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voiceover: A key component of the
modern world economy, the chemical

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industry delivers products and
innovations to enhance everyday life.

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It is also an industry in transformation
where chemical executives and

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workers are delivering growth and
industry changing advancements while

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responding to pressures from investors,
regulators, and public opinion.

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Discover how leading companies
are approaching these challenges

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here on the chemical show.

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Join Victoria Meyer, president
of Progressio Global and

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host of the chemical show.

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As she speaks with executives across the
industry and learns how they are leading

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their companies to grow, transform, and
push industry boundaries on all frontiers.

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Here's your host, Victoria Meyer.

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VictoriaM: Hi, this is Victoria Meyer.

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Welcome back to The Chemical Show
where Chemicals Means Business.

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Last week, I talked about the Six Trends
Driving the Chemical Industry Today.

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Some of you told me I
was missing a big trend.

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In fact, Chat GPT and yes, I
went out to ask Chat GPT what it

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thought about the biggest trends
in the chemical industry today.

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Well, Chat GPT told me I
was missing four trends.

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Four.

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That's a lot.

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I'm actually going to bundle that
into a single yet very complex trend.

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Sustainability.

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Sustainability means different things to
different people in different companies.

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And I'm just going to frame this in the
context of the chemical industry today.

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Sustainability across the industry
covers a wide range of topics.

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We've got clean air and clean water.

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And what I think of as kind of the
roots and the core of environmental

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sustainability and responsibility
that across the industry

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we've been focused on forever.

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Right, really and truly.

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Decarbonization.

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Reducing water usage, both industrial,
what we're using in manufacturing, in

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the production of the wide variety of
chemicals, um, and other products that

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we're producing, as well as the final
usage, um, at the consumer level, right?

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So a lot of focus on reducing water usage.

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Circularity and circular
solutions, often plastics, right?

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So that's the most common place we talk
about is plastics, but also carbon.

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And if you listen to my interview a
couple of weeks ago with, um, Kevin

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Norfleet from Celanese, we talked
about carbon circularity in the form

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of carbon capture and utilization
and, and the repurposing carbon there.

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Um, also textiles is a really big area.

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There's a number of, um, startups and
other textile focus firms focused in

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that area because textile recircularity
and textile circularity is critical.

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In fact, one of the companies I'm
doing a lot of work with right now,

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Carbios, has developed a solution
for this, but they and others are

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trying to solve this challenge.

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Um, green hydrogen and green methanol.

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We've talked about that
on The Chemical Show.

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Green electricity, whether
it be solar, wind, or water.

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And if I think about solar and wind,
both of which require an abundance

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of chemicals and other minerals
and materials to be successful.

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Electric vehicles, right?

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We can't talk about
electrification without talking

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about EVs, electric vehicles.

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Biotechnology and bio
based chemicals, right?

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So we've talked about that a lot on
the Chemical Show and, and highlighted

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some innovative participants across
the industry, people ranging from

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Lanzatech to Integrity Biochem
to Solugen and others, right?

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And then sustainable supply chains, right?

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So.

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A lot of times that's in the
context of scope three emissions.

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Sometimes sustainability is in the
context of business sustainability

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and business continuity.

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But what we're seeing there is
around shorter supply chains,

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alternative fuels and more.

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So there is no doubt that the
chemical industry and it's partners

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are investing billions and perhaps
trillions in sustainable solutions.

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And yet the question remains,
who's going to pay for it?

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How quickly can it scale?

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And when is it going to be profitable?

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So that brings me maybe to the whole
framework of today's conversation.

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Number one, sustainability is
absolutely a key trend driving the

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industry today, but Can Sustainability
and Profitability Coexist?

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And that's a big question.

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So when we, when we think about this
and when I look at it, there are a

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number of companies that are rolling
back their sustainability goals, right?

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So one of the latest ones I've heard
is Coca Cola, but I actually went out,

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I did a Google search really quick
just to say, okay, what companies have

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rolled back their sustainability goals?

