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3 Amec Foster Wheeler Environment & Infrastructure UK Limited Executive Summary Purpose of the report This independent report, commissioned by the Fluoropolymers Group (FPG) of Plastics Europe, identifies the contribution to European society and economy of a group of plastics known collectively as fluoropolymers. These include the well-known PTFE and many other polymers; they are not to be confused with fluorotelomers, which are out of the study scope. The study the first such study carried out by the Fluoropolymer industry in Europe evaluates the contribution made by the manufacture of fluoropolymers in terms of revenue, investment and employment. But much more significant benefits are generated along the value chain via the use of fluoropolymers in various critical applications which we use every day. In these, even though the fluoropolymer content may be tiny, they offer key attributes: non-wetting, high dielectric, non-stick, fire resistant, temperature resistant, weather resistant and with near universal resistance to chemicals. It is their specific combinations of properties that are not matched by any of the alternatives and which thus make them so valuable. This socio-economic analysis (SEA) draws on publicly available data, alongside a survey undertaken with members of the Fluoropolymers Group and interviews with a selection of downstream users. Key messages from the analysis are below also presented graphically. The fluoropolymer value chain sectors dependent on fluoropolymers Fluoropolymers provide vital performance characteristics to products or production processes. Collectively this creates socio-economic value far beyond the direct impact created by the industry itself. Whilst not all of these benefits can be quantified, the report analysed these in eight strategically important sectors: Transport: By providing durable and effective protection against heat, aggressive fluids and fuels, humidity, vibrations and compression, Fluoropolymers prolong the useful life of various components critical for performance, emission control and safety in both the automotive and aerospace industries. Looking specifically at cars, fluoropolymers contribute to safety, engine efficiency, weight reductions and emission control, thereby improving fuel efficiency and reducing leaks and fugitive emissions. Modern road transport emission standards could not have been achieved without these materials. Specifically, fluoropolymer use in fuel hoses alone enables fuel savings worth some 40m per year and lower emissions prevents health damage valued at a further 100m in Europe. Over the vehicle lifetime, this equates to fuel savings in Europe of some 200m. Chemical and power: Fluoropolymers enable a high level of efficiency and environmental safety in the chemical and power sectors, helping them remain internationally competitive. Uses include piping, vessels, fluid-handling components, filters, vents and cable coatings. Fluoropolymer coatings, linings and components prevent corrosion in demanding environments. Each percent reduction in corrosion is estimated to deliver savings of some 150m per year across Europe. Amongst other benefits, they support savings in maintenance through increased component lifetime. Consultation suggested their use effectively doubled the lifetime of equipment, potentially yielding savings in the order of 100m annually. Furthermore, they provide important contributions to applications that prevent or remove pollution; in Combined Heat and Power (CHP)1 installations alone, fluoropolymer heat exchanger technology contributes to energy savings worth up to 8bn and CO2 emission reductions worth around 0.5-3bn, across Europe, per year. Cookware: Fluoropolymer-coated cookware provides easy-clean, non-stick properties, saving time, water and energy. This facilitates cooking with less added fat contributing to a healthy diet. 1 A highly efficient process that captures and utilises the heat that is a by-product of the electricity generation process. May 2017 Doc Ref. 37575i4 No17083i4 4 Amec Foster Wheeler Environment & Infrastructure UK Limited Electronics: Fluoropolymers are critical to the semiconductor manufacturing process. Here various fluoropolymer components can stand up to the aggressive etching chemicals and provide the necessary purity required in the production of microchips and other electronics, where even trace contaminants can severely affect production yield. Annual benefits of fluoropolymers in semiconductor manufacturing are substantial - estimated in a 2006 study at some 10bn, per year. Semiconductors, in turn, are found in millions of products which are becoming ever more powerful, but compact. More generally, fluoropolymers enable improved fire safety, reliability and performance of cables, notably data transmission cables enabling a wide range of ICT2, industrial, automotive, medical imaging and analysis and a huge range of other applications. A combination of high dielectric properties, high heat resistance and fire resistance is necessary to produce acceptable products. Food and pharmaceuticals: Fluoropolymers enable durable processing equipment, ensuring high purity of food and pharmaceuticals as well as a high level of efficiency by preventing corrosion and facilitating cleaning. In the European biopharmaceutical manufacturing sector alone, 270m was saved in 2012 compared to 2008 from reductions in contamination and material failure. Such improvements can be attributed to a range of factors, but fluoropolymers play an important role in these efficiency gains. Textiles and architecture: In clothing and footwear fluoropolymers increase performance and comfort through combining waterproofing and breathability, in low weight but durable materials. They provide durable, fire-safe, easy-to-clean, building materials which can both reduce building cooling costs and energy use, whilst enabling novel landmark architectural designs not feasible with other materials. These include the O2 Dome (London), the Sony Centre (Berlin), Wimbledon Centre Court, the Allianz Arena (Munich), San Mams stadium (Bilbao) and the Eden Project in Cornwall, UK, all of which use fluoropolymers in the designs, for example woven PTFE fabric, fluoropolymer-coated glass fabric or extruded ETFE film. Medical applications: Fluoropolymers enable excellent performance and long lifetimes in medical equipment such as surgically-implantable medical devices, catheters, guide wires, filters and pumps. This reduces the risks of failure, replacements, cross-infections and clogging of medical equipment, contributing to the reduction/avoidance of medical complications and the associated pain and public cost. Renewable energy: Fluoropolymers exhibit a unique combination of properties within various components in renewable energy installations. We estimate that production efficiency increases of certain fluoropolymer-grade modules relative to glass provides a potential yearly saving depending on uptake in the order of 40m for European PV3 module manufacturers, or approximately 90m for PV module customers in the EU. Installed capacity of both PV and wind energy is increasing quickly; a pre-requisite is unit cost reductions driven by efficiency gains. They are also used in energy storage systems such as PEM fuel cells and lithium-ion batteries. The fluoropolymer industry direct effects The starting point of the value chain sales of fluoropolymers in their basic form is relatively small in comparison to the wider socio-economic benefits created by downstream fluoropolymer applications, described above. However, even the production and sale of fluoropolymers themselves creates significant direct socioeconomic effects in the EU. In 2015, around 52,000 tonnes of fluoropolymers worth around 780m were sold. By tonnage, the EU is a net importer of fluoropolymers, but the sales values of exports (380m) are around 18% higher than the sales value of imports (310m). EU fluoropolymer manufacturing is a highly innovative sector, with an estimated 43m invested in research and development (R&D) in 2015. This equates to 5.5% of turnover; around triple the EU average. 