioned by Cefic, shows that up to 12,000 chemical substances could be in the crosshairs of two legislative proposals intended to help implement the Green Deal.

Ricardo concludes that about one-third of the substances would have to be substituted or reformulated, potentially erasing about 12% of the European chemical sector’s annual sales. Cefic suggests that incentives will be needed to create markets for replacement chemicals.

“We have an enormous challenge ahead of us,” Martin Brudermüller, president of Cefic and chairman of BASF, the world’s largest chemical maker, says in Cefic’s statement. Brudermüller’s goal for 2022 is to work with the EU to develop a road map to sustainable chemical production that the industry can afford. The industry wants Europe to create a timeline and a pathway for developing the desired substitutes.

We have an enormous challenge ahead of us.
Martin Brudermüller, chairman, BASF, and president, European Chemical Industry Council

One challenge for the European chemical sector is that many chemicals—and the products they are made into—are traded globally, says Qamreen Parker, a research analyst at the consulting firm Wood Mackenzie Chemicals. Alongside time to adjust to new regulatory standards, the industry will be looking for a level playing field so that all products made in and imported into Europe adhere to similar standards. “Care needs to be taken to avoid driving production to locations that don’t require the same standards,” she says.

The chemical industry does have a heavy environmental footprint, Parker says, but regulators must remember that it also supports sustainability. “We will not be able to electrify the transport fleet or build solar panels to provide it with power without an engaged chemicals sector,” she says.



China’s chemical makers will gain from low-carbon policies

by Hepeng Jia, special to C&EN


Despite nationwide power outages and tightening controls on industry expansion, China’s chemical sector is reaping profits. In 2022, leading firms will seek to align with the country’s low-carbon policies by boosting efforts to upgrade products and decrease energy consumption.


• China’s chemical industry overcame headwinds in 2021 to post strong profit growth.

• Helping China reduce carbon emissions should be a source of profits in 2022.


Profit growth in China’s chemical industry in the first 10 months of 2021


Profit growth in Chinese industry overall in the first 10 months of 2021

Source: National Bureau of Statistics of China.

From about June to September, power companies responded to surging coal prices and the Chinese government’s effort to reduce energy consumption by cutting output. Thousands of chemical makers were forced to suspend or lower production. In October, the central government put a halt to the power outages.

In spite of the upheaval, China’s chemical sector earned $105 billion in profits in the first 10 months of 2021, more than double the profits generated in the same period in 2020, according to the National Bureau of Statistics of China. In contrast, profits across the country’s industrial sector overall rose by a more modest 42%.

In part because of strong export market demand and loosening monetary policy, profitability in China’s chemical sector should remain high going forward, says Ye Yingmin, president of the Beijing-based consulting firm Chem1.

At the same time, policies to control investment in products that require a lot of energy to make—including many basic chemicals—should benefit existing chemical companies by capping new supply. In recent weeks, both the central and provincial governments released regulations that either ban such investment or require that any new investment be in facilities that replace existing production capacity.

Chinese companies focused on energy efficiency in both their products and processes already seem to be making gains. For example, Hengli Group, a private company that emphasizes highly efficient polyester production, had 2020 sales of about $80 billion, putting it at number 3 out of 500 in a sales ranking released on Nov. 30 by the China Petroleum and Chemical Industry Federation. Hengli, which was previously ranked 15 by the trade group, beat state-owned conglomerates like China National Offshore Oil Corporation and ChemChina.

About 100 new firms, many focused on high-end specialties, entered the ranking, mostly replacing basic chemical producers. The rise of these firms is due primarily to their investment in products necessary for low-carbon development, China Chemical Industry News reports. This trend should continue in 2022, Ye says.


Chemical Regulation

US EPA will struggle to meet TSCA deadlines

by Britt E. Erickson
Credit: Shutterstock
The US Environmental Protection Agency is developing rules to mitigate the risks of pigment violet 29 and other chemicals.


The US Environmental Protection Agency faces another year jam-packed with chemical risk assessments and deadlines under the Toxic Substances Control Act (TSCA). Behind schedule and severely understaffed, the EPA’s Office of Chemical Safety and Pollution Prevention is under pressure to evaluate and propose rules to mitigate risks for chemicals already marketed in the US, an effort required by 2016 amendments to TSCA.