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And these are the headlines "More
than 40 Fashion Suppliers Have

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Rolled Back Climate Commitments.

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What's Going On?"

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So that was something that was
published just four days ago.

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Um, another article, "How Companies are
Starting to Back Away from Green Targets."

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Here we go.

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"Swiss giant Nestle has Rolled Back
Recycling Targets and the Difference

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Amounts to the Weight of 30 Eiffel
Towers.' Um, "Shell weakens it's 2030

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Carbons Emissions Reduction Target."

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So that is just on the first page.

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You, if we were reading it on a
newspaper, we'd call it above the fold.

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It's before you have to scroll.

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So there's a lot of concern here, right?

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So this, this is just a
snapshot of the headlines.

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People are  very invested
and concerned about this.

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And yet at the same time,
companies are doubling down.

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So just this week we heard from Evonik,
um, that it's new innovation strategy

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will focus on bio based solutions.

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The energy transition and the circular
economy, and that Evonik expects these

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three growth areas to generate 1.

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5 billion by 2032, right?

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So the company is investing
heavily in its R& D efforts in

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other efforts towards what I would
categorize as Sustainable Innovation.

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So clearly.

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It's of interest.

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Again, I've, I've already mentioned,
I've talked to a number of companies

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on The Chemical Show that are
really committed and focused.

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And in fact, their entirety of their
business model is really around bio

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based and sustainable solutions.

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So, so what gives, right?

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Can Sustainability and
Profitability coexist?

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Maybe.

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And I think the reality is it's
not going to be fast, right?

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So there are no fast solutions.

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When we talk about the innovators,
these innovative solutions

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don't roll out very quickly.

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Getting to scale.

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To the scale that the chemical
industry is in is not a fast pace.

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It took us decades, hundreds
of years, depending on which

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products you're looking at.

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Right.

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So there's a lot of things going on here.

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Um, what I would like to articulate
that was maybe some of the

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challenges that are going on today.

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So, you know, that headline
that said, Oh, Companies are

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rolling back what's going on.

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Well, let's talk about what's going on.

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And I've talked to companies across
the value chain in different parts

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of the chemical industry, um, to get
some of this feedback about some of

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the challenges that they see, some
of the challenges that you see.

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So number one is Affordability.

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It gets back to the profitability.

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Who's going to pay for it?

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Corporate purchasing's willingness
to pay more for circular or

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sustainable products is not there.

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Right.

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So there seems to be conflicting
objectives between a quest to

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continually lowering costs.

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Right.

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Um, which often happens when
you're talking with procurement

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across all industries, right?

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They are tasked with reducing costs,
with getting the best price, and

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their willingness -  and I'm hearing
this a lot  really across product

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lines - is their willingness to pay
more for those products doesn't exist.

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So even products that we know that are
readily available in a recycled format.

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So let's take a recycled PET.

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Despite having corporate objectives.

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So if we take the plastic bottlers,
um, whether it be Coca Cola or Pepsi,

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whether it be other companies that are
using a lot of plastics and a lot of

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PET and packaging, their willingness to
pay more for recycle to help meet their

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sustainability targets and what their
customers are asking for is not there.

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Right?

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So misalignment of objectives,
that'd be one thing.

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Another challenge is really around the
individual consumers willingness to number

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one, pay more for products that are green,
sustainable, sourced responsibly, more

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sustainable supply chains, et cetera.

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Right?

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Are we willing to pay more?

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Oftentimes, not really.

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Consumer's willingness to have less.

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Whether it be clothing or other stuff.

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So that consumerism has absolutely
driven demand across the chemical

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industry and other industries.

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And yet at the same time, it also nets
out to a problem that we've got more stuff

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and more stuff that eventually has to be
disposed of and disposed of responsibly.

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So, you know, there we go.

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Part three related to the consumers.

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The consumer's willingness to change
their behaviors around recycling, right?

