A Sustainable View from Europe

Sustainability penetrates all of our supply chains, starting with the raw materials. But we will see also clear demand from our customers to confirm “sustainability.”

Sustainability is not a fashion or marketing tool or something abstract over the horizon that might come sooner or later. It’s here and now and impacts all our processes – and it’s not wait and see!

It goes further. You go to your bank to ask for credit for a new grease plant. You know each other very well, and normally these are quite smooth discussions, business plans and so on. But the banker says, “OK, but you know you want to invest in a new grease plant. Is grease still going to be a sustainable business in five years? We are not allowed to invest in oil anymore.”

QIs the pressure to be sustainable coming from all angles?

It is bigger than we think. Our industry has started to develop joint communications and calculation schemes, based on common standards, but there is still a lot to do. The UEIL’s working groups for sustainability are very good example, but the Green Deal and other developments are speeding up and we have to increase speed.

Lubricants are key technology – we keep things moving. So we are, from that point of view, in many aspects sustainable. Our lubricants save much more in the use phase than we have to invest in terms of carbon footprint to produce our products.

But it is no reason to lay back because, first of all, we cannot account or balance our own efforts against the savings of our customers or consumers. We have to reduce our own carbon footprints or efforts. We have to look into our supply chains, reducing carbon foot print, avoiding hazardous materials, replacing fossil by renewable sources, etc.

Our customers and markets will change as well – the move to battery electric vehicles, for example, will change product qualities and performance but also demand significantly. A full electric vehicle needs less than 50% of the lubricants of today. Wait and see?

QWhat’s happening on the legislative side in Europe?

The EU is discussing it, but Germany wants to become a forerunner, and they have introduced the idea of “Lieferkettengesetz,” which means you have to take responsibility for your supply chain.

For the time being, climate change and carbon footprint are the main focus, if we talk about sustainability, but social aspects are also relevant and will be addressed in the near future.

In general, we have to learn to optimize processes, but reduce resources and ecological impact as much as possible without losing competitiveness. Easy to say, hard to do!

To improve sustainability, not only management or the person responsible for environmental issues is responsible, but also any person in the company. The product developer influences the sustainability of the company with the design of a new product and the choice of raw material. The purchaser has then the decision to take it from A or B, so he influences sustainability. The key account manager also influences if he promotes the better product with a higher carbon footprint in production but much better energy efficiency in the application or the cheap product.

QIs there anything in the European Union’s new Green Deal package that people are overlooking?

There are many aspects in the Green Deal initiative. Unfortunately, we do not know all the impacts right now, but there are many. The Green Deal, for example, says that we have to focus more on cradle-to-grave or even cradle-to-cradle approaches and, for sure, this will impact our industry.

Again, the question is of renewable energy and renewable material to renewable quotas – plastic is heavily criticized. As an industry, we are involved in plastics manufacturing. If you look at the food industry, if it has to change packaging and we have to go back to glass bottles and so on, it will definitely impact our industry.

One of the key targets of the Green Deal is a price tag for greenhouse gases. As long as this happens on a level playing field, it might increase costs equally with consequences for customers and consumers – and push “green technologies.” So far so good, but we have complex global supply chains – the idea is to charge imports when crossing the system border according to their carbon footprint.

Basically a fair idea, but what about exports to other markets? What if products cross these borders a few times in the value chain? How to calculate proper figures for complex value chains?

Q Would it be wise for the industry to start preparing for the impacts now?

One initiative here in Germany is that VSI [the German Lubricants Association] has decided to roll out NAch – we have already developed some standards and default values for product groups. Not all these findings are integrated in the European initiative by UEIL, where ATC and ATIEL – so our supply chain – are involved as well.

We want to get more power to discuss with politicians or to inform via the media and the public to get more awareness of the lubricants industry.

Communication is the key issue to get things done. Internal communication to find aligned positions, and external communications to our suppliers and key customers, but also science, the media and society to influence political developments.

QWhat can we do to address the confusion surrounding the number of standards and certification organizations?

Unfortunately, I do not have an answer but you address one of my biggest concerns. Not just talking about our industry, even. It is confusing. We have almost one label for any product or criterion. Who does understand and keeps an overview?

It would be extremely helpful if our industry had one joint standard for greenhouse gas calculation and related topics. This must be a non-profit organization controlled by the associations. We have started such a process, but it might be a long journey, and do we have much time.

We have to talk in our industry, as well as linked industries and associations. Authorities, sole certification bodies, sustainability organizations and eventually NGOs and of course all customers and supply chains have to be involved: “Hey, let’s focus on a minimum number of criteria we definitely agree on and have to put on the list. And let’s try to get an easy system for this number of criteria to be ranked or to be grouped. Let’s put existing labels in that standard in kind of a meta-system. But let the system be certified and strictly controlled to be accepted.”

It doesn’t make sense to have a label that focuses only on greenhouse gas, only on health aspects or biodegradability. These are single criterion. We have at least to put them together in a kind of meta-system and then we have to keep it as simple as possible – but strict and reliable!

QHow do we get there? What’s the roadmap to that meta-system?

Communication. The VSI has initiated the concept. Internally, the next step is to convince their own members. Then the next step is to convince neighbor associations and neighbor industries. There we have to spread the idea. There are systems like ISCC for renewable fuels – so we can learn but need at least our own system. That is the way you get it done.

We have a good reason to join forces, but do it, do it, do it, again and again – communicate, talk and find a common understanding.