• The US Environmental Protection Agency will revise risk assessments and propose rules to mitigate risks for the first 10 chemicals evaluated under the 2016 revisions to the Toxic Substances Control Act.

• The EPA will delay enforcement of a ban on phenol, isopropylated, phosphate (3:1) because of supply chain concerns.

• New leaders in the EPA’s chemical office will address concerns about the integrity of the New Chemicals Program.

The first 10 assessments for high-priority chemicals were 6 months late. The EPA completed them in 2020 under former president Donald J. Trump’s administration. Facing lawsuits over several of those assessments, the chemical office, now under the leadership of Michal Freedhoff, is revising them to consider exposure to chemicals from air, water, and other pathways that the EPA initially disregarded. For 6 of the 10 chemicals, the agency is using ambient air and surface-water data to evaluate risks to communities near industrial facilities.

At the same time, the EPA is developing rules to mitigate the risks it finds for the 10 substances. Likely to be first are rules for current uses of asbestos, a group of cyclic aliphatic bromide flame retardants, and pigment violet 29. The agency must evaluate the risks of former uses of asbestos, such as in construction materials in older buildings, by Dec. 1, 2024, according to a court agreement.

EPA’s ever-growing to-do list under TSCA

Propose rules to mitigate risks of asbestos (current uses), hexabromocyclododecane and other cyclic aliphatic bromide flame retardants, and pigment violet 29.

Evaluate risks to communities that border industrial facilities and revise assessments for 1-bromopropane, carbon tetrachloride, methylene chloride, N-methylpyrrolidone, perchloroethylene, trichloroethylene.

Determine risks to the general population and revise risk assessment for 1,4-dioxane.

Complete risk evaluations for 20 high-priority chemicals identified in December 2019: seven chlorinated solvents, six phthalates, four flame retardants, formaldehyde, a fragrance additive, and 1,3-butadiene.

Complete manufacturer-requested risk evaluations for substances: diisodecyl phthalate, diisononyl phthalate, octahydro-tetramethyl-naphthalenyl-ethanone (class of four fragrance chemicals), and octamethylcyclotetrasiloxane.

Finalize rule to delay enforcement of ban on phenol, isopropylated, phosphate (3:1).

The solvent 1,4-dioxane is likely to be finished last, Freedhoff said during an event in June 2021 commemorating the fifth anniversary of TSCA reform. The EPA is overhauling its 1,4-dioxane assessment to determine whether drinking water and air pose unreasonable risks to the general population. It is also considering occupational exposures to 1,4-dioxane that were previously excluded.

As the EPA struggles to reevaluate those first 10 chemicals, it faces a December 2022 deadline, with the possibility of a 6-month extension, to complete risk assessments for the next 20 high-priority chemicals. Deadlines for manufacturer-requested assessments of four chemicals are also looming.

Additionally, the EPA is revising rules that ban the processing and distribution of five persistent, bioaccumulative, and toxic chemicals that are also already on the market. Those rules were finalized in January 2021, shortly before Trump left office. The agency expects to release new rules in 2023 but in the meantime has put enforcement of one of them on hold. That rule bans phenol, isopropylated, phosphate (3:1), also known as PIP (3:1), which is used as a flame retardant, plasticizer, and additive in electronics, cars, and other consumer products.

In September, the EPA delayed enforcement of the PIP (3:1) ban until at least March 8, 2022, “to ensure that supply chains are not disrupted for key consumer and commercial goods.” Importers, distributors, and retailers of electronics and other consumer products claimed that identifying PIP (3:1) in those articles will take years because of the complexity of the global supply chain. In October, the EPA proposed to delay enforcing the ban until Oct. 31, 2024. It will need to finalize that proposal to make the 2024 date effective.

In 2022, the EPA will also need to address concerns about its New Chemicals Program. The program was the focus of a congressional hearing in late October after a group of EPA scientists filed complaints with Congress and the agency’s inspector general. The whistleblowers claim that program managers downplayed safety concerns to get new chemicals onto the market quickly to please the chemical industry.

Freedhoff told lawmakers at the October hearing that the program staff is undergoing scientific integrity training. She also noted that the office is understaffed: it has less than 50% of the resources needed to approve new chemicals.


