As the world grapples with the dual challenges of climate change and technological advancement, three sectors stand out as pivotal to our future: batteries, semiconductors, and bio-based chemicals. These industries are not only poised for substantial growth but are also set to redefine the landscape of modern economies. 

Leading stakeholders recently discussed immense transformative potential of these sectors  at the 4th edition of NextGen Chemical and Petrochemical Summit 2024 organized by the Indian Chemical News in Mumbai on July 11-12, 2024.  The ninth session, ‘Battery, Semicon and Bio-based Chemicals: The Next Growth Frontiers’ was moderated by Avinash Nayak, Partner, Kearney 

Emphasizing the need for collaboration between stakeholders, Ashwin C Shroff, Executive Chairman, Excel Industries Limited stated: "There are new opportunities emerging which will help us to reduce the consumption and make us do things more efficiently whether it is bio-derived or electric vehicles, and whether it is the semiconductors. I think these two are going to be growth drivers and we as a company have been looking at this trend of electronic chemicals. There is also the requirement of metals including some precious metals. There is lot of room for metal based industry but again how you extract them is going to be important, for example we are looking at hydro-metallurgy compared to the older technologies for the metal recoveries. Similarly renewable energy is required but  for a reliable 24x7 generation, you need to store it. Hence, storage batteries which are also a part of the electronics are also very important. There again you cannot do without chemicals and metals so there's a lot of opportunity. In the semiconductor area, there is room for a lot of very high purity chemicals which again is a great opportunity same as commodity chemicals. To tap the potential in metal mining and specialty chemicals, we need broader networking and partnerships. There are immense export opportunities and we need to work in collaborative business models.”

“I think the time to only look at economic growth and GDP growth is past. We need to balance the economy along with the ecology. I don't think there's a contradiction, it is a combination and synergy that we need to recognize. We can’t just focus only on increase in the per capita consumption. The world population as we all know is keeping on increasing so even if the per capita consumption goes down still there' will be an overall growth. We are all safe as industries and don't have to chase for more and more per capita consumption. Rather than chasing consumerism, we need to be responsible consumers whether as industry or as individuals,” added Shroff.

Stressing on the need for striking a balance between pursuing growth and adopting sustainable bio-based feedstock, Dr Sangeeta Srivastava, Executive Director, Godavari Biorefineries said, “Currently each country is looking at strategies for transition from fossil. Apart from bio based options, there are many ways of transitioning it to a sustainable development goal. Our aim is basically to make sure that we have a better place available for the next generation. We all have to think through it to make sure that we do transition in a way where our development and growth is aligned with sustainability. Since almost 30% energy consumption comes from the chemical industry, we need to make sure that we have better energy efficiency in our processes, make them more economical and sustainable because all our atom economy is very critical for the industrial growth. The industry cannot stop growing because we participate in each segment, from batteries to the fuel, from chemical to pharmaceuticals and everywhere else. We have to be growing but looking at all the aspects, we must use whatever biomass available in the country and start looking at that as a feedstock which is not being utilized completely.”

“This is the right time where we can see the consumer interest and the people are talking about how do we make sure that we have renewable carbon potion into the product because this may also help in some way for decarbonization of the whole industry and economy. We need innovation right from the farms, and talking about renewable carbon, it is going to come from the farms. Therefore, we need to have better yields stop reduction in soil carbon and retain it instead. There is innovation segment and then we need better process conversion for converting biomass into various chemicals such as bio oil which can go to the cracker and then convert onto products. We have a lot of space where we can innovate and make sure we get there and definitely AI and digitization will also support this kind of growth,” added Dr Srivastava.

Sharing his thoughts, Kalpesh Pandya, Vice President & Business Head – Cathode materials, Epsilon Advanced Materials listed a few key challenges. “The EV industry ecosystem consists of the end users, battery makers and cell makers, battery chemicals and we have the supply chain and the miners. We have a full fledged ecosystem except for the mining part. We only have two or three players in every segment. In that sense we are just starting out. There are several challenges that the downstream players have to face. First and foremost is how do you get a guaranteed and a reliable supply chain of the EV ecosystem which today is dominated by an incumbent solid player which is China. On the anode side, China is about 70% and on cathode side specifically, it is about 90% or even higher. Hence, the world is looking for an alternative, not just it's not anti-china but it's just diversification of the supply chain. In that sense, Epsilon plans to increase anode capacity to 100 KT by 2025 and cathode capacity to 10 KT by 2030. On the anode side, we have an ingrown in-house technology that was developed from R&D and now is at a pilot scale. On the cathode side, we just acquired a German company where we have R&D pilot in cell testing.”

“Another challenge is that the entry barrier is very high because the capex is very high and the qualification criteria of 2 years. Unlike traditional chemical industries, the technology landscape here evolves very rapidly. Comparing EV industry 10 years ago in terms of the chemistries for anode and where they are now is different. The way forward is the focus on partnerships within the players to basically take this ecosystem forward. The government should step in and make sure that not only the upstream players but also the advantages are passed on to the downstream players so that this ecosystem can actually evolve. There is a great opportunity for the Indian players because even conservative estimates point to about 14 to 16% CAGR growth up to 2030,”  Pandya informed.

