The cost-performance-sustainability triangle needs to be considered

In which countries do you see the largest trend towards bio-based raw materials for coatings applications?

Frank Hezel: Sustainable development has basically arrived on the agenda of the coatings value chain. As regards bio-based raw materials, the main driver is company-specific ambition: demand is being increasingly pushed by brand owners – in particular those from the furniture and flooring industry based mostly in Western Europe and the Nordic countries. These players are establishing ambitious sustainability objectives for the near future by upgrading their sustainability policies and setting goals ranging from a steady decrease in CO₂ emissions to a complete portfolio switch to renewable-based products.

These brand owners are asking for more sustainable solutions in their respective supply and value chains. For businesses with a distinct sales orientation, such as professional coatings for craftsmen, this development is very much driven by formulators distinguishing themselves in the market through the addition of more sustainable solutions to their sales channels. The final product is then specifically marketed as bio-based or renewable and accompanied by the respective certificates or labels.

In which application areas do you expect bio-based coatings to develop fastest or slowest?

Frank Hezel: The industrial wood market, together with the packaging market, is expected to be one of the growth areas for bio-based coatings. We also see big potential in the decorative coatings professional/DIY area, where several products are already commercialized today. Other industries may well also turn to bio-based coatings in the coming years as a result of overarching sustainability topics in, say, the automotive sector, for example electric vehicles. Here, customers can benefit from our bio-based resins, for example special UV resins and bio-based polyols as well as from other building blocks from our sustainability toolbox.

Frank Hezel is Vice President Resins & Additives EMEA at BASF.

Do you expect the low oil price to affect the shift towards bio-based coatings?

Frank Hezel: When it comes to buying decisions, the cost-performance-sustainability triangle needs to be considered. While in terms of performance renewable building blocks can mostly be directly compared to their fossil-based counterparts, price development depends on factors other than crude oil. For renewable raw materials, the volatility of feedstock prices is influenced by very different aspects, harvest yield, for example, playing a vital role. Hence raw material cost developments for bio-based materials are completely different from those pertaining to fossil coatings and they follow different drivers. A very low oil price will definitely not promote a faster push towards bio-based coatings, but their development will also not be stopped as it is in many cases strategically rather than purely cost driven. For instance, in professional-craftsmen markets, where the end consumer ultimately decides what to buy, the volatility in raw material prices affects final product pricing to a lesser extent anyhow.

Do you expect the Corona pandemic to affect the shift towards bio-based coatings?

Frank Hezel: Right now, we are all in a highly challenging situation ‒ perhaps the most challenging of the past few decades, which makes it hard to derive outlooks for the future. On the one hand, the Corona pandemic is resulting in significant delays to the execution of projects – due to a lack of resources and to temporary shutdowns. On the other hand, a severe crisis such as this will fuel strategic discussions in the value chain and the next big bets. Governments are evaluating ways of stimulating their countries’ economies through specific programs, some of them targeted towards pushing sustainable solutions. This may well be a big opportunity for the value chain to tackle this challenge.

The availability of bio-based raw materials is an issue often mentioned by players in the market. How do you see the situation?

Frank Hezel: Development and optimization of the fossil-based value chain has been going on for more than 100 years. This means that processes as well as supply chains have been set up, quality consistency is well understood, and there is an abundance of available building blocks on a large, i.e., economic, scale, all of which benefits the value chain. For coatings, the toolbox we can build from bio-based raw materials is rather limited compared to the established standards.

With specific bio-based building blocks, the options depend closely on the raw material that is selected. For instance, ethanol and glycerine are well-known building blocks that can be derived from both fossil- and bio-based sources. Today, they mostly come from bio-based feedstock in well-established supply chains. However, the extent to which bio-based building blocks can be used as raw materials for coatings is limited due to performance requirements. Key building blocks for the coatings industry today are still based completely on crude oil because of lacking availability or commercial relevance of bio-based alternatives. This results in a rather low maximum bio-content of resins for coatings unless crucial properties are sacrificed. Therefore, the other essential component of our sustainability toolbox is the Biomass Balance approach, which enables us to substitute 100% of the crude oil needed to manufacture the respective product.