Persistent Pollutants

Regulations coming for PFOA and PFOS

by Cheryl Hogue


Although they are no longer intentionally made in the US, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) are high on the Environmental Protection Agency’s agenda for regulation in 2022.


• The US Environmental Protection Agency plans to propose enforceable limits on PFOA and PFOS in drinking water.

• Designating PFOA and PFOS as hazardous substances would trigger the cleanup of these chemicals at hazardous waste sites.

The EPA plans to propose legally enforceable limits for PFOS and PFOA in drinking water. These limits would replace the EPA’s 2016 advisory level of 70 parts per trillion for these chemicals, individually or combined.

PFOA and PFOS are members of the class of per- and polyfluoroalkyl substances (PFAS), several of which taint drinking water nationwide.

The two molecules are probably the best-studied PFAS. Both were ingredients in foams for extinguishing fires involving liquid fuels, and they were used in or generated by some industrial activities. They are linked to cancer, depressed immune responses to vaccines, liver and thyroid problems, and adverse developmental effects in fetuses and breastfed infants.

In addition to setting the drinking-water limit, the EPA plans to propose designating PFOS and PFOA hazardous substances under the federal Superfund law for cleaning up hazardous waste sites. If finalized, the move would require companies and federal facilities to report releases of the chemicals into the environment and make those organizations liable for cleanup.

The agency also intends to set nonenforceable advisory levels for other PFAS found in drinking water.

One is perfluorobutanesulfonic acid (PFBS), a chemical that 3M introduced as a replacement for PFOS as a surfactant and to make water- and stain-resistant coatings. Last year, the agency found that PFBS is less toxic than PFOS.

The other PFAS that the agency is targeting for advisory levels in drinking water are Chemours’s fluoroether GenX and the chemical it transforms to in water, hexafluoropropylene oxide dimer acid (HFPO-DA). A recent EPA assessment determined that GenX and HFPO-DA are more toxic than PFOA, the compound GenX was developed to replace.



Pharmaceutical services to grow for another year

by Rick Mullin
Credit: CordenPharma
CordenPharma is expanding a production facility for high-potency solid drugs in Plankstadt, Germany.


Solid growth and sizable investments will continue in the pharmaceutical services sector as contract manufacturers of active pharmaceutical ingredients (APIs) and drug intermediates move into a third year of navigating the unpredictable impact of the pandemic.


• Tight production capacity has emerged as a red flag, spurring investment.

• Expanding small-molecule production remains key to growth.

“Aside from what you can’t predict, it’s a very good time to be in contract services,” says Wayne Weiner, who heads the consulting firm PharmaTech Solutions. “It doesn’t seem the funding will dry up for biotechs, which are really driving a lot of the innovation.” And biotech innovators without production assets are increasingly bringing drug candidates to market themselves rather than licensing to larger drug companies, thus generating longer-term contracts with service firms, Weiner says.

But James Bruno, president of another consulting firm, Chemical and Pharmaceutical Solutions, sees a red flag. “I think we are going to be short on capacity all year,” he says. “Everybody seems to be booked.”

Managers at service firms agree that capacity constraint is a concern, and they point to continued investment in new capacity in response. Hovione, CordenPharma, and Pharmteco are among the companies with plans to add small-molecule API capacity.

Hovione is expanding on both sides of the Atlantic; the Portuguese firm is 2 years into a 3-year program that is expected to increase overall capacity by 25%. CordenPharma will expand clinical-scale peptide production in Frankfurt, Germany, and solid-dose drug output in Plankstadt, Germany. Pharmteco is expanding API production in South Korea and is adding capacity at a newly acquired cell and gene therapy site in France.

While service providers are likely to continue broadening their offerings beyond small-molecule API production in 2022, services for the emerging cell and gene therapy industry will develop on a parallel track and attract only a handful of the largest traditional firms. Cell and gene therapy is getting a lot of attention, Bruno says, but most of the investment in the drug services sector will continue to be in small-molecule production.



Advances in AI that pair chemistry with biology will hasten adoption in drug discovery

by Rick Mullin
Credit: Exscientia
Exscientia is transitioning from being an artificial intelligence service provider to being an AI-based drug discovery firm.