Darshit Jaju, Head – Battery & Renewable Energy, Hindalco Industries believes that while there is a massive opportunity but certain challenges could act as impediments. “The most important part when it comes to any kind of cell raw materials is the lithium as cell is a very high-tech product. Any kind of raw material for it to be adopted in a lithium-ion cell takes around 2 to 3 years of qualification timeline. Therefore, even if you are setting up any new factory the pace at which the revenue will be generated by that factory , it will be very slow, especially in the beginning because you will be giving a lot of samples for trials and qualification. Hence making the necessary profit to justify returns in the initial first 2-3 years is very difficult. If we want to bring in a systematic way of setting up the supply chain in the country, policy support is extremely important, especially in terms of capex subsidy, investment tax breaks. Things like these will spur the investment and spur the risk appetite of the investment community and will help in setting up the early stage ecosystem which is very important.”

“Second very critical thing is that we have established players in Japan, Korea and China who present a good opportunity for various companies in India to do a technology collaboration with them and establish their supply chain in India and their manufacturing basis in India. The government policy can help and in this case an accelerated dialogue, more such events and initiatives that can spur the interest of these respective countries to do such alliances and JVs in India. The third thing is that a lot of these chemical industries require such as environmental clearances and various other statutory clearances. Many times there are delays at various levels to get the ball rolling and will increase overall capex value which makes the investment unviable over a period of time. Hence, accelerated statutory approvals for such specialized industries which are strategic in nature are required. EV is just not only about decarbonization but it is also about the energy security of the country. This sector is a strategic sector for India's growth and hence it has to be treated well,” added Jaju.

Sharing a broader overview on the current market trends, opportunities and way forward, Nitin Sharma, CEO & General Manager, Clariant IGL Specialty Chemicals said, “The market size for bio-based chemicals is estimated to be around $1 billion in 2024 which would be growing at a CAGR of 9.6% to around $210 billion by 2032, Now the transition to a biobased economy has multiple drivers, the foremost being the environmental issue of climate change. If we continue to rely on the existing climate commitments as per the Paris agreement, the global temperature will be rising by 3.2 Centigrade by the end of the century. One of the key drivers is the growing population and growing purchasing power and the increasing demand on resources. It is estimated that the global population will reach 9-6 billion people by 2050 and it's calculated by experts that we will require three planets like Earth to sustain our current standard of living. So for me the chemical industry through the biobased chemicals and speciality chemicals is core to the solution of the global challenge of climate change as well as resource scarcity. The demand for the speciality chemicals and bio based chemicals will strongly continue to grow through 2030.”

“While nowadays there is a greater expectation from stakeholders on reduction of the carbon footprint and reduction in emissions, most of the large organizations are talking of Scope 1 and Scope 2 and Scope 3 targets reductions. Even my own organization aims to reduce our Scope 1 and Scope 2 by 40% and scope three emissions by 14%. Until this the whole value chain is not equipped, this will not be achieved. Coming to the investor side of it, they are changing their strategies and aligning it more towards the Paris Summit targets as criteria for any of their future Investments. The biggest driver for me would be the government policy and the regulatory framework for enabling more safer and greener products. The flagship program of the Indian government, the ethanol blending program has really fueled the whole bioethanol infrastructure in the country and today at 11.2% ethanol blending and the targets are that by 2025 we will be at 20%. There is a growing traction and we are seeing lot of multinationals who have already Incorporated sustainability as part of their core strategy and till the time the market matures will require support by the government on policies and  subsidiaries being given to biobased products so these also become economical and also achieve the economies of scale like the petroleum based products,” added Sharma. 

Hemant Waghela, Business Manager-Adsorbents India, Clariant India explained why sustainability must be at the core of each of the segments. “In India, there is a substantial portion of the patient population with lung cancer who never smoked yet occupational exposure to asbestos in construction based industry and exposure to chromium cadmium, arsenic coal products at the workplace are causing it. We are at the transforming India stage and looking for opportunities for growth but the challenge is how should  sustainability become the basis for everything because if we are growing the challenges are going to be there and sustainability is going to play an important role.

“In terms of semiconductors, the climatic conditions are important and so are storage, transportation, and packaging .At our end we have developed Cobalt dichloride free products and we have shown that this is working and as per ZDX standard which is required for the semi-conductor industry. These have been performing well. For such things with a sustainability and with the demand or the requirement, this is a growing market for India. Other countries like Taiwan have done a fantastic job and we need to adapt many things here in India and it will be a good challenge but at the same time there is knowledge and skills available which we need to utilize in the right way to grow in the right direction,” added Waghela.

The Summit was supported by DCM Shriram Chemicals as principal partner, Somaiya Vidyavihar University as academia partner, Cadmatic as platinum partner and Andhra Pradesh Economic Development Board (APEDB), Govt. of Andhra Pradesh as state partner.

Gold partners for NextGen Chemicals & Petrochemicals were Epsilon Carbon, Forbes Marshall, Gharda Chemicals, Indofil Industries, Ingenero, IPCO, Jaaji Technologies, Moglix, PIP, Port of Antwerp - Bruges, RIECO and Re Sustainability. Associate Partners are: HPCL and Nuberg EPC.

Supporting partners included Aarayaa Advisory Services, Archroma, India Glycols and Tata Steel Special Economic Zone and industry association partners are: ACFI, AMAI, CropLife India, Gujarat Chemical Association and PMFAI.