Biogas and bionaphtha are used as feedstock in the steam cracker right at the beginning of the chemical value chain and produce the same downstream chemicals with identical properties using our existing BASF Verbund. The sustainability benefits are reasonable crude oil savings as well as a significant, quantifiable reduction of CO₂ footprint. Let us imagine, for example, a typical high-quality kitchen covering an area of about 10 m². A complete coating requires about 14 kg of UV resin. With UV resins manufactured according to the Biomass Balance Concept, about 12 kg of crude oil will be saved and CO₂ emission reduced by about 20 kg for that kitchen as compared to a coating completely derived from fossil sources. Ultimately, however, the best solution depends on the objectives and requirements of the customer. That is why our sustainability toolbox comprises the full product range from bio-based resins to biomass-balanced products.

Most importantly, the material must never come from sources that could be used for human or animal nutrition. “Bio-based” is not always equivalent to “sustainable”. This becomes very clear if we look at the damage that palm oil plantations cause the rain forest. BASF is strongly committed to sustainable raw material and feedstock sourcing in the coatings industry as well as in all the other sectors it serves. Our objective is to continually improve sustainability performance in our supply chain and we have set ourselves ambitious targets for this: By 2025, we aim to have conducted sustainability evaluations for 90% of the BASF Group’s relevant spend. We will work towards having 80% of suppliers improve their sustainability performance upon re-evaluation.

Where do you see the larger potential of drop-in solutions that produce the same molecules as those we now use as bio-based copies or in the development of entirely new materials?

Frank Hezel: Developing completely new bio-based raw materials involves two challenges. The first is the CO2 footprint: Can this new building block be produced with existing assets or is an upfront investment necessary to build a factory for a CO₂-reduced material? The second is to match current performance requirements: Who wants kitchen fronts that yellow over time or are permanently stained with red wine due to poor resistance properties? Here, R&D costs as well as risks need to be evaluated across the whole value chain, i.e., from raw material, resins & additives production, through formulation and conversion right to the brand owner.
Replacing some molecules, however, offers the incentive to achieve the same final product, thereby saving costs in qualification and R&D. In other words, one product is changed, and the rest of the value chain left unchanged. Nevertheless, there is most of the time competition with highly efficient, world-scale production processes that have been optimized over decades. Dedicated, measurable C14 content leaves the challenge of separate supply chains despite the fact that the product is the same.
The Biomass Balance approach of BASF is a smart way to overcome this, since we use our existing assets while guaranteeing our customers the aforementioned crude-oil and CO₂ savings ‒ as approved by an external authority. While materials and quality remain the same, our customers can switch to biomass-balance products immediately, without the need for requalification. This is beneficial for the professional flooring business, for example – a single parquet coating for a standard 30 m² living room would save about 5.5 kg crude oil and about 6.5 kg CO₂ as compared to one based on purely fossil products.

Do you think help from government programs is adequate to promote bio-based technologies?

Frank Hezel: When it comes to subsidizing special industries, we need to widen the scope from a purely bio-based discussion to one on sustainability in general. Looking at the coatings market and how it developed over the last century, we see that the industry has switched from bio-based shellac to high-performance coatings. Bio-based technologies are just one of the essential elements of sustainability. Other crucial factors, such as process efficiency, total cost of ownership, and total CO₂ footprint, need to be considered as well. Switching current technologies to more sustainable ones, for instance converting from solvent-borne to UV, waterborne and high-solids coatings, already offers a variety of those benefits even without the additional ones of bio-based materials. There is still plenty of room for further development of these sustainable technologies. Conversion is usually driven by investments and one of the reasons why they have not grown further is the fact that the old lines are running well. Government incentives could be one way of stimulating and accelerating sustainable growth.

The interview was conducted by Jan Gesthuizen

Event tip

In October European Coatings will host its third international conference on bio-based coatings in Berlin, Germany. The event will give you the opportunity to get the newest information’s on bio-based coatings as well as get connected to leading experts on this field. Of course, the event will follow all necessary precautions to ensure attendees a secure experience.