2 Information Communication Technology 3 Photovoltaics May 2017 Doc Ref. 37575i4 No17083i4 5 Amec Foster Wheeler Environment & Infrastructure UK Limited The location of the fluoropolymer industry in Europe plays an important role in allowing EU-based customers to meet lead times for the various end user sectors. This is necessary in maintaining innovation and R&D, as companies are continually customising products for their local customers. Alternatives? A high level analysis of alternatives has been carried out for all of the above sectors. Overall, whilst some alternatives might have a similar performance to fluoropolymers for a particular parameter or property, it is the combinations or ranges of properties required for the applications that sets fluoropolymers apart from the alternatives. In summary, whilst the implications of substituting fluoropolymers differ across specific applications, they include: Technical implications include lower performance, increased weight (with associated effects on fuel consumption and fuel efficiency), and reduced durability. This results in increased challenges (less compatibility and versatility) associated with component design/redesign and operating condition requirements. Economic implications include regression of advanced technologies and the reduced ability of Europe to compete and attract high and medium technology manufacturing investment (if it is not possible to prototype and produce competitive products), efficiency losses, higher initial (investment) costs and higher maintenance costs. The diversity of specific applications would pose major product qualification issues alongside design implications. Environmental / health implications include the potential for higher risk of exposure of staff to hazardous substances, higher safety risks (vehicle or aircraft failure) and increases in emissions arising from technical regression (in transport, for example this includes inferior car emission sensors, inferior internal seals, increased fugitive emissions or weight increases). This could put at risk Europes ability to meets its climate and energy goals. May 2017 Doc Ref. 37575i4 No17083i4 6 Amec Foster Wheeler Environment & Infrastructure UK Limited May 2017 Doc Ref. 37575i4 No17083i4 7 Amec Foster Wheeler Environment & Infrastructure UK Limited Contents 1. Introduction and Scope 9 1.1 Introduction and Purpose of this report 9 1.2 What are fluoropolymers? 9 1.3 Structure of this report 9 2. Fluoropolymers what do they do and how are they used? 11 3. The socio-economic contribution of the fluoropolymers industry 29 3.1 Introduction 29 3.2 Volume of use (Fluoropolymers in basic form) 29 3.3 Revenues (Fluoropolymers in basic form) 30 3.4 Research and development (R&D) and innovation 30 3.5 Direct employment (manufacturing of fluoropolymers in basic form) 31 3.6 Sales of fluoropolymers to downstream sectors 35 3.7 The fluoropolymer value chain 36 4. Downstream benefits of fluoropolymers 38 4.1 Introduction 38 4.2 Key Market 1: Transport 38 Enabling characteristics and socio-economic contr bution 38 Socio-economic value of the sector 40 4.3 Key market 2: Chemical and power 42 Enabling characteristics and socio-economic contr bution 42 Socio-economic value of the sector 44 4.4 Key Market 3: Cookware 45 Enabling characteristics and socio-economic contr bution 45 Socio-economic value of the sector 45 4.5 Key Market 4: Electronics 46 Enabling characteristics and socio-economic contr bution 46 Socio-economic value of the sector 47 4.6 Key Market 5: Food and pharmaceuticals 47 Enabling characteristics and socio-economic contr bution 47 Socio-economic value of the sector 49 4.7 Key Market 6: Textiles and architecture 49 Enabling characteristics and socio-economic contr bution 49 Socio-economic value of the sector 51 4.8 Key Market 7: Medical applications 52 Enabling characteristics and socio-economic contr bution 52 Socio-economic value of the sector 53 4.9 Key Market 8: Renewable energy 53 Enabling characteristics and socio-economic contr bution 53 Socio-economic value of the sector 54 5. Potential alternatives and implications of use 56 May 2017 Doc Ref. 37575i4 No17083i4 8 Amec Foster Wheeler Environment & Infrastructure UK Limited Table 2.1 Uses and benefits of fluoropolymers in the transportation sector 12 Table 2.2 Uses and benefits of fluoropolymers in the chemical and power sector 15 Table 2.3 Uses and benefits of fluoropolymers in cookware 17 Table 2.4 Uses and benefits of fluoropolymers in electronics 18 Table 2.5 Uses and benefits of fluoropolymers in food and pharmaceuticals 20 Table 2.6 Uses and benefits of fluoropolymers in textiles and architecture 22 Table 2.7 Uses and benefits of fluoropolymers in medical applications 25 Table 2.8 Uses and benefits of fluoropolymers in renewable energy 27 Table 3.1 Quantities of fluoropolymers sold in the EU per year (2015) 29 Table 3.2 Annual sales value of the EU fluoropolymer market (2015) 30 Table 3.3 Annual research and development expenditure related to fluoropolymers (2015) 31 Table 3.4 Total employment in surveyed companies and direct employment associated with EU fluoropolymer production (2015) 31 Table 3.5 Selected examples of fluoropolymer enabled innovations 32 Table 3.6 Downstream applications of fluoropolymers (tonnes and value, 2015) 35 Figure 3.1 Total quantity sold and total value per key market (2015) 36 Figure 3.2 Overview of the fluoropolymer value chain stages (key sectors) 37 Figure 4.1 Tightening of diesel and petrol vehicle emission limits for selected pollutants according to the Euro emissions standards (g/km) 39 Figure 4.2 Aerospace and defence sector turnover breakdown between 2009 and 2014 (bn) 41 Figure 4.3 Sales and employment in the space manufacturing industry (1992-2014) 41 Figure 4.4 Contribution to trade balance 45 Appendix A Appendix B Appendix C References Original survey data Potential alternatives May 2017 Doc Ref. 37575i4 No17083i4 9 Amec Foster Wheeler Environment & Infrastructure UK Limited 1. Introduction and Scope 1.1 Introduction and Purpose of this report In 2016, Amec Foster Wheeler Environment and Infrastructure UK was commissioned, on behalf of the Fluoropolymers Group (FPG) of Plastics Europe, to identify the socio-economic value of the group of plastics known collectively as fluoropolymers, to European society and economy. The socio-economic assessment (SEA) focuses on the economic benefits of the industry, in terms of revenues, employment and sales to downstream sectors. It also focuses on the downstream sectors in which fluoropolymers are used. This includes a huge variety of applications across Europe; it is not practicable to examine them all. As such, this study considers the use of fluoropolymers in eight strategically important sectors: transportation; applications in the chemical and power generation sectors; cookware; electronics; food and pharmaceuticals; textiles and architecture; medical applications; and renewable energy. In each, the various benefits that fluoropolymers deliver to both consumers and industry in terms of functionality within specific products are analysed, alongside an assessment of the importance of the sector itself to the European economy. The SEA draws on publicly available data, alongside a survey undertaken with members of the FPG. Further consultation was carried out with a selection of downstream users. The terms EU and European are used interchangeably throughout the report but they mean the same thing: the EU28. When discussing monetary values, m, bn and tn, refer to million, billion and trillion, respectively. 1.2 What are fluoropolymers? For the purposes of this study fluoropolymers are defined as follows. Polymers that have a carbon backbone and contain fluorine atoms directly attached to the carbon. Fluoropolymers are made by polymerisation of olefinic monomers at least one of which contains fluorine bound to one or both of the olefinic carbon atoms. This includes fluoroplastics4, fluoroelastomers5 fluororubber6 products. Examples of fluoropolymers are polytetrafluoroethylene (PTFE) including expanded PTFE (ePTFE), polyvinylidene fluoride (PVDF), copolymer of tetrafluoroethylene and ethylene (ETFE) elastomers and ethylene-chlorotrifluoroethylene (ECTFE), copolymer of tetrafluoroethylene and hexafluoropropylene (FEP), copolymer of tetrafluorothethylene and perfluoropropylvinylether (PFA). Fluorotelomers [CnF2n+1(CH2)mH] and fluorotelomer-based polymers are out of the SEA scope. Fluoropolymers form crucial parts of very many components, technologies, industrial processes and products with which we come into contact every day. They provide a wide variety of benefits both essential to high technology products and unobtainable in other materials, but are often invisible. They are plastics which are virtually chemically inert, non-wetting, non-stick, highly temperature and fire resistant, and highly weather resistant. It is this specific combination of properties that makes them so valuable. 