Data Gathering and Impact Assessment for a Possible Technical Review

Data gathering and impact assessment for a possible technical review

of the IPPC Directive – Part 2

Factsheet A3 Chemical industry

Potential amendment A3: Possible changes to the current provisions of Annex I of the IPPC Directive on Chemical industry: Biological processing, biofuels and pharmaceutical intermediates

Status: final– 12/09/2007

1.Issue

• Biological processing may be used in various sub-sectors of §4, while it is only mentioned under ‘4.5 Installations using a chemical or biological process for the production of basic pharmaceutical products’.
• Production of biofuels is currently not explicitly covered under the IPPC Directive. However, many Member States consider them to be covered as organic chemicals, while others see that bioethanol, and to a lesser extent biodiesel,arenot covered by the Annex I.
• §4.5 covers explicitly the “production of basic pharmaceutical chemicals”. However, the work of the IEG Guidance sub-group suggested that different interpretations exist concerning the extent to which pharmaceutical intermediates are covered by this article and/or articles 4.1 and 4.2.

• To what extent biological processes are currently covered by the article 4 and what are the clarification options concerning their coverage?
• What is the current position of ‘production of biofuels’ and what are the clarification options concerning their coverage?
• To what extent pharmaceutical intermediates are currently covered by the article 4 and what are the clarification options concerning their coverage under 4.1, 4.2 and 4.5?

The three issues of this fact sheet, “biological processing”, “biofuels” and “pharmaceutical intermediates”, will be described and assessed in sections 2, 3 and 4, respectively. In all the sections the sub-section x.1 describes the current practice; sub-section x.2 describes options for clarifying the issue; and the impacts of these options are analysed in sub-section x.3.

As part of the data gathering, a questionnaire covering all the issues was sent to the Advisory Group members. In addition, a questionnaire on biofuels was distributed to the national associations of bioethanol sector, with the help of the European federationEuropean Union of Ethanol Producers (UEPA) andEuropean Bioethanol Fuel Association (eBIO). European Biodiesel Board (EBB) was also consulted. Issues were also discussed with DG Environment and DG Enterprise.

2.Biological processing

2.1. Current practice regarding biological processing

1. Scope of the sector

The use of biological processes within chemical industry is part of ‘industrial biotechnology’ (also called ‘white biotechnology’). Biological processes in the production of chemicals involve the use of living micro-organisms or their purified enzymes as biocatalysts. This often avoids the use of toxic catalysts and extreme process conditions, although other waste streams may be produced instead. Enzymes can be used “in solution or fixed on a substrate, or as part of a polyfunctional enzymatic system, e.g. in living cells, free in a reaction medium or fixed on a substrate” [EC 2006c].

‘Fermentation’ is a key process in industrial biotechnology. Fine Organic Chemicals BREF [EC 2006c] defines it as “a chemical change induced by a living organism or enzyme, specifically bacteria, or the micro-organism occurring in yeast, moulds, or fungi to produce a specific product”. Such definition highlights well the fine line that separates ‘biological processes’ from ‘chemical’ ones.

Biological processes used in the production of chemicals, other than pharmaceuticals, include:

• Fermentation in the production of bioethanol(see also Section 3.1)
• Fermentation in the production of the raw material for bio-based polymers(e.g. polylactic acid, PLA)
• Biological process for producing pure S-chloropropionic acid:

Avecia (United Kingdom) has developed a biological process for producing pure S-chloropropionic acid, which is an intermediate chemical used in the synthesis of certain herbicides. Theirbiological process is less energy intensive than the conventional chemical procedures and it avoids the use of additional chemicals. [OECD 2001]

• Biocatalysis in the production of polyester:

Baxenden Chemicals (United Kingdom) has developed a biological process that uses the enzyme lipase from the bacterium Candida antarctica to catalyse the polymerization reaction in the production of certain polyesters. This involves much lower temperature (60 °C) than the conventional chemical process (200 °C) and the use of either a titanium or tin based catalyst with solvents and inorganic acid is avoided. The bioprocess also yields a more uniform and thus more valuable product. [OECD 2001]

Biological processes play a very important role in the manufacture of technical enzymes themselves. Technical enzymes include products for the detergent industry and other technical enzymes e.g. for the starch, textile and fuel ethanol industries. The production is based on modern biotechnology using bacteria and moulds. The finished technical enzyme product is in liquid or dried (powder or grains) form.

1. Size and structure of the sector

Bioethanol production is further discussed within Section 3.1 on biofuels.

At present, biological processes (e.g. fermentation and enzymatic processes) are commonly used in the fine chemicals sector, to produce for example vitamins, pharmaceutical intermediates and flavours. They are also making their first inroads into larger volume segments such as polymers, bulk chemicals and biofuels, and many other industrial sectors where they are expected to have increasing applications.

Large scale biological processing is used in ethanol production (for biofuel and industrial purposes) at least in 20 MS (Annex D).

