7. Chemical & Pharmaceutical Industry Economics & Sustainability - Life Cycle of a Product

See also 8. Products of the Chemical & Pharmaceutical Industries & Impact on Us

and 9. The Principles & Practice of Chemical Production - Synthesising Molecules

7. to 9. are all connected as a survey of the chemical and pharmaceutical industries, lots of overlap I'm afraid

Doc Brown's KS4 Science GCSE/IGCSE O Level Industrial Chemistry Revision Notes


7. Chemical Economics and Issues involved in the Chemical Industry and the Life Cycle of a Product

What economic factors are involved in the manufacture of a chemical compound? Why are the costs to make one chemical compound greater than for another? What are the various cost factors? Are there environmental and pollution issues to deal with.? What is a batch process? What is a continuous process? Where is it best to locate a chemical works? Recycling - why recycle eg metals and plastics? All of these aspects of the chemical manufacturing and mining industries are discussed.

Index of sections: 1. Limestone, lime - uses, thermal decomposition of carbonates, hydroxides and nitrates  *  2. Enzymes and Biotechnology  *  3. Contact Process, the importance of sulphuric acid  *  4. How can metals be made more useful? (alloys of Al, Fe, steel etc.) * 5. The importance of titanium  *  6. Instrumental Methods of Chemical Analysis * 7. Chemical & Pharmaceutical Industry Economics & Sustainability * 8. Products of the Chemical & Pharmaceutical Industries & impact on us * 9. The Principles & Practice of Chemical Production - Synthesising Molecules  and other web pages of industrial chemistry notes: Ammonia synthesis/uses/fertilisers * Oil Products * Extraction of MetalsHalogens - sodium chloride Electrolysis * Transition Metals * Extra Electrochemistry


7. Chemical & Pharmaceutical Industry Economics & Sustainability

Using the Earth's Resources and Sustainable Development

The chemical industry uses the Earth’s natural resources to manufacture a huge range of useful products. In order for the chemical industry to operate sustainable, chemists look for ways to minimise the use of limited resources, energy consumption, waste products and the environmental impact in the manufacture of these products. Chemists for ways of disposing of products at the end of their useful life in ways that ensure that materials and stored energy are used efficiently. The effects of pollution, disposal of waste products and changing land all have a significant effect on the environment. Environmental chemists research how human activity has affected the Earth’s natural cycles, and how damaging effects can be minimised.

For centuries human societies use the Earth’s resources to provide warmth, shelter, food and transport, but the pressure has increased on using natural resources, as ever supplemented by agriculture to provide food, timber, clothing, fuels from oil and metals from mineral ores. Most resources from the Earth, oceans and atmosphere are finite, but are being continually processed to provide energy and materials. Chemistry plays an important role in improving agricultural and industrial processes to provide new products and in sustainable development. Sustainable development must meet the needs of current generations without compromising the ability of future generations to meet their own needs. Many natural products are being supplemented or replaced by agricultural and synthetic products, preferably from renewable resources rather than the increasingly depleted finite resources.

See links to the extraction and uses of the Earth's resources

  • Whatever the nature of the product from the chemical or pharmaceutical industry, it must be profitable, so the revenue income from product sales must be greater than the cost of making the product.