1.3 Structure of this report Following section 1; this introduction: Section 2 provides a summary of how fluoropolymers are used in the eight key sectors and what benefits they confer which make them useful in so many applications. The remainder of the report focuses on these uses and sectors. Section 3 contains an analysis of the current socio-economic value of the fluoropolymer industry to Europe. This focuses on direct employment, revenues, research and development 4 A synonym of fluoropolymers 5 A special purpose fluorocarbon-based synthetic rubber 6 A synonym of fluoroelastomer May 2017 Doc Ref. 37575i4 No17083i4 10 Amec Foster Wheeler Environment & Infrastructure UK Limited (R&D) investment, product innovation and the volume and value of sales to the eight downstream sectors. Section 4 considers two things: Firstly, the benefits to European society or economy that the use of fluoropolymers delivers in the various applications of relevance to the study are illustrated. These benefits may include characteristics in the final products, efficiency improvements in industrial processes, or their use may enable a product or process that would otherwise not be possible. Secondly, given their widespread use across the key sectors, the socio-economic contribution and strategic significance of the eight key sectors themselves is demonstrated, in terms of economic output, employment or international trade. Section 5 evaluates the potential alternatives to fluoropolymers. This covers the key criteria that EU authorities consider when they assess substances, namely: their technical functionality and performance characterisers; their economic feasibility; their health and environmental profile; and whether they are likely to be available in sufficient quantities. Appendix A contains references, Appendix B provides further information on the treatment of survey data and Appendix C sets out additional details on potential alternatives in several applications. May 2017 Doc Ref. 37575i4 No17083i4 11 Amec Foster Wheeler Environment & Infrastructure UK Limited 2. Fluoropolymers what do they do and how are they used? Fluoropolymers bring a unique combination of properties and performance characteristics. They provide specific functionality in a wide range of processes, components and end products that is both essential to high technology products and unobtainable in other materials. So widespread is their use that it is a challenge to identify and evaluate the full extent of this and of the socio-economic benefits that they create. As such, this report has focussed on eight key sectors where the use of fluoropolymers is considered to be particularly important. Within each key sector, the specific uses (applications) of fluoropolymers and the benefits that they deliver are explained. In later sections of the report the most important applications are assessed further. These key sectors are: Transportation. Chemical and Power. Cookware. Electronics. Food and pharmaceuticals. Textiles and architecture. Medical applications. Renewable energy. In the tables below, for each key sector, we set out how fluoropolymers are used and evaluate the characteristics that make them so useful. In the text we refer to specific examples of fluoropolymer such as PTFE, PVDF. Please refer to the definition provided above in section 1.2. The order of the key sectors is consistent throughout the report and ordered based on the sales volume of fluoropolymers in basic form (i.e. the first stage in the value chain) from the largest to the smallest. May 2017 Doc Ref. 37575i4 No17083i4 24 Amec Foster Wheeler Environment & Infrastructure UK Limited [3] http://www.gooutdoors.co.uk/expert-advice/guide-to-waterproofing[4] http://www.polyfluor.nl/en/products/finished-products/ptfe-slide-bearing-sheets-skidway-systems/ [5] http://www.paint.org/article/fluoropolymer-coatings-for-architectural-applications/ [6] http://www.agc.com/english/csr/env/products/14.html [7] http://www.agcce.com/lumiflon/ [8] Ebnesajjad, S., 2013. Introduction to fluoropolymers: Materials, technology and applications. PDL Handbook series. Elsevier. [9] https://spinoff.nasa.gov/Spinoff2009/ip 2.html [10] http://www.tensinet.com/database/viewProject/4127.html [11] http://www.agc.com/english/products/jirei arena.html [12] http://www.arkema.com/en/products/markets-overview/construction/ [13] DuPont Fluoropolymers, An Introduction to Fluoropolymers, May 2009 (Page 37) [14] http://www.roofingcontractor.com/articles/90791-superdome-super-roof-iconic-mercedes-benz-superdome-in-new-orleans-sports-its-brightest-look-yet [15] http://solutions.3m.com/wps/portal/3M/en EU/Dyneon EU/Dyneon Fluoropolymers/NewsandEvents/News/?PC Z7 RJH9U52308GOF0IP00C05E2C31000000 [16] http://www.agc.com/english/news/2014/0127e 1.pdf [17] http://www.vector-foiltec.com/projects/baku-olympic-stadium-2015/ [18] http://dunn-lwa.com/portfolio/cuauhtemoc-stadium-etfe [19] https://www.nasa.gov/offices/oct/home/tech life birdair.html#.V45sl nhDcs [20] https://www.gore.com/products/gore-r-cover-for-organic-waste-treatment [21] https://www.gore.com/products/categories/fibers [22] http://www.designbuild-network.com/projects/wimbeldon-roof/ [23] http://www.paint.org/article/fluoropolymer-coatings-for-architectural-applications/ assetId=1361822532135 May 2017 Doc Ref. 37575i4 No17083i4 26 Amec Foster Wheeler Environment & Infrastructure UK Limited [4] Ebnesajjad, S., 2013. Introduction to fluoropolymers: Materials, technology and applications. PDL Handbook series. Elsevier [5] https://www.goremedical.com/na/products?locale=mpd_na [6] http://www.goremedical.com/products/vg?locale=mpd na [7] https://www.membrane-solutions.com/ptfe venting medical.htm [8] https://www.gore.com/products/gore-microfiltration-media-for-medical-devices [9] https://www.goremedical.com/products/acusealvg---featured-downloads?locale=mpd euro [10] http://www.goremedical.com/assets/AH1341-EN4/AH1341-EN4.pdf [11] http://www.adtech.co.uk/products/fluoroplastic-tubing-and-rod/ptfe-tubing.php [12] http://www.surgical-instruments-usa.info/images/content/en/doc132 rev d-sterilcontainer system.pdf [13] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4396056/ [14] http://www.teleflex.com/en/usa/productAreas/surgical/documents/Teleflex%20Catalog%20Lo%20Res.pdf [15] https://www.bostonscientific.com/content/dam/bostonscientific/uro-wh/portfolio-group/stone-management/Products-for-Ureteroscopy-Brochure.pdf [16] Modjarrad K. & Ebnesajjad S., 2013. Handbook of Polymer Applications in Medicine and Medical Devices. PDL Handbook series. Elsevier May 2017 Doc Ref. 37575i4 No17083i4 37 Amec Foster Wheeler Environment & Infrastructure UK Limited Figure 3.2 Overview of the fluoropolymer value chain stages (key sectors) Source: Based on downstream applications provided in Amec Foster Wheeler Survey 2016 and in Section 2. May 2017 Doc Ref. 37575i4 No17083i4 38 Amec Foster Wheeler Environment & Infrastructure UK Limited 4. Downstream benefits of fluoropolymers 4.1 Introduction The previous section evaluated the direct economic and social impact of the industry to Europe today. But a much larger socio-economic value is created via the characteristics of the products made by the industry that are used by downstream users, their enabling characteristics. For each of the eight key sectors, this section evaluates three things: Firstly, the specific enabling characteristics that fluoropolymers deliver are illustrated. This benefit is quantified where possible, described qualitatively where not. The evidence in the section is drawn from industry questionnaires and downstream user feedback alongside desktop research. These enabling characteristics includes those with direct economic effects, such as contributions to efficiency, but also sustainability, including emission savings. Secondly, by evaluating the socio-economic importance of the wider sectors where fluoropolymers are widely used, we place these benefits in wider context. So not only do fluoropolymers deliver important benefits, the sectors themselves are strategically important to European economy and society. We