Summary

Analyse af danske styrkepositioner inden for teknologier, der kan føre til substitution af kemikalier

In its Action Plan for promotion of eco-efficient technology from 2007, the Danish government has phrased a number of focal points for future efforts. One of the focal points is that more focus needs to be put on companies and entrepreneurs and the efforts should be founded in the Danish strongholds - i.e. areas where Danish companies have demonstrated that they possess the preconditions to be among the best in the world.

The objectives of this report are:

to identify and describe existing and potential future Danish strongholds within technologies that may lead to substitution of problematic chemicals, and
disclose barriers for use of the strongholds and propose initiatives for promoting the business development in this area.

Today more that 30,000 chemical substances are marketed in the EU in quantities above 1 tonne. In addition, more than 100,000 chemical preparations are produced and used. A number of the chemicals we use today have undesired effects on the environment and several of the substances may increase the risk of e. g. cancer, reduced fertility and allergy. There is thus a far-reaching environmental and health perspective in the development of eco-efficient products and technologies in order to reduce the use of the problematic substances as much as possible. It is estimated that the future global market for this area is highly significant and that there are still important challenges in developing environmentally sound alternative solutions to reduce use of the problematic substances.

Danish enterprises are in a number of areas far advanced in the development of alternatives to problematic substances, and globally there is a significant potential for environmental improvements if these alternatives are propagated through export of environmentally improved products and techniques.

This study is a follow up and an extension of a study undertaken by the Ministry of Economic and Business Affairs’ unit of business economic research and analysis (FORA) from 2006 which identified a Danish chemicals cluster of 54 companies. The identified cluster consisted of companies in the traditional chemical sector and companies working with industrial biotechnology.

The traditional chemical sector includes companies manufacturing chemical products. The sector includes partly companies producing basic raw materials (industrial chemicals, solvents, plastic monomers and compounds, active substances for plant protection products, etc.), partly companies producing chemical preparations such as paint/cellulose paint, joint filler, plastic products, rubber products, detergents and perfume and toiletries. Production and development of basis raw materials primarily takes place at a small number of large international chemical groups, none of them based in Denmark. Generally, Danish companies do not have a significant position in this part of the traditional chemical sector.

If you define a cluster of companies as a number of internally connected companies you may ask to which extent companies producing chemical substances in Denmark actually can be considered as a business cluster. Many of the companies import raw materials from abroad and the manufactured products are sold to areas outside the chemical sector and there is only a limited connection with other companies in the sector. Compared with what in the FORA analysis is called "the water cluster" or "the wind cluster", the chemical cluster seems to have less interconnection.

Apart from the above areas, chemicals are used for production of a long series of articles by companies that are not part of the chemical cluster. For example sectors like electronics, iron and metal, cooling and heating and ceramics and enamel.

Screening survey
In this survey, a pre-screening and assessment has been made of 12 selected sectors with a considerable turnover of chemicals in Denmark. The objective of the screening assessment was to give an overview of which substitution measures had been taken for problematic substances within the past years and identify the sectors where the Danish strongholds are and could be relevant to assess more detailed in the next phase of the project. The assessment covered the following sectors: Paint and lacquer (including wood preservative and ship bottom paint); electronics; iron and metal (including galvanisation, surface treatment and metal casting); glass, ceramics and enamel; graphic sector; cooling and heating; glue and joint filler; leather tanning; mineral wool; plastic and rubber; soap, perfume and toiletries and the textile industry. Apart from the 12 sectors, 3 niche areas were included: lead-free roof weathering surface, batteries and soundproof windows.

For each sector it was examined which kind of substitutions had been made, including substance substitution, new production processes and new technologies. The survey focused on substitution of substances being part of the National list of undesired substances from the Danish Environmental Protection Agency (DEPA).