The bioplastics sector registers continuous growth. According to European Bioplastics[1], pan-European consumption of bioplastics in 2003 was at 40000 tonnes. However the European bio-based polymer production has only very recently begun. Hycail, an enterprise from the Netherlands, has recently started operating a PLA plant which is to produce 50000 tonnes per year once the final phase of upgrading is complete. Procter & Gamble Chemicals is currently planning to set up a fermentative production of polyhydroxyalkanoates (PHA, a biobased type of polyester) in Europe. [IBAW 2005]

Bio-based polymersare an emerging sector and the production is expected to increase in the future. The total technical substitution potential, which can be derived from the material property set of each bio-based polymer and its petrochemical equivalent polymer is estimated at 15.4 million tonnes for EU-15, or 33% of the total current (2005) polymer production. However, a more detailed analysis taking into account economic, social, ecological and technological influencing factors lead to an estimated maximum of 1 million tonnes by 2010. [EC 2005]

Important production of technical enzyme takes place in Europe and the world’s largest enzyme plant employing 600 people is located in Kalunborg, Denmark [Novozymes]. It has not been possible to quantify the total production, but this may also not provide a good picture of the enzyme production processes as typically the enzymes quantities used in a process are relatively small. Consequently the absolute production volumes are also smaller than for many basic chemicals. Enzyme production takes place in a number of other MS, such as Finland, Sweden and the NL.

According to [Roos, P.] over 200 installations in the Netherlands use biological processing in the production of chemicals. Around 20 companies produce bio-based polymers[2], often as a division/part of large industries like DSM, Cargill, Dow and Avebe. The Netherlands has several hundreds installations producing technical enzymes (e.g. for detergents, food and cosmetic industries). Again, these installations are mostly divisions or parts of larger industries, such as DSL, Procter&Gamble and Unilever.

In Luxembourg, there is one installation of Dupont that produces films by bio-polymerisation. [Geimer, C.]

It is likely that the development of integrated diversified biorefineries - integrated cluster of industries, using a variety of different technologies to produce chemicals, pulp and paper, biofuels, food ingredients and power from biomass raw materials – will further blur the distinction between chemical and biological processes. As agricultural resources can substitute for fossil oil based raw materials, biological processes can be used to replace conventional chemical processes. [EuropaBio 2006]

Recent reports predict annual growth rates of nearly 5% for fermentation products (compared to 2-3% for overall chemical production) in the coming years. McKinsey & Company predicts that by 2010 bio-based (from bio-based feedstocks and/or by biological processes) products will account for 10 percent of sales within the chemical industry, accounting for $125 billion in value. Already, as of 2005, bio-based products accounted for 7 percent of sales and $77 billion in value within the chemical sector, and different studies agree that these products will play an increasingly significant role in the chemical and other manufacturing industries in the future. [EC 2003; EuropaBio 2006]

1. Environmental impacts

Compared to conventional chemical processing, biological processes are often more efficient and less energy-intensive. [EuropaBio 2006] Yet, biological processes are not emission free.

For example, in fermentation processes, water is used in both processes and cleaning operations, typically giving rise to effluentswith high organic and nutrient loads. An example existing installation in Finland, which produces industrial enzymes by fermentation, has a COD load of 4767 mg/l and phosphorus of 110 mg/l before treatment [Ympäristökeskus 2003]. These arerather high loads, for example in comparison with many of the organic fine chemicals reference plants in the OFC BREF [2006b].

The OFC BREF [EC 2006c] lists the main waste streams from fermentation processes as:

• biomass, possibly containing filtration auxiliaries

• filtered broth, possibly containing precipitation auxiliaries

• exhaust gas from seed and fermentation stages, containing broth aerosol, possibly being malodorous

• VOC from solvent use (used e.g. in the purification of enzymes)

• large volumes of waste water streams [EC 2006c].

Typically heat and steam are required in the processes and their production on-site may result in direct air emissions from combustion processes.

On environmental impacts of biological processing, see also section 2.2(c) regarding bioethanol.

1. Techniques for prevention or reduction of environmental impacts

The techniques for prevention or reduction of environmental impacts applicable to e.g. fermentation are elaborated in OFC BREF; an overview of applied abatement techniques is provided in Figure 1[EC 2006c].

Figure 1 – Applied abatement techniques for the waste streams from fermentation [EC 2006c]

Exhaust gases are often controlled with an in-vessel detector that automatically closes the exhaust valve or controls the addition of an antifoaming agent if there is a risk of the broth splashing or foaming the outlet. Each fermenter exhaust may be backed-up by a downstream cyclone. Thermal oxidation may also be applied where appropriate. Stack gas scrubbing, with hypochlorite or by using carbon adsorption or biological filters may be necessary for fermenter emissions that are malodorous. [EC 2006c]

If the biomass is classified as hazardous, it must be inactivated. This is carried out, for example, by treatment with heat, with chemicals or by application of vacuum evaporators at temperatures of 85 to 90 °C. Alternatively, the hazardous biomass is incinerated with sufficient heat (typically above 1100 ºC) and dwell times in order to achieve acceptable destruction efficiency.