do not claim this economic activity is reliant on or derived from fluoropolymers, but they serve important strategic functions with the sectors concerned, through the various benefits that they deliver. Later in the report, we discuss a hypothetical situation where fluoropolymers were unavailable; this serves to illustrate the scale of economic activity that might be affected under such a scenario. Thirdly, in several instances fluoropolymers make a contribution to wider sustainability, through for example supporting weight reductions, avoiding emissions and/or leaks and carbon emission reductions. These are also drawn out. 4.2 Key Market 1: Transport Enabling characteristics and socio-economic contribution Fluoropolymers enhance reliability, safety and communication in aircraft. They help, alongside other advanced materials, to deliver performance under challenging environmental conditions. This includes safety critical components such as in seals, hoses and tubing as well as various electronic data and communication equipment. In automotive applications fluoropolymers prolong the useful life of various components critical for performance, emission control and safety by providing durable and effective protection against heat, aggressive fuels, humidity, vibrations and compression. This contributes to increased reliability and durability of car parts, and hence to a reduction in both the cost and extent of maintenance and breakdowns. For instance, a 2006 study29 estimated the use of fluoropolymers in high temperature wire insulation and fuel hoses saves 180m (ca. 200m in 2015 prices30) over the full lifetime of cars in Europe. The same study31 estimated that fluoropolymer use in fuel hoses enables fuel savings worth 35.9m (ca. 40.7m in 2015 prices32) annually in Europe. The study also indicated 29 NERA Economic Consulting (2006): Societal Benefits of Fluoropolymers and Fluorotelomers. Quoted in: http://www2.dupont.com/PFOA2/en US/assets/downloads/societal benefits.pdf. Note that the source does not specify how exactly Fluoropolymers generate these benefits. 30 Conversion to 2015 prices based on seasonally and calendar adjusted GDP deflator for the EU-28 from Eurostat: http://ec.europa.eu/eurostat/web/products-datasets/-/teina110. 31 NERA Economic Consulting (2006): Societal Benefits of Fluoropolymers and Fluorotelomers. Quoted in: http://www2.dupont.com/PFOA2/en US/assets/downloads/societal benefits.pdf. 32 Conversion to 2015 prices based on seasonally and calendar adjusted GDP deflator for the EU-28 from Eurostat: http://ec.europa.eu/eurostat/web/products-datasets/-/teina110. May 2017 Doc Ref. 37575i4 No17083i4 40 Amec Foster Wheeler Environment & Infrastructure UK Limited Socio-economic value of the sector Car manufacturing / automotive components Beyond emission reductions, Fluoropolymers make important contribution to the performance and functionality of automotive vehicles. This includes various fuel line applications, use of on board computers, high temperature CO2 sensors. This in turn aids global competitiveness and supports the significant economic activity of the sector in Europe in terms of car design, innovation, manufacture and export. Moreover, the role of fluoropolymers is likely to gain in importance in the future. Electric vehicles are enabled by high performance insulators, fluoropolymers in lithium batteries and hydrogen fuel cells. Similarly developments in automatic piloting are reliant on high speed data processing and data communication. The automotive sector as a whole accounts for 6.5% of the EU GDP (some 955bn41). The industry as a whole directly employed some 12.2 million people across Europe (about 6% of the EU workforce). Of these, 2.3 million are high-skilled jobs. Indirectly, the global automotive trade association OICA estimate that for every 1 direct job some 5 further jobs are sustained indirectly along automotive value chains42. Similar results come from a 2012 study in the UK which identified some 3.5 additional jobs created from every one full time job at Nissan and Jaguar Land Rover manufacturing facilities43. According to ACEA44, there are currently about 296 automobile assembly and production plants in the EU28, located across 26 countries and manufacturing more than 18 million cars, vans, trucks and buses every year. Some 16 million passenger cars and a total of 18 million motor vehicles were manufactured in Europe in 2015 alone (20% and 22% of global production respectively), contributing to a trade surplus of more than 100bn every year. The automobile sector also contributes to a significant share of R&D activities in the EU28: R&D expenses for automobile sector amount to some 45bn, about 26% of total EU expenses. In 2015 about 6,000 patents were granted to firms in the EU automotive sector. Tax revenues from vehicles in 14 European countries only alone were some 400bn. Global production is expected to exceed 100 million vehicles of all types by 201745. Aircraft and aerospace industry Fluoropolymers are used in various components in aircraft. They enhance reliability, safety, communication and performance under challenging environmental conditions. This includes safety critical components such as in hydraulic seals, hoses and tubing as well as various electronic communication equipment. Aircraft manufacturing is a genuinely global and highly competitive - sector with a small, but increasing number of advanced manufacturers. Improvements, even small increments in the functionality of aircraft can result in major operational savings, alongside improved safety. The use of fluoropolymers aids global competitiveness and supports developments in aircraft design, innovation, manufacture and export. They also help to deliver operational savings, once the aircraft is in use. Europe is a major player in the aviation manufacturing market. 2013 Eurostat data46, report some 4,100 companies involved47. These companies registered a turnover of some 129bn and employed some 438,000 people. Highly skilled; GVA per employee is around 94,000 per year, substantially above the EU average (54,000 per year). More than 100,000 people are employed in each of the UK and France, with some 95,000 in Germany. Turnover in these three countries represents about 80% of the total EU turnover of this sector (around 104bn out of 129bn). 41 According to the European trade association ACEA Estimate based on the indicative share provided by ACEA (6.5%) and on 2015 GDP figure for the EU 28 reported by Eurostat of about 14,700bn(rounded figure) [Eurostat, GDP and main components (output, expenditure and income), Last update: 14-10-2016. Available from: http://ec.europa.eu/eurostat/data/database] 42 http://www.oica.net/category/economic-contr butions/auto-jobs/ 43 http://www.economicmodelling.co.uk/2012/05/17/the-impact-of-car-manufacturing-employment/ 44 http://www.acea.be/automobile-industry/facts-about-the-industry 45 http://www.eulerhermes.com/mediacenter/Lists/mediacenter-documents/Economic-Outlook-The-global-Automotive-marketSept14.pdf 46 Annual detailed enterprise statistics for industry (NACE Rev. 2, B-E) [sbs_na_ind_r2] 47 The definition is activities relating to the manufacturing and maintenance of aircraft and spacecraft. May 2017 Doc Ref. 37575i4 No17083i4 41 Amec Foster Wheeler Environment & Infrastructure UK Limited The sector is a major source of global exports, some 118bn in 201448. Of this, some 46bn of sales value originated in France, where the headquarters of the largest European civil and military aircraft manufacturing firm EADS (Airbus) are located. Germany follows with 38bn and the UK is third with 14bn of sales49. There are several specialised and highly skilled civil and military aerospace activities in specific Member States. These include fuselage design and assembly/testing (France and Germany)50; wing design and manufacturing (United Kingdom and Spain51); engine manufacturing, landing gear, fuel systems and helicopters (United Kingdom)52; carbon fibre reinforced plastic (CFRP) components, internal data and power supply systems (Germany). Some key trends are below: Turnover in aerospace and defence (including space) overall amounted to just under 200bn in 2014, of which some 140bn related to aeronautics and around 12bn related to space. In terms of the specialist spacecraft manufacturing sector, over 40,000 people were directly employed in the sector as of 2014, which registered over 7bn of final sales. Both sales and employment have been steadily increasing over the preceding decade, from just over 4bn and 30,000 employees. Figure 4.2 Aerospace and defence sector turnover breakdown between 2009 and 2014 (bn) Figure 4.3 Sales and employment in the space manufacturing industry (1992-2014) Source: reproduced from ASD (2014) Aerospace and Defence Industries, Association of Europe (figures excludes land and naval revenues 53. 