    • That's the simple rule of good business, but there are LOTS OF ECONOMIC FACTORS that are considered on this page.
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  • The greater the amount of starting materials (reactants) the greater amount of new substances (products) formed, but its never that simple!
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  • A high percentage yield of product to minimise waste from the starting raw materials or chemical feedstock. Often this is linked in with factor 1. in terms of reaction rate and conditions. A low percentage yield reaction e.g. if an equilibrium is formed, may be acceptable if the unused reactants can be efficiently recycled (see Haber Synthesis of Ammonia). However in the real world chemical processes are not 100% perfectly efficient!
    • The amount that you actually make is called the yield.
    • The percentage % yield = actual yield x 100 / predicted yield
    • The predicted yield assumes there is no loss of product, i.e. no waste, and the reaction goes 100% in the desired direction.
    • If no product is obtained then the yield is 0%!
    • In reality, yields can typically range from 5% to 95% for a variety of chemical processes.
      • The lower the yield, the less efficient is the manufacturing process.
    • The atom economy is another important consideration.
      • % atom economy = mass of useful product x 100 / total mass of products
        • The atom economy calculation shows how much of the mass of reactants (= products) is useful product and 100% - atom economy tells you how waste is formed.
        • The larger the atom economy the less waste is produced.
        • Reactions with a low atom economy deplete resources more quickly.
      • See Chemical Calculations section c) doc bclick me!6a. on reacting masses
      • AND calculations sections 14.1 % purity of a product 14.2a % reaction yield 14.2b atom economy
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  • Why aren't processes 100% efficient? Typical reasons are:
    • Loss in filtration of a solid product, i.e. some may get through as very fine particles or more likely dissolved in the liquid residue.
    • Loss in evaporation if the product is a volatile liquid.
    • Loss in transferring liquids, i.e. traces left on the sides of containers.
    • The reaction may be an equilibrium, so its impossible to get 100% yield anyway and this means that the yield of an equilibrium reaction depends on the conditions used.
    • See also calculations sections 14.1 % purity of a product 14.2a % reaction yield 14.2b atom economy
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  • The costs of making new substances depends on many factors and these days the idea of 'sustainable development' is really important and increasingly so!
    • Factors such as atom economy and % yield have already been discussed above.
    • Price and quantity of energy used (e.g. gas, electricity etc.).
      • Manufacturing processes should be designed to work on the minimum possible energy, it reduces costs and ultimately the impact of the manufacturing process on the environment e.g. less energy used, less carbon dioxide produced from burning fossil fuels, less pollution, better for the environment.
      • The unit cost of energy, the less energy you need, the cheaper the process.
      • Electrical energy is very expensive.
      • Endothermic reactions may need a high temperature, the higher the process temperature, the more energy is needed.
      • Sometimes exothermic reactions produce energy that can be 'captured' by heat exchangers and put to good use e.g. pre-heating reactants, making steam to drive an electrical generator.
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    • Starting materials (raw materials ==> chemical feedstock ==> reactants)
      • Raw materials have to be paid for before you have even made any product!
      • Is the source of raw materials sustainable?
        • If the source of raw materials or chemical feedstock is from a finite non-renewable resource e.g. oil or mineral ores, then these resources become depleted, more difficult to find or extract, since the best most convenient go first, so ultimately their cost increases, so cost of product increases.
        • Non-renewable resources like biomass from plants via photosynthesis, are a good example of a renewable chemical feedstock source.
      • Recycling any unreacted chemicals (see Haber Synthesis of Ammonia), or recycling plastics or metals from used products all help to keep production costs down.
    • Labour (wages). All workers should be paid a reasonable wage! Some processes are labour intensive, so wage bills rise. Many chemical processing plants are automated which keeps the running costs down by lowering the wage bill, though this does increase the capital cost of setting up the chemical plant in the first place because of the greater more advanced technology.
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    • Equipment (chemical plant e.g. machines, reactors, heat transfer systems), building a large chemical plant is a multi-million pound project, specialised catalysts and high quality chemical engineering equipment don't come cheaply!
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    • Speed of manufacture (time efficiency) - rates of reaction factors are very important here.
  • Other economic aspects to minimise the cost of production of any chemical product - typical factors to consider. These cost factors can be analysed in more detail e.g.