Waste water streams from biological processing (including filtered broth) normally show high degradability of the organic load and are usually treated in a biological WWTP. The critical parameter is often the high nitrogen load, which represents a major challenge for a central biological WWTP. Hence, strategies, such as decentralised anaerobic treatment and removal of compounds containing nitrogen, may be applied. [EC 2006c] For example, nanofiltration may be used as a pre-treatment step to remove nitrogen and organic nutrients from the effluent before biological waste water treatment [Ympäristökeskus 2004].

In general, many of the BAT conclusions of the OFC BREF are applicable to biological processes and techniques for prevention and reduction of environmental impacts are not considered to entail excessive costs for this sector.

1. Current interpretation(s) and other legislation

Many MS consider that bioethanol production (fermentation) is (or should be) covered by the point 4.1 (b) of Annex I (see Section 2.2). Currently, bioethanol production is perhaps the most common biological process used in the chemical industry. Regarding the number of bioethanol production installations, see section 3.1(e).

Furthermore, for example in UK, biochemical (i.e. biological) processes are treated as chemical processes. [Vincent, R.] In Walloon region in Belgium, these installations are covered by permits regardless of the IPPC. [Amand, M.] In Finland, enzyme production installations are covered by IPPC permits.

The IPPC chemical guidance, issued by the Commission explains that:

“Chemical processing” implies that transformation by one or several chemical reactions takes place during the production process. An activity involving only physical processing (for instance simple blending or mixing of substances which do not chemically react…) would not be covered.

Thus the guidance makes clear difference between “chemical” and “physical” processing, but does not explicitly explain the position of “biological” processes. According to this guidance, the decisioncriterion seems to be whether or not chemical reactions take place. Biological processing is essentially chemical reactions driven by biological agents (thus also called biochemical processing). The Commission, in agreement with the MS, decided to address the specific issue of interpretation of the inclusion of biological processes in the context of the review of the IPPC Directive.

According to [Horváth, B.], there is a contradiction between the present draft EIA guidance and the draft IPPC guidance; the EIA considers biochemical procedures as chemical, while the IPPC guidance does not. However, the relevant EIA guidance was not identified[3].

The FAQ 8 issued by the Commission [EC 2004a], provides guidance on the coverage of enzymes by the IPPC Directive:

Are enzymes covered by Annex I section 4?

Many plant health products and pharmaceutical products are enzymes, and these are covered by sections 4.4 and 4.5 respectively. Beyond this, there does not appear to be any sound argument for their general inclusion.In particular, the link between enzyme production and food production (section 6.4) is tenuous, since even though enzymes may be used in such activities they are not themselves food products.

However, theUNECE[4] Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (also called the Aarhus Convention)[5] associates enzyme production with chemical industry. The Annex I of the Convention includes an additional sub-paragraph under chemical industry section:

4 (g)Chemical installations in which chemical or biological processing is used for the production of protein feed additives, ferments[6] and other protein substances.

Cefic[7] is not opposed to the inclusion of biological processes together with chemical processes in the scope of IPPC Directive, which is clearly said in the OFC BREF scope. In some cases it would provide a level playing field for ensuring minimum environmental impacts (and maximum energy efficiencies) for the potential supply of these chemicals. [Cefic 2007]

It has not been possible to estimate the number of biological processing installations (other than bioethanol) that are currently not covered by the scope of IPPC due to national interpretation. However, the number is assumed to be very limited, as currently biological processes are largely applies as part of large industries, as explained in part (b) above, and there are still only few independent installations.

2.2.Options regarding biological processes

• No additional legislative requirements in MS.

• Does not solve the unclear situation as regards the scope of the IPPC Directive on this issue
• Possible inconsistency of approaches between MS/regions, potentially leading to adverse impacts on the level playing field among producers across MS.
• Depending the interpretation of the MS, exclusion of processes, such as fermentation, which are increasingly used to replace conventional chemical processes from the scope of the IPPC.
• Remain unclear whether bioethanol would be covered under the IPPC Directive (see also Section 3.2)

• No additional legislative requirements at the Commission level.

• Based on current wording of the Directive, difficult for the Commission to develop some guidance
• Need to amend the national legislation in some MS
• Additional legislative requirements in some MS.
• The confusion is still likely to arise, as biological processes are explicitly mentioned in §4.5 and not elsewhere.
• The remaining degree of flexibility provided by a guidance-based approach could still allow different interpretations in MS.

• Harmonisation of the approaches between MS/regions, leading to level playing field among European producers (most MS already include these installations under the scope of the IPPC Directive).
• Reflects the current practice where biological processes already play an important role in certain chemical sectors
• Ensures a high level of environmental protection vis-à-vis a growing number of biological processes through BAT implementation.
• Biochemical processing is made comparable to the traditional chemical processing and can be more easily considered as BAT, for example.

• Need to amend the national legislation
• Additional legislative requirements in MS.

2.3.Analysis of options regarding biological processes