48 ECB exchange rate for 2014 $/ 0.80612, as used in previous sections (Aircraft and Spacecraft) 49 http://www.worldsrichestcountries.com/top-aircraft-spacecraft-exporters-2013.html sourcing data from Trade Map, International Trade Centre, www.intracen.org/marketanalysis 50 http://www.airbus.com/company/worldwide-presence/airbus-in-germany/ 51 http://www.airbus.com/company/worldwide-presence/airbus-in-spain/ http://www.airbus.com/company/worldwide-presence/airbus-in-france/ 52 https://www.gov.uk/government/uploads/system/uploads/attachment data/file/31807/12-954-reach-skies-strategic-vision-ukaerospace.pdf 53 Available from: http://www.asd-europe.org/communication/publications/facts-figures/ May 2017 Doc Ref. 37575i4 No17083i4 42 Amec Foster Wheeler Environment & Infrastructure UK Limited 4.3 Key Market 2: Chemical and power Enabling characteristics and socio-economic contribution Fluoropolymers and their unique set of properties enable a high level of efficiency and environmental safety in the chemical and power sectors: Fluoropolymer coatings, linings and components prevent corrosion in chemical manufacturing and power installations. This increases the lifetime of components reduces maintenance costs, waste, consumption of materials to renew corroded components and hence total life cycle costs. Considering each in turn: Corrosion is a significant cost factor in this sector. A 2002 study54 estimated that the direct cost of metallic corrosion in the United States to the chemical, petrochemical and pharmaceutical industries as $1.7bn annually (0.5% of the gross value added of these sectors in the same year) and the direct cost of metallic corrosion to electricity generating plants as $6.9bn (3.8% of the gross value added (GVA) of the utilities sector in the same year)55. Applying this shares of to the GVA of the same sectors in the EU28 in 201356, this would imply total costs of corrosion of about 15bn for the chemical and power sectors. Simply making a highly conservative assumption in the absence of specific data - that fluoropolymer uses reduce this by just 1% - suggests savings of around 150m per year. Fluoropolymers also prolong the lifetime of plant and equipment. Maintenance costs in the chemicals industry are typically around 5% of fixed capital costs57. Yearly capital spending in the EU chemical industry has been around 20bn per year over the last 20 years58. Hence, current maintenance costs are estimated in the region of 1bn. A chemicals manufacturer consulted as part of the study stated that the use of fluoropolymers in their equipment has increased the lifetime by more than a factor of 2. This suggests that which the installation would have to undergo maintenance significantly less often, up to half as often, saving up to half the maintenance costs. In the absence of specific data, assuming conservatively that about 10% of the European chemical industry use this fluoropolymer application and have managed to achieve savings on this scale suggests total savings to the sector as a whole could be in the order of up to 100m annually59. Facing increasing competition, especially from companies in Asia with comparatively low energy and labour costs, it is especially important for the European chemicals industry to maintain efficiencies to remain competitive60. Fluoropolymers also provide health, safety and environmental benefits. Durable and reliable fluoropolymer components prevent leaks and facilitate cleaning (via non-stick properties), which 54 Gerhardus H. Koch, Michiel P.H. Brongers, Neil G. Thompson, Y. Paul Virmani, J.H. Payer: Corrosion Costs and Preventive Strategies in the United States (2002). https://www.nace.org/uploadedFiles/Publications/ccsupp.pdf 55 USA gross value added 2002: Petroleum and coal products: $51,176m; Manufacture of chemicals and chemical products: $207,080m; Plastics and rubber products: $63,490m; Utilities: $180,137m. Source: US Department of Commerce, Bureau of Economic Analysis (http://www.bea.gov/industry/gdpbyind data.htm). 56 EU gross value added 2013: Manufacture of coke and refined petroleum products: 24,322m; Manufacture of chemicals and chemical products: 126,236; Manufacture of rubber and plastic products: 88,611m; Utilities (sum of NACE Codes D and E): 360,456m. Source: Eurostat: National Accounts aggregates by industry (up to NACE A*64) [nama_10_a64]. 57 See for instance: Harry Silla: Chemical Process Engineering: Design And Economics. Page 38. CRC Press, 8 Aug 2003. KLM Technology Group: General Process Plant Cost Estimating (Engineering Design Guideline). Page 24. June 2014. http://kolmetz.com/pdf/EDG/ENGINEERING DESIGN GUILDLINE General Plant Cost Estimating Rev01web.pdf 58 CEFIC: http://fr.zone-secure.net/13451/186036/?startPage=3#page=44 59 Under the assumptions outlined above, maintenance cost of 10% of the European chemical industry are estimated as 100m (10% of 1bn). Without fluoropolymer use, these could be twice as high, so 200m. The savings are equal to the difference between the actual costs (100m) and the counterfactual cost without fluoropolymer use (200m). Alternatively, if it is assumed that all of the European chemical industry uses fluoropolymers but achieve savings of just 10% of maintenance costs (assumed in the absence of any specific data), this leads to the same approximate figure. Clearly each plant has differing requirements but this serves to illustrate in broad terms the tang ble benefits delivered. 60 CEFIC: http://www.cefic.org/Documents/About-Us/Short-Introduction-To-the-European-Chemical-Industry-2014.pdf May 2017 Doc Ref. 37575i4 No17083i4 45 Amec Foster Wheeler Environment & Infrastructure UK Limited Figure 4.4 Contribution to trade balance Extra-EU trade balance. Source: reproduced from CEFIC, 201666 Power sector This section covers extraction, production and distribution of energy (renewables are covered separately below). According to the JRC67, the energy sector currently employs about 1.6 million people in the EU. It generates on average some 250bn value added every year. As of 2013, there were some 101,000 companies in the EU operating in the energy sector with a turnover of about 2.6 trillion (tr)68; an economic activity supported by fluoropolymer-enabled efficiency gains. 4.4 Key Market 3: Cookware Enabling characteristics and socio-economic contribution Fluoropolymer-coated cookware provides non-stick properties. This is convenient for cooking and cleaning, saving time, water and energy in the process. This also facilities cooking with less fat added for lubrication, which can contribute to a healthy diet. For instance, it has been estimated that poor diet cost the UK public health system (National Health Service) 5.7bn in 2006-200769 (about 9.7bn in 2015 prices70). Socio-economic value of the sector Some 20 companies in the EU are involved in the manufacturing or distribution of PTFE coatings for use in the manufacturing of cookware, among others71. While there are no publicly available EU-wide statistics for 66 Available from: http://www.cefic.org/Facts-and-Figures/ 67 Joint Research Centre; the European Commission's science and knowledge service https://ec.europa.eu/jrc/en/research-topic/energysector-economic-analysis 68 (EUROSTAT 2015) 69 Scarborough, P., Bhatnagar, P., Wickramasinghe, K. K., Allender, S., Foster, C., & Rayner, M. (2011). The economic burden of ill health due to diet, physical inactivity, smoking, alcohol and obesity in the UK: an update to 200607 NHS costs. Journal of Public Health, 33(4), 527-535. http://jpubhealth.oxfordjournals.org/content/33/4/527.full.pdf+html. 70 Inflation based the Bank of England inflation calculator (http://www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/flash/default.aspx). Conversion to Euros based on 2015 yearly average exchange rate from the European Central Bank (https://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html). 