    • The cost of building a chemical plant can vary enormously. It might be just a simple reactor vessel like a steel tank and a few input and output valves. BUT it might be very complicated with many sections controlling the process and beds of a catalyst might be very expensive (though they can often be recycled and refabricated). High temperatures and higher pressures require higher specification engineering, again adding to the cost of building a chemical plant.
    • The higher the operating pressure of the reactor, the higher the cost. The engineering is more costly due to e.g. thicker steel reaction vessel, higher health and safety standards require.
    • The higher the temperature the higher the energy cost. Fortunately this cost is reduced if the reaction is exothermic and the reaction does go faster at higher temperature.
    • Time is money! so catalysts save time and money by speeding up the reaction.
    • The rate of reaction must be high enough to give a reasonable yield in reasonable time e.g. at least within 24 hours for a continuously working plant.
    • Often with equilibrium reactions, it is possible to recycle unreacted starting materials back through the reactor. The % yield must be high enough at least per day, but an initial low yield is quite acceptable if the unreacted starting materials can be recycled many times on a continuous basis through the reactor.
    • Optimum reaction conditions are geared to the lowest cost situation. This often means 'balancing' the rate of reaction versus the highest % yield. It is often best to get a low yield fast and recycle! Reaction conditions : Optimum conditions gives the lowest production costs. A good fast economic rate of reaction, too slow wastes time and time costs money. Catalysts help this factor, but they can be costly, so their cost must be outweighed by a faster, more economic rate of reaction. Quite often, particularly if an equilibrium is formed, you have to balance a reasonable rate of production (equate to reaction speed) versus the operating temperature of pressure, in other words you may need to compromise several operating conditions to actually get the most economic production rate (see Haber Synthesis of Ammonia).
    • Automating the chemical plants with sensors, controls, computer software etc. significantly reduces the wages bill.
    • Using an effective catalyst can reduce costs by increasing the rate of reaction (more efficient) and lowering the energy requirements if the process can be done at lower temperatures.
    • Dealing with waste products is costly, they take up space e.g. in landfill sites and can cause pollution. They must be disposed of responsibly, meaning safely and causing no environmental problems. If you can a use for the waste that has some value, this can help the economy of making the main product. Sometimes a reaction produces another useful chemical known as a by-product, which can be quite valuable and you might deliberately choose such a reaction because both products are valuable.
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  • Batch process versus a continuous processes for manufacturing chemical products
    • A batch process in chemical manufacturing is where the reactant chemicals (raw materials/feedstock) have to be mixed in a reactor vessel or furnace etc. When the reaction is completed as far as it will go, the product is then extracted.
      • One disadvantage of batch processing is that the reactor must then be cleaned out before it can be re-used to make the next 'batch' by re-filling the reaction vessel with more reactants,
        • and there are other disadvantages to batch processing e.g.
        • its not easy to keep the same quality control of the product from batch to batch,
        • and its labour intensive because the reactor and processing equipment having to be cleaned from batch to batch and possible 'manual control' during the production process itself.
      • It is generally less economic than continuous processes (see below). Typically salts, drugs, alcohol from fermentation, making specialised steel alloys etc. are examples of chemicals made by batch processes.
      • Pharmaceutical drugs are often manufactured by a complicated multi-stage synthesis and relatively low demand of production, therefore batch processing is the most cost-effective method even though batch processing itself is more costly than continuous processing.
      • But batch processing does have some advantages e.g.
        • if only small quantities of the product are needed, so its not worth the high cost of building a big production plant,
        • batch processing is flexible because you can make several different products with the same small-scale multi-purpose equipment e.g. a stainless steel reactor vessel,
        • and, because batch processing doesn't involve a complex reactor system, the start-up capital costs are lower.
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    • In a continuous process the reactants are continuously fed into the reactor vessel or reaction chamber and the products are continuously extracted and removed.
      • Continuous process chemical production plants are used to manufacture bulk chemicals efficiently e.g. the Contact process for making sulfuric acid, the manufacture of ammonia by the Haber synthesis, the blast furnace production of iron. In all these processes the raw materials are fed in and the products extracted in large quantities continuously for months and even years.
        • However, the start-up capital costs very high because of the cost of building a large chemical plant with the high quality chemical engineering needed for high pressures/temperatures, plus 'high tech' control systems and often a very costly series of catalyst beds built into the reactor chamber.
      • This is usually more economic than batch processing because production is continuous and automatically controlled, there is no stopping and starting situation and the chemical plant may run for 6-12 months before shutting down for essential maintenance or replenishing damaged catalysts etc.