At the screening survey, a number of areas were identified where Danish companies have been in front with the development re phase out of problematic substances. Danish companies have thus been in front with phase out of e.g. alkylphenol ethoxylates, lead (in pigments, stabilizers, flashing and fishing tools), certain brominated flame retardants, chlorinated paraffins, trichloro ethylene, phthalates, fluorinated greenhouse gasses, styrene, isocyanate, chrome tanning and linear alkyl benzensulphonate (LAS). In many sectors a number of eco-efficient solutions have been developed with the purpose of reducing the releases of problematic substances and improve the working environment, but these substitutions are not assessed to be linked to areas with important Danish strongholds or where a large market potential could be expected.

Lead-free fishing tools and lead-free crystal glass have been developed in Denmark, but because of missing international regulation in these areas, the present international market has been considered to be limited for such products. These product areas have thus not been studied more closely. It should however be noted that with possible international measures this might change.

Several of the identified Danish strongholds are not within the traditional chemical sector. This is due to the fact that Danish companies do not have a significant position in the traditional chemical sector where development primarily is taking place at a limited umber of large international chemical groups. Several of these areas are related to the energy sector where Denmark is strong and it is worth noticing that increased global attention on the climate challenge also may have a positive effect in relation to out-phasing dangerous substances, as for example fuel cells as an alternative to lead in batteries illustrate.

This survey does not cover alternative farming methods or biotechnologies that may limit the use of agricultural pesticides. This limitation has only been made to reduce the scope of the survey. It has thus not been examined whether Denmark has important strongholds in this area.

Selected product areas
The following product areas were assessed to represent the most important strongholds and selected for a closer examination by interviewing central stakeholders:

Enzymes and microbial cultures that may replace or reduce the use of chemicals in the production processes or be part of the final products;
Fuel cells as alternatives to lead in batteries (selected among several product groups where nanotechnology is used);
Alternative refrigerants for cooling and heating;
Alternatives for ship bottom paint containing biocide;
Alternatives for phthalates and lead in PVC.

Enzymes and microbial cultures (biotechnology)
Industrial biotechnology is obviously a Danish stronghold where three large Danish companies represent approx. 80% of the world market for enzymes. It has been estimated that in 2020 10% of the European chemical production will be based on enzyme technology. The development especially focuses on production of chemicals based on biological raw materials which has a broad perspective related to climate and resource problems, but not necessarily focuses on and will lead to substitution of problematic chemicals. Examples of uses that more specific may lead to reduced use of problematic chemicals are use of enzymes in washing powder and fluids (reduces use of phosphates and LAS) and use of enzymes as substitution for disinfectants and other biocides.

Fuel cells as alternatives for lead in batteries (nanotechnology)
Many experts consider nanotechnology and nanomaterials to be the basis for the next industrial revolution and many areas have been pointed out where nanotechnology can contribute to environmental improvements. Special knowledge has been developed in research networks and in companies related to use of nanotechnology in energy production, catalysts for air cleaning and energy effective production of chemicals, sensors and certain types of textiles. As substitution of problematic chemicals, use of fuel cells as an alternative for accumulators is considered to have a considerable potential to reduce use of lead and other problematic heavy metals. At the same time it is an area where Danish companies are strong and there is a synergy with the energy area and the development of catalysts - both areas where Danish companies are up front. Furthermore there are perspectives in relation to use of nanotechnology in ship bottom paint. This is described in the section "Alternatives to ship bottom paint containing biocides".

Alternative refrigerants for cooling and heating
A number of ozone depleting substances, CFCs and HCFCs, have traditionally been used for cooling and heating. Some of the substitutes, HFCs, have turned out to be heavy greenhouse gases and there is thus an important perspective in avoiding these substances. Danish companies are far ahead with the development of HFC-free cooling (with CO₂, hydro carbons or ammonia) and there are important Danish actors on the market; both in development of finished products and of components. Danish eco-technologies are also in front by being much more energy effective and this may be an important factor for the demand for Danish products and know-ledge at a potentially large market in USA, Europe and Asia.