71 Source http://www.europages.co.uk/companies/ptfe%20coating.html May 2017 Doc Ref. 37575i4 No17083i4 46 Amec Foster Wheeler Environment & Infrastructure UK Limited the sector, these are likely to represent only a small fraction of the total number of companies involved. These companies operate within a larger sector producing tableware and kitchenware from plastics, which had a production value above 2bn as of 2012, and a net export value of some 470m in the same year72. As above, fluoropolymers provide important functionality, valued by consumers, that helps ensure European products are globally competitive. 4.5 Key Market 4: Electronics Enabling characteristics and socio-economic contribution Fluoropolymers are critical to semiconductor manufacturing. Fluoropolymers play a major role by supplying various piping, vessels, valves, pumps that can withstand the aggressive etching chemicals, alongside the required high purity in the manufacturing process of semiconductors. Semiconductors are extremely intolerant of particulate and chemical contamination, which, even in trace amounts, can cause severe decrease in yields.73 Consultation has indicated that semiconductor manufacturing would be seriously affected without the use of fluoropolymers in their production. Semiconductors, in turn, form part of millions of larger components from electronic equipment, communication devices to cars and aircraft. A 2006 study74 funded by DuPont, estimated that fluoropolymer use in the semiconductor industry results in annual benefits to European semiconductor makers of 10bn (11bn in 2015 prices75). This does not include benefits of using semiconductors further downstream in the value chain. Indirectly, fluoropolymers have played an important role76 in achieving the doubling of computer power every two years at the same cost - the so called Moores law. This is driven by increases the number of transistors per square inch in a microchip. It is evident in increased processing speeds and greater computing power in physically smaller components77. Consultation with fluoropolymer producers and downstream users, indicate that Moores law and the resulting technological developments would not have been possible without fluoropolymers. Between 1995 and 2015, the innovation in microchips as described by Moores law has generated an estimated $3tr (about 2.7tr) of additional value to global GDP. Including the indirect economic effects of this innovation, the estimate increases to $11tr (about 9.9tr).78 There are a host of other sectors which indirectly rely on the functionality provided by these electronic components. Fluoropolymers enable improved fire safety, reliability and performance of cables, notably data transmission cables. These cables are used in crucial applications in a wide range of sectors, especially where reliability in aggressive environments is key. Examples include various automotive cables, controls for a majority of (often safety critical) operations and sensors in industrial installations as well as high volume data transmission in Information Communication Technology (ICT). Fluoropolymer cables maintain constant operation for at least 20,000h at temperature ranges from between -190 C and +260 C (depending on which fluoropolymer). Downstream consultation has indicated that known alternatives for most 72 Data on import and export of plastics kitchenware and tableware available from Prodcom: http://ec.europa.eu/eurostat/web/prodcom/data/database 73 Ebnesajjad, S. (2014). Fluoroplastics, Volume 1: Non-Melt Process ble Fluoropolymers-The Definitive User's Guide and Data Book. Elsevier. 74 NERA Economic Consulting (2006): Societal Benefits of Fluoropolymers and Fluorotelomers. Quoted in: http://www2.dupont.com/PFOA2/en_US/assets/downloads/societal_benefits.pdf. Note that the source does not specify how exactly Fluoropolymers generate these benefits. 75 Conversion to 2015 prices based on seasonally and calendar adjusted GDP deflator for the EU-28 from Eurostat: http://ec.europa.eu/eurostat/web/products-datasets/-/teina110. 76 Ebnesajjad, S. (2015). Fluoroplastics, Volume 2: Melt Processible Fluoropolymers-The Definitive User's Guide and Data Book. William Andrew. 77 A useful overview of Moores law, along with supporting data illustrating the exponential increase in transistors per chip is provided in the economist: http://www.economist.com/technology-quarterly/2016-03-12/after-moores-law 78 Dale Ford, IHS Technology Thought Leadership: Celebrating the 50th Anniversary of Moores Law. https://technology.ihs.com/api/binary/532884 Conversion to Euros based on 2015 yearly average exchange rate from the European Central Bank (https://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html). May 2017 Doc Ref. 37575i4 No17083i4 47 Amec Foster Wheeler Environment & Infrastructure UK Limited applications last less than a third of the time under these conditions and do not meet the requirements for all higher frequency applications. The enabling characteristics of fluoropolymers support the ever increasing wireless antenna requirements with high signal quality with low signal losses including for Wi-Fi, 3G, 4G and Bluetooth, this includes in cars and aircraft as well as consumer goods. Socio-economic value of the sector Semiconductors Semiconductors are used in millions of components in power devices, optical sensor and light emitters in industrial operations, consumer electronics and healthcare applications. These include PCs (personal computers, laptops, servers and tablets) and communications (broadband internet, mobile phones, smartphones, etc.) and other consumer electronics appliances (television sets, music players, gaming consoles, household appliances and fitness gadgets) as well as various medical devices (discussed separately). Europe accounted for 11% of global demand in 2013 in terms of manufacturing location of the semiconductor itself, but they are used in millions of other applications throughout Europe79. Other data from the same year suggests the EU accounts for 24.7bn, equivalent to 9% of the global sales revenue (274.3bn).80 The global semiconductor market has grown quickly, by an average of 7% between 1993 and 201381. It is predicted that it will continue to grow to approximately 344.7bn in 201882. Semiconductors contribute to improved energy efficiency and performance83 and are present in virtually all modern electronic devices84. Ranked as the most R&D intensive sector by the European Commission, the European semiconductor market supports some 200,000 jobs directly and up to 1,000,000 indirect jobs in related activities in Europe85. 4.6 Key Market 5: Food and pharmaceuticals Enabling characteristics and socio-economic contribution Fluoropolymers enable durable processing equipment to ensure high purity of food and pharmaceuticals, even when ultra-pure substances, extreme temperatures and/or aggressive substances are required. In pharmaceuticals, high purity is vital for the effectiveness and safety of (often lifesaving) drugs. In food, it ensures safety and avoids contamination. For both sectors, fluoropolymers play an important role in production efficiency. In the European biopharmaceutical industry alone, 270m was saved between 2008 and 2012 alone due to increased prevention of contamination and material failure in biopharmaceutical manufacturing (see Box 4.2 below). The biopharmaceutical industry accounted for just 5% of the food and pharmaceutical manufacturing in 201286, so savings across the sector could be much larger. Such improvements can be attributed to a range of factors, but fluoropolymers play an important role in the prevention of contamination and material failure and hence to these efficiency gains. 79 SIA (2014) The US Semiconductor industry, 2014 Factbook 80 SIA (2014) The US Semiconductor industry, 2014 Factbook. Sales in the EU semiconductor market amounted to 2.4bn per month (data for July 2016 - about 10% of the global sales in the same month valued at 23.5bn source: http://www.eusemiconductors.eu/images/static website/newsroom/PR/ESIA WSTS PR 1607.pdf). 