      • Another advantage of continuous processing over batch processing is once the production plant is up and running under optimum conditions you consistently get best quality product, so quality control is maximised.
      • Another advantage of a continuous processes is that unreacted chemicals can often be separated from the product and recycled through the reactor, so ALL the chemical feedstock (the reactants) are eventually used up to form the desired product.
      • Examples are: the (c) doc b blast furnace extraction of iron,
      • the (c) doc b Haber synthesis of ammonia,
      • and the (c) doc b manufacturing sulphuric acid by the Contact process
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  • Locating a chemical works: Many factors need to be considered and adds to the complexity of the economics of chemical production.
    1. Good transport links to bring raw materials in and products out.
      • e.g. you need at least good road links and possibly rail or even water links e.g. if factory was located on an estuary for importing iron ore to a steel works.
      • BUT, are there any hazards in transporting the chemical products? Large tanker vehicles on the road are carrying very flammable liquids, corrosive or toxic liquids.
      • All transport of dangerous chemicals are governed by legally binding regulations, but look out for hazard warning symbols on tankers, you should know them all!
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    2. Environmental, and health and safety issues (risks?)
      • e.g. how does the factory impact on the local population from the point of increase in road traffic, dangers from chemicals and pollution from the chemical processes involved?
      • Chemical factories do tend to be unsightly and will always be potentially hazardous environments.
      • How might it affect the surrounding natural environment e.g. the flora (plants) and fauna (animals) of the locality if adjacent or close to 'green land'?
      • Is the land suitable and planning permission granted? e.g. the land well drained, stable, maybe a brown site of previously used land so as not to use protected 'green belt' land.
      • See Issues related to limestone quarrying as an example of problems caused by exploiting a mineral resource and open cast coal mines or iron ore mines are other examples of industry having a big impact on the local environment.
      • If the reaction produces harmful chemicals are they likely to harm the local environment?
      • There are strict regulation laws covering the operation of chemical plants to protect both the workers, the public and the environment, disposal of waste as well as transporting chemical products.
      • All chemical products have to be tested to see if they are safe to use, but if hazardous, instructions on safe use must be supplied.
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    3. Availability of suitable workforce (benefits)
      • Are there enough people locally to operate the works AND with the requisite skills?
      • Hopefully, yes, chemical factories and research laboratories provide skilled and unskilled jobs for the local community.
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    4. The availability of raw materials and energy requirements:
      • Are the raw materials available locally or are they readily imported in?
      • Can the energy demands of the factory and offices be met by the e.g. the electricity grid?
      • Is the supply of water sufficient for the chemical processes involved?
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  • More on Recycling - way of saving on costs
    • Recycling metals like aluminium and iron/steel saves on costs AND allows a mineral resource like iron ore to last a lot longer.
    • Recycling metals may use as little as 5% of the energy used to transport ore, extract the metal and process into a useful product either as the pure metal or alloy.
      • Therefore savings include, transport costs may be less, but more importantly
        • mining costs are omitted - mining, crushing all use energy and machinery, and the
        • cost of actually extracting the metal from its finite ore resource - eg the chemical and processing plants costs etc.
      • So, scrap metal merchants are doing a roaring trade at the moment.
      • The savings are partly reduced by the cost off collecting waste/scrap metal and purifying them for further use.
      • Quoted figures from the 1990s (and some for 2008) for the UK (Britain), all are probably increasing at the moment, but the data I have found at the moment - % of metal recycled in metal products was
        • Al aluminium 28% (39% in 2008), Cu copper 18% (32% in 2008), Fe iron 40% (42% in 2008), Pb lead 60%, tin 30%, zinc 30%
        • As you can see, for a country with little economic metal mineral ore deposits, the percentages are quite (and should be) high.
      • It should be pointed out in all fairness, the extraction of metal ores and their overseas sales is very important source of employment and revenue for an often poor developing country.
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    • Recycling of cars is an important economic strategy
      • Any materials that can be reclaimed from scrapped cars and any other road vehicles will save on diminishing natural resources, saves money and reduce waste that may just end up in landfill sites.
      • The steel car bodies can easily be recycled by adding scrap iron/steel to new batches of steel.
      • Aluminium components can be recycled too.
      • However it is not easy to recycle plastic and rubber materials from car fittings.
      • AND there is always one major problem in recycling - separating the useful from the non-useful, in fact, separating anything from a complex mixture of plastics, metals, glass etc.
      • BUT European laws are becoming stricter and insist that 85% materials used in car manufacture must be recyclable and by 2015, upto 95%.
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    • Various ways of dealing with the problem of waste plastics is encouraging novel ideas to recycle plastic/polymer materials.
  • Case studies:
  • There are also other pages you should also study ...



