Environmental Pollution Control Again in Light in Chemical Industry

Chemours Defends Phasing Out of HFCs

Background: Chemours and Honeywell have jointly petitioned against the appeal court decision to abandon the hydrofluorocarbons (HFCs) phasing-out program. The court said the HFCs are not ozone-depleting substances. The environmental protection agency (EPA) sought to phase out these, because these are powerful greenhouse gases.

Impact: Both companies, Chemours and Honeywell, make hydrofluoroolefins (HFOs) which are alternative to HFCs as replacement option. Appeal court order against the HFCs phasing out may result in relatively lower demand for HFCs options such as HFOs. This may impact the revenues and profitability of these two companies. However, if their petition is successful, these two companies would gain easily recognizable brand in forefront of HFCs replacement options market. The key consumer segments which are expected to witness impact of this market India,

China’s Anti-Pollution Campaign

Background: China has reinforced their interest in environmental protection and air pollution control campaigns. The ministry published stringent and ambitious targets for air, water and soil pollution control. On same track, the oxides of nitrogen and sulfur have been targeted to be reduced by more than 15% as compared to 2015 level. These targets are expected to further push the strict measures already underway in China, shaping chemicals and materials exports attractiveness of country.

Impact: The hard measures taken by Chinese government to improve the air quality and minimizing pollution have already resulted in many plant closures or increase in production cost (largely due to additional cost of waste-management & technological changes). Overcapacity of industries (such as steel and cement) is being eliminated, which is expected to limit the long-term growth potential of market.

Overall environment concerns have varying impact on chemicals industry. While these are increasing cost of production on one hand (because of waste management expenditure), it is also providing opportunities for new product companies which are providing alternate options for traditional polluting chemicals. The chemical industry has always thrived in changing market dynamics, adapting to changes and requirements. The new wave of chemical industry change is expected to further elongate its existence via changing the impact on environment.

-Ankur Kalra,
Infoholic Research