PVC and the three pillars of sustainability

Economic sustainability

Several factors influence the competitiveness of individual PVC manufacturers. These include:

(i) Corporate scale and the production capacity per manufacturer

In this respect the European PVC market still has a large number of relatively small PVC manufacturers with only two manufacturers having greater than 1 million tonnes installed PVC capacity. There continues to be much talk in the European industry about the need for further rationalisation in recognition of the need to develop a more sustainable industry structure.

(ii) The size of production plants and their configuration in relation to the grade range

Economic assessments suggests that the current European PVC industry structure has not reached the optimum size and configuration.

(iii) Regulatory framework and its influence on costs

Discriminatory legislation against one material or product may make that material or product uncompetitive. Business will tend to migrate to regions where the costs are lower.

There are also several factors that influence the competitiveness of PVC products relative to alternative products:

(i) Cost/performance ratio in comparison to rival products.

Several studies have been conducted to compare the cost of PVC products and alternatives. The Prognos study in 1999: "PVC in selected product systems - a contribution to the sustainability discussion", showed favourable economics for PVC products in comparison to alternatives for cables, packaging, pipes and windows. A study conducted by GUA (Gessellschaft fur umfassende Analysen GmbH) in 2000 demonstrated significant economic advantages for a variety of PVC building and medical products.

The UK Department for Environment, Food and Rural Affairs commissioned one of the most comprehensive recent studies and the results were published in March 2000. The UK Government study made environmental life cycle and economic comparisons between PVC flooring and linoleum, PVC windows and timber, PVC rainwater pipes and aluminium, and PVC thermoformed packaging and polystyrene. Ranges of internal and external costs were used to arrive at "comparative total economic costs". According to the Government study from a environmental life-cycle assessment point of view, "PVC was found to be the best material for some uses, but not all - although the differences were marginal", however from an economic standpoint, "The life cycles of PVC products would appear to involve significantly lower costs than equivalent product made out of alternative materials."

(ii) Raw material prices

In common with other thermoplastics, PVC requires hydrocarbon feedstock and is therefore subject to the vagaries of hydrocarbon markets. However, the effect of hydrocarbon price fluctuations on PVC pricing is less dramatic as compared to most other thermoplastics as the hydrocarbon content of PVC represents less than half of the molecular weight.

(iii) Supply in relation to demand

Manufacturers will get better margins if the product is in short supply, however in the long term the supply/demand balance will be maintained.

(iv) Innovation potential

This is important not only in relation to new product development, but also in terms of making further efficiency, and hence cost, improvements in relation to the manufacturing and processing operations. For example, PVC plastisols for sealing the underbodies of cars today use 25% less material, with a reduction in application temperature of 30% compared to earlier formulations. These efficiency innovations have helped PVC to sustain its position for this application.

Environmental sustainability

We have seen that PVC products already rate relatively well in terms of economic and social sustainability. This is probably why the PVC market has continued to grow steadily despite attacks from some environmental Non-Government Organisations (NGOs). We must therefore maintain or extend any advantage that PVC products have in relation to economic and social sustainability.

The PVC industry's main sustainability challenges relate to environmental aspects of sustainability. This has been the focus for activists and politicians - responding to perceived public support for the activists' views.

In order to fully understand the environmental sustainability challenges the PVC industry has participated in various studies. Most recently a 'Sustainability Evaluation of PVC using The Natural Step Framework' was completed and published, with the support of the UK Environment Agency, in July 2000. The study is available from The Natural Step UK - www.naturalstep.org.uk.

The Natural Step Framework uses a set of scientifically based sustainability principles in order to arrive at a set of long-term challenges for the industry to meet if it is to achieve environmental sustainability.

The UK Sustainable Development Commissioner, Jonathon Porritt, chaired the steering group that included UK PVC manufacturers INEOS Vinyls and Hydro Polymers along with a group of major UK retailers. In a letter written to introduce the evaluation study Porritt made it clear that the challenges identified for PVC are "not that dissimilar from the challenges that confront all plastics". He also recognised that there is a need for a level playing field:

"It serves little purpose arguing for the elimination of PVC without first assessing the degree to which any substitutes would have a lower 'sustainability footprint'. PVC may or may not have a place in a genuinely sustainable future (depending on whether or not it can meet the challenges outlined in our Evaluation), but exactly the same questions must be asked of all materials, be they man-made or natural, before leaping to what are often ill-judged and unscientific conclusions."

The European Commission's PVC Green Paper, published in 2000, identified key ecological sustainability issues for the PVC industry to address - these relate to:

(i) Additives - especially Cadmium and Lead containing stabilisers and Phthalate plasticisers.

and

(ii) Waste management - as PVC landfilling and incineration are considered to be sub-optimal, and recycling is felt to be too limited.

These key issues identified in the Green Paper clearly must be the priority environmental sustainability issues for the PVC industry to address. Addressing these issues is also consistent with moving towards environmental sustainability for PVC as described in studies such as the Prognos study (1999) and The Natural Step study (2000).

All responsible companies have in place programmes to improve their individual environmental sustainability, INEOS Vinyls is no exception. However, no single organisation can address the key environmental sustainability challenges in isolation as the issues span the supply chain and total life cycle, including waste management. Some networking is therefore essential.

More information about sustainability and PVC can be found in section Vinyl 2010.