A broader view of the economics of manufacturing and using a product taking into account the source of raw materials and disposal of the product after its useful life

A life cycle assessment (LCA) considers every stage of the 'life of a product' starting with the raw material, making the product, using the product and finally disposing of the product as usefully and as harmlessly as possible. The idea is to look at the environmental impact at each stage, and all of the 'aspects' have economic consequences for us all.

Life cycle assessment (LCA) and recycling.

LCAs are carried out to assess the environmental impact of products in each of four stages: (i) extracting and processing raw materials, (2) manufacturing and packaging, (3) use and operation during its lifetime and finally (4)disposal of the product at the end of its useful life, including transport and distribution at each stage.

Energy, water, resource consumption and production of some wastes can be fairly easily quantified but allocating numerical values to pollutant effects is less straightforward and requires value judgements.

Therefore an LCA is not a purely objective process. LCAs can be devised to evaluate a product but these can be misused to reach pre-determined conclusions, eg in support of claims for advertising purposes. However many products can be recycled e.g. shopping bags made from plastic, paper, glass, metals etc.

You need to consider the advantages of recycling metals, including economic implications and how recycling can help preserve both the environment and the supply of valuable raw materials. These are important aspects of a life time assessment for a product that also involves consideration of the effect on the environment of obtaining the raw materials, manufacturing the product, using the product and disposing of the product when it is no longer useful.

Choice of material for the product - extraction and processing of raw materials

Air and water are raw materials used in many processes, both are renewable resources.

Metals are obtained by mining mineral ores and processing them to extract the metal, they are non-renewable resources and use a lot of energy to obtain the pure metal, which has polluting consequences.

Many chemicals are ultimately derived from the processing of crude oil and natural gas in the petrochemical industry. These are non-renewable resources and we use them at quite a rate, hence they are very much a finite resource and will not last forever. Both extracting the oil and gas and refining it e.g. fractional distillation, further processing like cracking, use lots of energy and so have pollution side-effects.

Manufacture of the product and packaging it

Manufacturing any chemical product inevitably uses energy as well as the raw material resources the chemical product is made from. Pollution arises from burning fossil fuels e.g. acid rain from the oxides of sulfur and nitrogen, other air pollutants like carbon monoxide and soot-carbon particulates. There is also the added problem of the safe disposal of waste products ..

.. some of which can be recycled at the point of manufacture, 'the synthesis', (especially for continuous production,

others maybe by-products which may be of value directly or converted to another useful product,

and some waste of no value at all and sometimes at great cost, safely disposed of without harm to the public or polluting the environment.

Use of the product through its lifetime

Will making and using the product damage the environment? Are ecosystems affected? Are we as humans affected by health issues by using the product? Using non-electric cars causes pollution from burning fossil fuels like petrol or diesel. Over-use of fertilisers leaching out into rivers and lakes causes eutrophication - deadly effects on aquatic ecosystems. Chemical pollutants can build up in food chains harming top predators like birds of prey (historically the now banned DDT, now PCB polymer plasticisers have entered the food chains). We use so many different chemicals that we don't always know whether they are completely safe in some cases, not everything is as thoroughly tested as much as they should, so there 'data gaps' in their potential effects, particularly if they can accumulate in the environment.

Disposal of product

Ideally as much as possible of the product is recycled e.g. scrap metal, plastics, paper, glass etc.

If nothing can be done with the rest, the 'waste' goes to the ever increasing volume of landfill sites which are polluting to the surrounding environment, or large incineration plants to burn combustible waste, but this can produce pollutants of its own!

We are always looking for ways of reducing the use of resources so the reduction in use, reuse and recycling of materials by end users reduces the use of limited resources, energy consumption, waste and environmental impacts.

Metals, glass, building materials e.g. bricks & stones, clay ceramics and most plastics are produced from limited raw materials and much of the energy used in the processes comes from limited resources e.g. oil.

Obtaining raw materials from the Earth by quarrying and mining causes major environmental impacts.

Some products, like glass bottles, can be reused e.g. glass bottles can be crushed and melted to make different glass products. Other products cannot be reused and so are recycled for a different use.

Metals can be recycled by melting and recasting or reforming into different products, though they must be first collected from where they were used and separated from other waste material.

The amount of separation required for recycling depends on the material and the properties required of the final product. For example, some scrap steel can be added to iron from a blast furnace to reduce the amount of iron that needs to be extracted from iron ore.

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