7. Chemical & Pharmaceutical
Industry Economics & Sustainability
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
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
links to the extraction and uses of the Earth's resources
- 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
% purity of a product 14.2a
% reaction yield 14.2b
- 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,
- 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 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
- 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
- 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
- Non-renewable resources like
biomass from plants via photosynthesis, are a good example of a
renewable chemical feedstock source.
any unreacted chemicals (see
Haber Synthesis of Ammonia),
recycling plastics or metals from used products all help to keep
production costs down.
- Labour (wages).
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.
- 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
- Speed of manufacture
efficiency) - rates of
reaction factors are very important here.
aspects to minimise the cost of production of any chemical product
- typical factors to consider. These cost factors can be analysed in more
- 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
- 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
- Automating the chemical plants
with sensors, controls, computer software etc. significantly
reduces the wages bill.
- Using an
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.
- 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
- and, because batch processing
doesn't involve a complex reactor system, the start-up capital
costs are lower.
- 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
- 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
- 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
blast furnace extraction of
Haber synthesis of ammonia,
- and the
acid by the Contact process
- Locating a chemical works:
Many factors need to be considered and adds to the complexity of the
economics of chemical production.
- 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
- BUT, are there any hazards in
transporting the chemical products? Large tanker vehicles on the
road are carrying very flammable liquids, corrosive or toxic
- All transport of dangerous
chemicals are governed by legally binding regulations, but look
out for hazard warning symbols on tankers, you should know them
- 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.
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.
- Availability of suitable
- 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.
- 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?
- More on Recycling - way of saving on
- 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
- 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
- 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
- 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%.
- Various ways of dealing with the
problem of waste plastics
is encouraging novel
ideas to recycle plastic/polymer materials.
- For specific metal recycling
- Case studies:
There are also other
pages you should also study ...
APPENDIX 1 LIFE CYCLE
ASSESSMENT OF A PRODUCT
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
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
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.
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
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
of the product and packaging it
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,
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.
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
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
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.
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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