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So talk to anyone involved in the
recycling industry, go look at the

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recycling numbers for plastics,
cans, bottles, um, and glass.

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It's, it varies, it varies by region,
by state when you look across the US, by

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country, but really it's remarkably low.

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A remarkably low number, even
for those that have and have

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curbside recycling programs.

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So one of the things we hear
a lot about oftentimes is the

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inaccessibility of recycling
systems, and that is absolutely true.

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But I know, and I'm guessing you
know, people that even though they

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have easy and readily available
recycling programs, curbside recycling

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programs, don't take advantage of it.

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Right.

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So there needs to be behavioral
change and there's a lot of different

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suggestions out there in the industry
and across the industry and beyond

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that offer up suggestions to that.

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But individuals.

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You and I.

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Our friends and family and
people across the world.

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Our willingness to change behaviors
is critical in order to solve

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some of the sustainability and
profitability and circularity.

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And on and on.

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Right.

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So that's, that's the second
challenge overarching.

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The third challenge is Regulations
and Regulatory Approvals, right?

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So anyone that is trying to introduce new
products, new technologies has faced this.

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It is, there are hurdles,
there are massive hurdles.

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The pace is slow.

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This is not just in the US, this is
globally, um, so the plastics industry

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as they are trying to get advanced
recycling in place are facing hurdles.

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The biotech and the bio based and
green chemical innovators as they

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try to bring new products to market
are facing slow regulatory approvals

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and hurdles to try to get that.

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So again, we have a misalignment
of objectives and actions, right?

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So we've got objectives and I think
we've got objectives globally.

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We've got objectives at a national level.

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We've got objectives at a corporate level,
um, to achieve certain sustainability

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goals profitably, we hope, right?

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So that's one of the other
premises that we're, we're

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working on  in today's episode.

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But the hurdles that are in place,
um, act counter to those objectives.

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You know, the fourth thing is
around investors, investors,

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willingness and patience.

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So investing in and supporting businesses
through the time it takes to scale

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through the profitability needs, right?

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One of the things we see is getting a new
technology to scale takes a long time.

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I'm going to use LanzaTech as an example.

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And you guys know I had Jennifer
Holmgren on, uh, early in the

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early days of The Chemical Show.

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I need to bring Jennifer back
on and get an update from her.

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LanzaTech has been at this for 20 years
before they're realizing profitability.

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Um, Trillium.

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Uh, was on The Chemical Show last year.

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Advantium was on The Chemical Show.

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These guys have been at it for
years, seven to 10 years easily.

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Solugen, which was on recently and I had
Gaurab, the CEO of Solugen on recently.

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They've been at this for years.

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It's almost a decade to get to scale
much less profitability, right?

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So what that requires is
patient investors, right?

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A long term view in terms of how to
get there, a willingness to experiment,

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adapt, scale, and grow on things
that may or may not be successful.

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And sometimes it, it takes a
long time for these sustainable

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solutions to become successful.

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Um, and yet there needs to be a certain
amount of willingness and patience.

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You know, the other piece that ties
into investors is, you know, if we

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look back over the past several years.

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ESG investing was all the rage.

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And there's been a lot of pushback on
it recently and people say, Oh, that's,

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you know, appropriate or inappropriate.

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I'm not saying it, whether it is or not.

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Right.

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So I think investing guidelines,
you do what makes sense for you.

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I think we also, you know, companies
are held to certain standards and

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there are certain regulations.

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Right.

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So I'm not debating any of that, but
there was an interesting article, uh,

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just this week in Harvard Business
Review in their online magazine.

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And it's titled, "It's
Time to Unbundle ESG."

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And part of this is, and why
were they together anyway?

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So environmental, social,
and governance, right?

00:14:42.754 --> 00:14:46.854
And especially when these things move
at a different pace and they've been

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called different things through the years
there's an opportunity to unbundle and

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maybe it will be unbundled once again,
the E environmental, I tie that back

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over to sustainability is likely to stay.