81 SIA (2014) The US Semiconductor industry, 2014 Factbook (http://www.semiconductors.org/clientuploads/Industry%20Statistics/2014%20Factbook%202.0%20-%2002032015.pdf) 82 http://www.idc.com/getdoc.jsp?containerId=246668 83 http://www.eusemiconductors.eu/esia/home 84 http://uk.rs-online.com/web/generalDisplay.html?file=eletronics/how-did-semiconductors-change-our-lives&id=infozone 85 http://www.eusemiconductors.eu/esia/about-esia 86 Based on Eurostat: National Accounts aggregates by industry (up to NACE A*64); and Eric Langer, BioPlan Associates, Inc (2013): Biomanufacturing Shows Signs of Maturity. In: Pharmaceutical Manufacturing: Biopharmaceutical Manufacturing Trends 2013. http://www.pharmamanufacturing.com/assets/wp downloads/pdf/PM 1307 Biopharm eBook final.pdf May 2017 Doc Ref. 37575i4 No17083i4 49 Amec Foster Wheeler Environment & Infrastructure UK Limited Socio-economic value of the sector Food and beverage Fluoropolymers play an important role in food safety and cost-efficiency of food and beverage manufacturing. This sector, in turn, plays an important role in the European economy. As with other sectors, efficiency is important in global competitiveness, keeping costs to consumers low. Avoiding contamination in production is essential. FoodDrinkEurope estimated that the sector accounted for 15% of turnover and some 13% added value of the manufacturing industry in 2012. Around 289,000 companies were involved, employing some 4.2 million people and generating turnover of 1.2tr as of 201389. By Member State, the largest turnover in the food production sectors were registered in Germany (173bn), France (155bn) and Italy (111bn) respectively90. A large number of companies in the sector are small and medium enterprises (SMEs) some 286,000 accounting for 99% of all companies, half of turnover and two thirds of employment. Annual R&D expenditure is around 2.8bn91. The EU is a major exporter of food: 21% of global food exports are from within the EU, with a sales value of almost 92bn in 2014. (Food Drink Europe, 2016). Pharmaceutical industry The EU pharmaceutical market is a key player globally accounting for almost 27% of the global market in 2011. The EU market for production of pharmaceuticals was valued at 213bn for 2012, generating a trade balance of some 87.6bn92. In 2012, R&D expenditure in the sector amounted to 30bn. More than 690,000 people were employed in the European pharmaceutical sector, of which some 115,000 were employed in R&D activities. Public expenditure on pharmaceuticals (for ambulatory care) amounted to some 193bn. (EFPIA 201493). According to EFPIA (2014 figures based on Eurostat data), the pharmaceutical industry has amongst the highest added-value per employee, with GVA per employee in 2012 at 140,00094 significantly higher the EU average (around 54,000) (WIFOR, 2015). In 2012 Germany was the largest employment location in Europe with some 110,000 people employed in the sector, followed by France (96,000) and the UK (73,000), whilst the highest sales values were in France (27bn) and Germany (26bn) followed by Italy (20bn). The market tends to be dominated by a few multinational enterprises, with the 20 largest pharmaceutical firms accounting for 66% of the global market by sales revenue in 2012 (Blanc, 2014). These large companies play a leading role - 50% of the new molecules introduced since 1950 were developed by the top 15 pharmaceutical firms (Munos, 2009, quoted by Blanc, 2014). Of the 20 largest pharmaceutical companies worldwide five are headquartered in Europe. These companies include Sanofi (France), GlaxoSmithKline (UK), Novo Nordisk (Denmark) and Bayer and Boehringer Ingelheim (Germany) (Source: Evaluate Pharma, 2013, quoted in Blanc, 2014). Fluoropolymers enable the European pharmaceutical manufacturers to produce high-purity products at competitive prices, supporting this economic activity in Europe. 4.7 Key Market 6: Textiles and architecture Enabling characteristics and socio-economic contribution Fluoropolymers provide a combination of waterproofing, breathability as well as low weight and thinness to clothing and footwear. This increases comfort and performance for professionals and consumers. Fluoropolymers provide durable, fire-safe, easy-to-clean building materials whose mechanical attributes enable progressive architectural designs that would not be 89 Of which 940bn for food only. Source Food Drink Europe (2015), based on Eurostat structural business statistics. 90 (Eurostat, 2013). 91 http://www.fooddrinkeurope.eu/publication/fooddrinkeurope-congress-2015-a-taste-of-tomorrow/ 92 Key figures by EFPIA (EU trade association of pharmaceutical producers). 93 Data relating to total import and exports include EU 28 intra-trade which in some cases includes double-counting. 94 Original figure of $179,900 converted using the average ECB exchange rate for 2012 available from: https://www.ecb.europa.eu/stats/exchange/eurofxref/html/eurofxref-graph-usd.en.html May 2017 Doc Ref. 37575i4 No17083i4 52 Amec Foster Wheeler Environment & Infrastructure UK Limited for architectural firms as of 2011111. The EU architectural sector is a highly innovative and EU firms are increasing their market share abroad and gaining stronger international reputation (e.g. the architectural Pritzker Prize112 was won 8 times by EU firms since 2000) (EY, 2014113). Specialised construction activities and signature architecture, which are of particular interest in the context of fluoropolymers, often create significant economic value in terms of output and jobs along the value chain. Additionally, they raise the profile of the particular site or region and can accelerate generate economic activity from tourism and other recreational activities and attract other ancillary investment. 4.8 Key Market 7: Medical applications Enabling characteristics and socio-economic contribution Fluoropolymers enable excellent performance and long lifetimes in a wide range of medical equipment. This reduces the risks of failures, replacements, cross-infections and clogging of medical equipment. They contribute to the reduction/ avoidance of medical complications and additional or repeated medical care, hence contributing to avoided pain and the public cost of medical care. Besides the inherent social benefits, this can be expressed in economic benefits as illustrated by the following examples: Guide wires lined with PTFE facilitate surgical procedures, helping to shorten their duration alongside reducing patient risk and facilitating complicated procedures. On average, every minute a surgery is reduced implies savings of about 15.114 Based on a sample of 36 types of surgical procedures, at least 20 million procedures take place per year in the EU-28115, so reductions in all surgeries by just one minute across the EU would save at least 300m, per year. The durability and bio-compatibility of implants made with fluoropolymers reduces the risk or frequency of the implant having to be replaced. Based on the same cost of surgery as above, each 5h surgery avoided altogether would save 4,500 in each case. 116. In 2000 it was estimated that adverse drug events, infections caught in the hospital and surgical complications, all of which can be reduced through the use of fluoropolymers (alongside other procedures and substances) affected approximately 2 million patients per year in the USA, resulting an estimated $4.55.7bn (about 5.4bn-6.9bn in 2015 prices117) per year in additional costs for patient care, as well as 90,000 deaths.118 European numbers of patients affected may be broadly comparable. Again, even marginal improvements generate substantial savings. Fluoropolymers play an essential role in enabling medical imaging and analysis (via electronic chips and semiconductors in X-ray, MRI, CT scan and echography) as well as medical analysis (blood, tissue, urine analysis). This is covered under key market 4 electronics more generally but the importance of this specific application is highlighted here. 111 http://www.thecreativeindustries.co.uk/industries/architecture/architecture-facts-and-figures 112 http://www.pritzkerprize.com/ 113 Ernst & Young Global Limited. Creating growth. Measuring cultural and creative markets in the EU. December 2014. Available from: http://www.ey.com/Publication/vwLUAssets/Measuring cultural and creative markets in the EU/%24FILE/Creating-Growth.pdf 114 Estimate based on literature. Macario 2010 suggests a cost of surgery of USD15 or USD20 per minute as ballpark figure. Waeschle et al. 2016 calculated an average cost of surgery of 16.63/minute for a German hospital. Note that charges for surgery, which reflect other factors than the bare cost of the procedure itself can be much higher (compare Macario 2010). Macario, A. (2010). What does one minute of operating room time cost?.Journal of clinical anesthesia, 22(4), 233-236. Waeschle, R. M., Hinz, J., Bleeker, F., Sliwa, B., Popov, A., Schmidt, C. E., & Bauer, M. (2016). Mythos OP-Minute. Der Anaesthesist, 65(2), 137-147. 