Alternatives for ship bottom paint containing biocides
Antifouling ship bottom paint traditionally contained biocides causing considerable undesired effects in the aquatic environment. As a result of restrictive Danish legislation, the development of alternatives for the traditional biocide-containing bottom paints has had high priority in Denmark, including development of more environmentally friendly anti-fouling ship bottom paint for leisure boats and large vessels. One large company is an important player on the world market for ship bottom paint and produces biocide-free bottom paint for certain types of large ships. For small ships and leisure boats there have not yet been found satisfactory alternatives, but it remains a focus area and an area where new technologies, for example use of enzymes is considered; an area where Denmark has a stronghold.

Alternatives to phthalates and lead in PVC
PVC is among the most used plastics, but the use of certain types of softeners and lead compounds as stabilisers in plastic have caused some concern. Because of a restrictive Danish legislation, Danish companies have been among the leaders in the phase out of certain phthalates and lead compounds and particularly on the market for medical plastic products, wires/cables and alternative softeners there are important Danish market actors with more environmentally friendly products.

Knowledge level in Denmark
In all the mentioned areas the Danish knowledge level and the Danish products are up front when it comes to environmental solutions and Danish companies operates on the world market having business competencies and strengths at an international level.

Legislation and development of technology
In a previous FORA study the companies were asked which of 8 business framework conditions are important for the companies' development of environmentally friendly solutions or technologies. The companies pointed at governmental regulation as the most important parameter for the development of environmentally sound technologies which also was confirmed in the present study.

In relation to substitution of problematic chemicals it is significant that in a number of areas where strongholds have been identified, the regulation in Denmark has been more restrictive than the general regulation in the EU. For example regulation regarding ozone layer depleting substances and greenhouse gasses (HCFC and HFC), plastic additives (phthalates and lead) and antifouling ship bottom paint (a ban against certain active substances). Apart from the specific regulative effect, the Danish effort compared to phase out of problematic substances contributed to the fact that many Danish enterprises generally have seen substitution of hazardous substances as an important part of their contribution to solve local and global environmental problems.

With a number of wide reaching instruments at EU level related to the chemical area, e.g. in form of the REACH regulation, the Biocide directive, the RoHS directive (dangerous substances in electronics) and the ELV directive (dangerous substances in vehicles) the regulative pressure in relation to phase out of problematic substances will primarily be at EU level in the future. EU also plays an important role related to development of global agreements and action plans in the chemical area where EU regulations often are the basis for global agreements. With the REACH regulation and the Biocide directive, rules have been made to ensure that new problematic substances are not marketed, but the rules also implies heavy requirements to documentation which some enterprises see as a set back for development of new environmentally friendly products. This could be a barrier for small innovative companies. On a short term basis, the Biocide directive and the REACH regulation may be an advantage for Danish companies marketing products being more environmentally friendly than the competitors' and as a consequence of the political focus on substitution of problematic substances, Danish companies have generally been ready to look for alternatives and will be well equipped for additional regulative measures at EU level. On a long term basis, an extra effort must be done to maintain this position. In that connection it is our assessment that public demand for environmentally friendly products will contribute positively to the development.

In relation to EU regulation and global agreements, the following measures have been assessed to be able to promote and develop Danish strongholds:

Work at EU level and globally for phase out of problematic chemical substances; e.g. work related to the Biocide directive in order to make more rigorous requirements to anti-fouling bottom paints and in relation to REACH to work for adding problematic substances on the list of substances requiring an authorisation. As Danish companies are generally far ahead in the phase out of problematic chemicals, international regulation could promote Danish strongholds further.
Work at EU level to prevent that imported articles contain chemical substances which are not allowed to be used in the EU (e.g. to ensure that imported articles do not contain biocides use of which is banned in the EU).
In relation to specific products, which documented can replace problematic chemicals, it is suggested to have the continued possibilities for financial support of development, testing and technical documentation of alternative solutions like the possibilities included in the Enterprise Scheme of the Danish Environmental Protection Agency.
Specifically related to alternative refrigerants for cooling and heating, initiatives for maintenance and promotion of this stronghold could be:
- Development of a manageable energy label in the EU for commercial plug-in systems.
- Development of global energy labels for cooling units.

This latter measure will not in itself promote the substitution of problematic chemicals, but will have a positive environmental effect and at the same time strengthen the position of Danish companies as the Danish systems are among the most energy efficient. Indirectly, this could increase sales of systems with HFC-free cooling.

