A European Technology Platform for Sustainable Chemistry

EIB Funding for RTDSustainable Chemistry Needs & Examples

ETP Industrial Leaders Meeting

Brussels - 17th October 2006Russel Mills – Dow Europe

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Overview

• Funding Strategies & Goalsfrom SRA & IAP

• 2 Project Examples

– “Factories of the Future”

– “Homes of the Future”

+ Background info for inter ETP follow up

“Factories” simpler to finance, but “Homes” larger €

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Funding Strategy & Goals

• Our stakeholders are diverse (the “Chemistry using industries”)

– but share common sustainability goals

• We are the current global leader– future EU leadership in “Sustainable Chemistry” relies on making broad

range of technologies more sustainable

• Start with a broad based funding strategy– illustrate SusChem “added value” via higher visibility projects

Sustainable Chemistry: invisible enabling element in product innovations

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• IAP financing needs based on bottom up project reviews – first draft IAP endorsed at Budapest stakeholder meeting (Aug 06)– End 08 appraisal/revision to clarify alternatives (JTI or broad)

• For FP7 theme, typical annual funding target ~ 50 Mn €– but combining themes, country programmes and industry contributions

annual figure reaches ~ 1.5 Bn €

• Varying SusChem roles to support participating stakeholders

Funding Strategy & Goals

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Funding Facilitation Roles for 2007

Large Corporates

• Multinationals innovating in Europe participate in SusChem

• Typical interests:– Off balance sheet funding models for riskier consortia– Funding top ups to make “sustainability add-ons” viable

Small & Mid caps

• Substantive variation in regional needs

• Initial focus on alerts and best practice sharing SMEs

• Outreach programme plan via National Suschem Platforms, MSMG & federation network (offices in all EU countries)

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Example Projects & Needs

• (Bio) Factories of the Future– Pilot Plants & Demonstration Units (accelerate scale up) – Sustainability add-ons

• Bio-refineries: add sufficient value (versus burning waste) to minimise subsidies

• (Smart Energy) Homes of the Future– Portfolio of end product innovations (dependent on

chemistry) to develop scaleable business models• revenues from licensing, cost reductions via shared demonstration,

LTCs and regional development rights

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“Factories of the Future”

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• Integrated cluster of bio-

industries• Variety of technologies• Producing chemicals,

biofuels, food ingredients and power

• Using progressively lower value biomass as raw materials

Integrated diversified Biorefinery

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Financing issues despite Sunny outlook

• IB growth (next 5 years): 77 –> 125 Bn €1. Largest € growth driver: Bio-fuels2. Key public/sustainability issue: using lower value raw materials &

adding more value to waste streams

• Financial markets support 1 not 2

• PPP discussion points:– mixed loan equity models / demo unit funding / deferred

interest on “development dependent” income streams / investor confidence issues / shifting public funds from production support to investment support

Issue not more €, but when/where to use public funds

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Energy / ResourcesEnergy / Resources

• High efficiency Thermal insulation

• Low cost Fuel cells/ batteries

• Efficient domestic appliances

• Phase changing materials

• Ultra Efficient lighting

• Photovoltaics

• Water and waste management

“Homes of the Future”

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• Awareness enhancing technologies

• Domotics

• Smart materials

• Remote shopping

• Security

SmartnessSmartness

Energy – Comfort - Health - SmartnessEnergy – Comfort - Health - Smartness

• Self cleaning surfaces

• Remote diagnostics - monitoring

• Sound insulation

• Sustainable consumer products

• Personalized nutrition

Health / comfortHealth / comfort

• Air quality

Innovating

up value chain

Innovating for the “Public Good”

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Why would a company invest in Smart Energy Home concept?

• Partner platform to facilitate testing and scaling up

• Direct feedback from end users ‘living innovations’

• Implementing results of leading FP projects in real life solutions for consumers

Different prototypes of ‘houses of the future’

Added value for participants

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20082008

Network & partners platform implemented

20122012

Demonstration Phase

> 2015> 2015

Commercial scale up: equity, licensing, or downstream partnerships options

Indicative implementation planning

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Portfolio Financing Issues

• PPP discussion points:– SME involvement to accelerate scale up– Demo unit funding to share risks– Risk/Revenue sharing across multiple

developments & regions– Special funding vehicles to bridge gap

between consortia or institutional “demonstrations” and “mass market” options

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Some final thoughts …

• Our industry … good at building technology road-maps & classifying technical risks … less good at developing business plans to clarify future revenue streams and financial risks

• More sustainable production implies more sophisticated units …. multiple countries evaluating financial support for demonstration units …. …. opportunities to exploit joint financing at EU level

• We innovate on behalf of our downstream customers …shared financing with other ETPs can accelerate this cooperation