The pharmaceutical industry marked several breakthroughs in the deployment of artificial intelligence in 2021, positioning AI to make significant advances in drug discovery labs in 2022.


• New machine learning models will support both chemistry and biology.

• Artificial intelligence technology developers will advance as drug discovery companies.

AI software developers and service companies that are pursuing their own drug discovery leaped forward last year. Insilico Medicine, which received $255 million in venture funding, announced that it used AI to identify a novel drug target and develop an investigational small-molecule therapy to treat idiopathic pulmonary fibrosis. The company also hired dozens of pharmaceutical research chemists. Exscientia, an AI technology firm with three clinical-stage drug candidates, received $225 million in venture funding and expanded its drug discovery research staff as well.

AI developers plan to bring candidates to preclinical or clinical stages this year.

Regina Barzilay, a computer science professor at the Massachusetts Institute of Technology and colead of the Machine Learning for Pharmaceutical Discovery and Synthesis Consortium, anticipates solid traction for AI in 2022 based on recent advances in technology. “We see a significant merge between chemistry and biology,” Barzilay says. Scientists are developing AI engines that can work with both the structure and the bioactivity of drug targets—functions that heretofore have been performed separately—enabling researchers to learn from smaller data sets, she says.

The question is no longer whether we will use AI. It will be where we are going to use it next.
Hugo Ceulemans, scientific director for discovery data sciences, Janssen Research & Development

Hugo Ceulemans, scientific director for discovery data sciences at Janssen Research & Development, points to two breakthroughs in AI for drug discovery at DeepMind, a sister company of Google, that pave the way for progress in 2022. They are the introduction of AlphaFold 2, which uses AI to generate high-quality, 3D protein structures, and the development, announced last month, of a machine-learning model that suggests a molecule’s characteristics by predicting the distribution of its electrons.

Ceulemans, a project leader at the Machine Learning Ledger Orchestration for Drug Discovery, a pharmaceutical industry consortium working on data management for AI, says large drug companies are headed into 2022 committed to developing AI engines in the lab. “The question is no longer whether we will use AI,” Ceulemans says. “It will be where we are going to use it next.”



Shortages and price spikes will reshape agricultural chemical use

by Matt Blois


Growers worldwide are facing huge cost increases for fertilizers, and farmers in the US are having trouble securing supplies of critical herbicides. Those factors could reshape the way farmers use agricultural chemicals in 2022.


• Shortages of glyphosate and glufosinate are pushing some farmers to till fields before planting or switch to other herbicides.

• High costs are forcing farmers to evaluate whether it makes sense to apply less fertilizer this year.


Projected increase in fertilizer costs for Illinois corn farmers on highly productive land in 2022 from 2021


Projected increase in pesticide costs for Illinois corn farmers on highly productive land in 2022 from 2021

Source: Farmdoc Daily, Dec. 7, 2021.

Mark Welch, an agricultural economist at Texas A&M University, says high costs may push some farmers to reduce fertilizer use next year depending on the situation. He says crop prices are high enough that it still makes economic sense for Texas corn farmers on highly productive land to use expensive fertilizers to increase yield. The high fertilizer costs are harder to justify on less-productive land.

The cost of herbicides has also risen. But Mark Loux, a weed scientist at the Ohio State University, says farmers must control weeds or risk a big impact on their crop. They have more wiggle room when it comes to reducing the amount of fertilizer they use.

“You may or may not lose yield, depending on what your soil contributes,” he says. “But if you drop below a certain level of weed control, it’s going to be pretty evident.”

Rodrigo Werle, an agricultural extension agent at the University of Wisconsin–Madison, says shortages of the broad-spectrum herbicides glyphosate and glufosinate in the US will force farmers to get innovative. Some may till their fields before planting to destroy weeds mechanically, which could reduce the amount of herbicide they need to apply.

Farmers could also turn to other chemicals. Werle is telling growers to apply easier-to-find herbicides before they plant, preventing weeds from sprouting in the spring. He says farmers will need to determine which weeds grow in their fields so they can select the right combination of herbicides, much as they would have done before genetically modified crops made weed control simple.

“Twenty to 25 years ago, we were doing this every year,” Werle says. “We just kind of walked away from it.”


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