Apart from the work in international for a, the authors assess that there may also be a need for maintaining an independent Danish effort, for example through guidelines for green public procurement. As to alternatives to phthalates and lead in PVC, it is our assessment that a renewed Danish effort to phase out phthalates in e.g. the health sector can be used positively in marketing on export markets where, generally, there is not so much focus on the environmentally better - but also more expensive - alternatives.

Knowledge and cooperation
In the previous FORA study the companies considered cooperation between industry and public research to be of utmost importance to the industrial development of environmental solutions or eco-efficient technologies. In the examined areas in this study there is a considerable exchange between companies and public research, but the companies point out several barriers for the cooperation. One of them is the companies' co-financing of PhD project related to the enterprises. Very few of the questioned companies have the resources to participate and often they would prefer to participate with apparatus and resources rather than financially. Another barrier is that companies must pay the universities in connection with cooperation projects. Competitive conditions may also be an important barrier for cooperation between companies when developing new knowledge.

Along with internationalisation of companies comes internationalisation of the research and development and several companies mention that they cooperate on research and development with international partners. One company says that it can be a barrier to identify relevant foreign partners.

As to cooperation and exchange of knowledge, the area for cooling and heating is an excellent example of development of strongholds. Apart from a number of cooperation projects between companies and research institutions a cluster facilitator (KVCA) has been established with the objective of increasing innovation and knowledge sharing between both research institutions and companies. Similar efforts in view of supporting additional creation of networks could be relevant in several other areas.

Several companies mention the need for continued basic research to ensure a high knowledge level in Denmark. In order to strengthen the mentioned strongholds it is a basic condition that a high knowledge level is maintained and highly qualified candidates are educated through basic research, especially within biotechnology, nanotechnology, energy optimisation, and new energy systems.

More specifically the authors suggest that following measures are considered:

Improvement of possibilities for industrial PhD projects through increased public funding and better opportunities for PhDs to be shared between several small companies;
Continued support to companies and research institutions for:
- development of alternatives to bottom paint - for both leisure boats and large slow going ships;
- development of new refrigerants and optimisation of cooling systems;
- development of environmentally friendly plastics.
Encourage a cooperation (or partnership) between industry (e.g. Coloplast, Unomedical, Danisco og Melitek), the authorities (including the Danish Environmental Protection Agency and the Danish Medicines Agency) and the hospitals on development of phthalate-free products for the medico sector. Apart from economic support to testing and demonstration of technological solutions, the involved public authorities may contribute with their expertise, network and facilitating services. The cooperation may be developed later to include several applications of softened PVC.
Extension of the existing partnership for biofuels also to cover biopolymers as there are many related problems and several of the actors are the same.
The development of fuel cells is here seen from a narrow point of view in relation to the chemical aspect, but the development of fuel cells has, as known, a much larger perspective in relation to the energy sector. A partnership has thus already been established for hydrogen and fuel cells. If Denmark chooses to focus more on fuel cells by establishing "hydrogen based" infrastructures this will also have a large effect on the development of alternatives to lead batteries.

Establishment of a knowledge centre in relation to the plastic area as a counterpart to the Knowledge Centre for HFC-free cooling may be considered and discussed closer with relevant parties, but in relation to improve strongholds, the centre will probably not have a central significance.

A focus point, mentioned by several actors, is the need for support of or venture capital for development activities and cooperation on introduction of new technology, e.g. as part of a partnership between companies, their clients and research institutes. Initiatives to be mentioned are:

More focus on allocating funds to carry out analysis that may give the companies an indication of future development and regulation. This will reduce the uncertainty among the companies in view of scope and type of innovative investments.
Continued allocation of public funds to support testing and demonstration projects in the companies. This seems to be possible without bumping into barriers such as regulation of government subsidies. It could be considered to establish an investment fund or a program similar to EUDP (Development and Demonstration programme of energy technology).
Continued allocation of public funds to support and facilitate applications for EU funding of large, costly development projects.