The Signal: News and Notes from the Pharos Team

Finding Market Transformation in an Unexpected Place

Jim Vallette April 20th, 2012

DENVER -- Polycarbonate made without bisphenol-A.   Eliminating formaldehyde-based binders in laminates and particleboard.  Producing chemical building blocks, like ethylene and butanol, from agriculture, not petrochemicals.  Transparency in material content disclosure. 

These ideas would be expected in a green chemistry symposium. But these were workshop topics at this week’s spring convention of the Adhesive and Sealant Council (ASC).  Ideas about how to achieve sustainable production through reformulations dominated the discussions.

The meeting of big-time raw material suppliers and formulators left me feeling that we have reached an inflection point.   Environmental and human health considerations have shifted from the realms of theory and advocacy into innovative application.

This transformation in manufacturers’ approach is tied to market opportunity. The new marketplace is driven by consumer demands for transparency and avoidance of chemicals of concern.  Recent government actions against specific ingredients reinforce these demands and pressures for change.

The change feels sudden and real.  I didn’t see this coming.

Just last summer, I attended the first-ever “Sustainability Summit” held by this same organization, which left me with a rather different impression.  ASC members’ approach to sustainability seemed to center around marketing: the performance of adhesives and sealants is vital to the function and service life of buildings and other end uses.  So, in terms of service life, the marketplace should realize that their products contribute to sustainability, however they are composed.

But now, it seems, the industry realizes that performance alone will not cut it for many of today’s key consumers.  Companies are feeling the pressure to disclose all ingredients and identify chemicals of concern.  Specifiers want to know what is in their products.  

Consumer pressures

“It’s going to be harder and harder to not be transparent and open about what’s going on,” warned Dr. Bob Peoples, a keynote luncheon speaker.  “I can take a product to a lab and tell what’s in it down to the parts per million. The idea of formulations being trade secrets is becoming harder and harder to defend.”

Dr. Peoples’ incisive presentation did not end there. He reiterated that the market place is inexorably moving “toward bio-based, safer chemicals,” including building blocks like ethylene, propylene, and succinic acid. Converting succinic acid alone would tap into a $1.3 billion per year market.  Dr. Peoples is Director of the ACS Green Chemistry Institute®.

This kind of potential income prevented any sign of indigestion from the lunch-goers listening to Dr. Peoples’ frank talk on green chemistry. “If companies can see a competitive advantage, that’s a powerful force for marketplace change,” he said.  You might say the audience was glued to their seats.

Economic pressures

In the context of a shaky global economy, anything new seems welcome.  A workshop titled “Lead, Follow or Get Out of the Way” painted a grim picture for companies that do not innovate. “Consolidation is going to happen,” said financial advisor Thomas Blaige.  “You have 400 peers, but 40% of the top 50 have been sold and merged. This is driven by globalization.” 

The market share of the top three companies is over one-third and growing. Another 400 players represent the balance of the industry. He drew parallels to what happened already in the glass and metal food and beverage can industries.  Where there had been 58 players, there are now 7, which control 80 to 90 percent of the market.

Smaller companies that create innovative formulations that perform would do well in this economy. Those that don’t will perish.

Government pressures

Government actions are adding to the heat for change.   A representative from the California Department of Toxic Substances Control (DTSC), for example, explained how the state’s Green Chemistry Initiative for Safer Consumer Products is targeting products with chemicals of concern.  The DTSC is the process of identifying products that have over 0.1% of these chemicals by weight.  The agency will then require priority products to either be reformulated or removed from the marketplace.  These products may be identified as soon as the summer of 2013, with actions required after 2015.

At the same time, the US Environmental Protection Agency seems poised to restrict the use of key polyisocyanate compounds used in many adhesive formulations. 

Last year, the EPA added methylene diphenyl isocyanate (MDI) and toluene diisocyanate (TDI) compounds to its list of Chemicals of Concern.  EPA says isocyanate exposure is the leading cause of work-related asthma. As our policy director, Tom Lent, reported, “The EPA expressed particular concern for hazards from the growing use of MDI and TDI compounds in spray foams, adhesives and coatings. The polyurethane compounds made from MDI and TDI are considered relatively inert and benign. But mixing up and site-applying these products in the building instead of in a controlled factory setting can lead to major exposures to the raw uncured and hazardous diisocyanates for workers during installation and for building occupants for anywhere from days to months afterwards.”

The EPA’s action plan on MDI and TDI (and possible new action plan on hexamethylene diisocyanates (HDI)) were the subject of back-to-back workshops at the adhesives conference.

EPA is preparing a data call-in for reports on exposures to uncured MDI and TDI. Companies will be required to submit any reports of such exposures within 90 days.   Data and further studies could lead to voluntary phase-outs or new rules on consumer uses of products containing uncured isocyanates, especially TDI.  This would probably target products with “de minimus values” of uncured TDI.  The industry seems to define “de minimus” as being 0.1% of the product or more, by weight.  That could capture a lot of building material.

The agency’s action plan is “top of mind at the Adhesive and Sealant Council,” said one ASC official. In addition to the US government, the council is dealing with similar initiatives from Health Canada and the European Chemical Health Agency, which is reexamining the MDI/TDI issue.

EPA is focusing on cure time and exposure.  The ASC officials said that industry has a chance, for now, to be “proactive” in creating a test protocol for field exposure studies.   Matt Croson, president of the council, said they will “defend our right to use this product that we feel is safe. We will keep the market open, and not be shut off by bad science.”   He also cautioned against complacency. “This isn’t going to go away,” he said.

Keeping up the heat for change

This dire warning immediately preceded my presentation to the workshop. It was a bit of a non sequitur, but yes, the Adhesive and Sealant Council graciously invited me -- and by extension, you, the Pharos user – to present our material evaluation system, the Pharos Project, to the conference. 

This was yet another sign that the marketplace is changing before our eyes, because of your efforts.  Pharos users are identifying those products that are market leaders, and those that only get in the way of sustainability.   Your discernment, and support for the Pharos project, creates the opportunity for market transformation, and that’s not going away.

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