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It will stay.

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We're on this path.

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I think we're committed
to this path, right?

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And then the fifth challenge.

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And when we talk about sustainability and
whether sustainability and profitability

00:15:10.494 --> 00:15:17.849
can coexist is a collective openness and a
willingness to recognize that Number one,

00:15:17.869 --> 00:15:19.309
we don't have all the solutions today.

00:15:19.549 --> 00:15:21.009
There are alternate solutions.

00:15:21.479 --> 00:15:24.009
We don't necessarily have
the right metrics, right?

00:15:24.039 --> 00:15:27.319
And so we need to define
those metrics more broadly.

00:15:27.689 --> 00:15:33.719
And in, in doing so, recognizing that
one size does not fit all one target.

00:15:33.974 --> 00:15:36.584
Does not fit all there's
a number of variables.

00:15:36.594 --> 00:15:39.744
So, you know, if you go back to where
I started early in today's episode

00:15:40.114 --> 00:15:44.864
about all the things that fall under
the sustainability umbrella, whether

00:15:44.864 --> 00:15:51.324
it be circularity or water reduction or
cleaner air, green hydrogen, they are.

00:15:51.634 --> 00:15:56.214
All take us to a sustainable
future in a different way, right?

00:15:56.474 --> 00:16:00.734
And so with, it requires different
targets and different goals and different

00:16:00.744 --> 00:16:06.924
objectives, and ultimately we need to
get to that place and lack of openness

00:16:07.024 --> 00:16:11.863
around what sustainability may be and
where those definitions are and how

00:16:11.864 --> 00:16:17.849
to draw those hurdles is one of the
challenges that, that faces Sustainability

00:16:17.859 --> 00:16:20.309
and sustainable solutions today, right?

00:16:20.339 --> 00:16:21.649
So coming back.

00:16:21.699 --> 00:16:24.799
Can profitability and
Sustainability coexist?

00:16:25.819 --> 00:16:30.599
Yes, I'm going to say yes,
but it's not immediate.

00:16:31.479 --> 00:16:35.499
Some of these hurdles and challenges
that I've identified need to be

00:16:35.559 --> 00:16:41.539
overcome, but I go back to also where
I started, which is, the trends.

00:16:41.874 --> 00:16:45.754
Sustainability is absolutely one
of the key trends for the chemical

00:16:45.754 --> 00:16:52.024
industry, really for all process
industries this decade and beyond.

00:16:52.264 --> 00:16:54.554
So that's it for today.

00:16:54.654 --> 00:16:56.284
I'd love to hear your
point of view on this.

00:16:56.864 --> 00:16:57.784
What do you think?

00:16:58.224 --> 00:17:00.824
Can sustainability and
profitability coexist?

00:17:01.204 --> 00:17:02.924
Do they coexist today?

00:17:04.174 --> 00:17:08.284
How will they coexist in the future and
what do we need to do to make that happen?

00:17:08.314 --> 00:17:10.674
So head on over to my LinkedIn page.

00:17:10.694 --> 00:17:12.664
I'm going to have a post out there.

00:17:12.684 --> 00:17:16.064
I'd love to hear from you and
just see what you have to say.

00:17:16.464 --> 00:17:19.054
So thank you for listening
to today's chemical show.

00:17:19.094 --> 00:17:21.744
Keep listening, keep following,
keep sharing, and we will

00:17:21.744 --> 00:17:23.724
talk with you again soon.

00:17:28.756 --> 00:17:30.536
voiceover: We've come to
the end of today's podcast.

00:17:30.946 --> 00:17:33.496
We hope you enjoyed your time
with us and want to learn more.

00:17:33.905 --> 00:17:36.165
Simply visit thechemicalshow.

00:17:36.175 --> 00:17:38.925
com for additional information
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00:17:39.525 --> 00:17:43.635
Join us again next time here on The
Chemical Show with Victoria Meyer.