Good chemistry

Green transition 10 November 2017

Chemical leasing is good for business and the environment.

Expert columns
8 min

An integral part of modern life, chemicals are used in a wide variety of products. However, the traditional model for selling chemicals is based on a conflict of interests. Suppliers sell them in bulk, aiming to sell as much as possible because, as every salesman knows, the more you sell, the more you earn.

On the other side, the buyers of the chemicals want to use as little as possible. Not only does this model reward the inefficient use of chemicals, it can also cause environmental hazards and compromise human safety.

Chemical leasing turns this model upside down. Instead of selling chemicals by volume (such as litres or tonnes), suppliers provide a value-added service to users, who then pay only for the service rendered – for example, the number of parts painted or the amount of water treated. In this way, both parties have a commercial and economic interest to do the job using the fewest chemicals possible.

This is a win-win situation. It increases the efficient use of chemicals because both supplier and user collaborate to lower the amounts for both. It also improves the economic and environmental performance of companies, and reduces human health risks brought about by the use of chemicals.

A unique opportunity

The United Nations Industrial Development Organization (UNIDO), together with the Austrian government, introduced the chemical leasing concept in 2005, and late last year Ramboll was present at the signing of an international joint declaration on chemical leasing.

Ramboll’s unique offering provides a wide range of managerial and consultancy services for companies wishing to use the leasing concept. For instance, we ensure that they meet all the appropriate sustainability criteria for chemical leasing and subsequently provide the relevant certification; this certification is similar to the ISO standards such as the 14,000 family that measures environmental responsibility.

We also use our broad consulting experience to advise clients and support them with market studies, contracts, environmental assessments and so on. For example, we have recently advised Safechem, a German subsidiary of Dow, on the implementation of its leasing model, which helps clients with cost transparency and economic value.

By utilising this approach, Ramboll is helping transform an outdated business model, marking a paradigm shift from the selling of chemical goods to the delivery of chemical services that will ultimately lead to more efficient use of chemicals. If we are to ensure a sustainable future, then sustainable chemical management is vital. Chemical leasing is the answer.

Substantial benefits

According to a UNIDO study, chemical leasing can provide companies with substantial economic and environmental benefits. In the industrial cleaning sector, for example, companies that consume more than 2.6 million tonnes of chemicals per year could save up to 1.2 million tonnes of solvents and cleaning agents.

The study also suggests that some companies could potentially see a reduction of waste and emissions by more than 100,000 tonnes per year, as well as energy savings of at least 300,000 tonnes of CO2 equivalents. There are also significant health benefits for workers due to reduced exposure.