115 Eurostat: Surgical operations and procedures performed in hospitals by ICD-9-CM. 116 Calculated as: 5h * 15/min = 4,500. 117 Inflation based on U.S. Bureau of Economic Analysis: Table 1.1.9. Implicit Price Deflators for Gross Domestic Product (http://www.bea.gov/iTable/iTable.cfm?reqid=9&step=3&isuri=1&903=13#reqid=9&step=3&isuri=1&903=13). Conversion to Euros based on 2015 yearly average exchange rate from the European Central Bank (https://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html). 118 Kohn LT, Corrigan JM, Donaldson MS, editors (2000). To err is human: building a safer health system A report of the Committee on Quality of Health Care in America, Institute of Medicine. Washington, DC: National Academy Press. May 2017 Doc Ref. 37575i4 No17083i4 53 Amec Foster Wheeler Environment & Infrastructure UK Limited Socio-economic value of the sector The global market for medical applications is worth around 215bn. While the US dominates the market, European countries account for significant shares. The top ten medical devices markets globally in 2012 included Germany (7% share), France (4%), the UK (3%) and Italy (2.6%)119. The European medical device sector is characterised by a high degree of innovation, accounting for 41% of patents in the medical sector globally, with over 11,000 patents filed in 2014, in this sector, alone120. As of 2015 some 575,000 people were employed in the sector in Europe, with total sales around 100bn and a positive trade balance of 15bn. Medical technologies continue to improve, supported by a host of technical advances. But efficiency of routine tasks is also essential, given that most European healthcare systems are funded via general taxation. The sector plays a key role in the provision of efficient, quick, cost effective yet safe healthcare of EU citizens121. 4.9 Key Market 8: Renewable energy Enabling characteristics and socio-economic contribution Fluoropolymers provide optical transparency and electrical insulation to photovoltaic (PV) panels and protect them from wind, humidity, UV, extreme temperatures and chemicals. This increases the efficiency and lifetime of PV installations and minimises failures and maintenance stoppages and associated costs. Failure rates (electrical current leaking to the frame which is a safety hazard and a potential ground fault, putting the panels at risk) are as low as 0.1% in recent designs which use fluoropolymer film-based backsheets, compared to 45% in early backsheet designs122. Fluoropolymers in PV frontsheets and backsheets are lightweight and allow for more efficient panel production. Therefore they reduce the cost of production of the panels, enable lower packaging and shipping costs and enable faster and easier installation123: Production efficiency increase of ETFE modules relative to glass modules implies savings in the order of 40m for European PV module manufacturers, or approximately 90m for PV module customers in the EU (see Box 4.5). Release films making use of fluoropolymers non-stick and low friction properties enable efficiency gains in wind turbine production. For instance, PTFE mould linings for wind turbine blades increases the amount of blade print cycles before replacement up to 10fold124. Fluoropolymers facilitate advanced energy storage and conversion technologies, such as lithium-ion batteries 119 Source: https://www.ic.gc.ca/eic/site/lsg-pdsv.nsf/eng/h_hn01736.html 120 Medtech (2015). The figure include EU28, Switzerland and Norway. 121 Source: https://ec.europa.eu/growth/sectors/medical-devices_enhttps://ec.europa.eu/growth/sectors/medical-devices en See also (MedTech 2015). 122 http://www.dupont.com/content/dam/dupont/products-and-services/solar-photovoltaic-materials/solar-photovoltaic-materialslanding/documents/DPVS-Brochure.pdf 123 http://www.pv-magazine.com/opinion-analysis/blogdetails/beitrag/innovative-etfe-film-technologydiscussed 100001678/#ixzz4K272QzZQ 124 http://www.norton-films.com/detailimg.aspx?id=246406 No cost data has been identified. May 2017 Doc Ref. 37575i4 No17083i4 56 Amec Foster Wheeler Environment & Infrastructure UK Limited 5. Potential alternatives and implications of use This section considers a hypothetical scenario whereby fluoropolymers were not available. For each of the key sectors and applications in the previous chapters, we consider the possible alternatives to fluoropolymers, whether these were used historically, before the transition to fluoropolymers, or are used in other similar applications today. This is a high level assessment based on limited consultation with industry conducted in 2016, alongside desktop research. The consultation was conducted among five manufacturers of fluoropolymers and 17 downstream users which operate in all the sectors covered by this study (see Appendix C). It is recognised that R&D activities within the companies consulted and amongst the large number of downstream users are confidential and that they are ongoing. Alternatives are potentially viable in specific applications and contexts, not all of which can be detailed in this report. Conclusions are drawn at sector and/or application level. Further information is contained in Appendix C. In considering the implications of alternatives, the criteria considered126 are as follows: Technical feasibility: Could the alternative provide an equivalent technical function to fluoropolymers in the application concerned? Would the alternative provide the final products with the same/similar technical functionality? Economic feasibility: Would adoption of the alterative incur additional costs to manufacturers, downstream users or consumers? This may arise from higher unit costs, process or production changes requiring new or altered machinery or loss of functionality to the end user, which might impose additional costs. Availability: Is the alternative likely to be available? Are they likely to be available in the required quantities and without undue delay? Hazards and risks of the alternative: Would the overall risks to human health and the environment from the use of the alterative increase or decrease? The information on alternatives contained in Appendix C is based on general feedback on alternatives and on specific examples. As a result, it does not necessarily cover all applications and/or all products. The alternatives mentioned as part of the consultation include steel and other metals; high nickel alloys, polypropylene, PVC, glass, ceramics, mica, polyether sulfone, polyimide, ethylene propylene diene monomer (M-class) rubber (known as EPDM rubber), nitrile rubber (NBR), hydrogenated nitrile rubber (HNBR), acrylic rubber (ACM), Ethylene-acrylic rubber (AEM rubber), fluorosilicone (FVMQ)127, graphite, aramid, slip agents. Each would only be a possible alternative for some of the applications of fluoropolymers. Fluoropolymers are widely used in various specific components, each serves a slightly different purpose and hence each requires different characteristics. Overall, whilst some alternatives might have a similar performance to fluoropolymers for a particular parameter or property, it is the combination or range of properties required for the applications where fluoropolymers are used that is the key characteristic. In sectors such as chemical & power, pharmaceuticals or transport, fluoropolymers provide resistance to a wide range of low and high temperatures and universal chemical resistance. This universal resistance to chemicals is a crucial characteristic of fluoropolymers that is not present in any of the alternatives, according to consultation feedback. There are alternatives that are more or less resistant to specific chemicals but there is not one that is universally suitable. In summary, whilst the implications differ across specific applications, they include: Technical implications: Various implications which include lower performance, increased weight (with associated effects on fuel consumption and fuel efficiency), and reduced durability 126 Our approach follows the criteria set out by the European Chemicals Agency (ECHA) in consideration of alternatives (ECHA (2014) Format for socio-economic analysis and analysis of alternatives. European Chemicals Agency. Available from: http://echa.europa.eu/applying-for-authorisation/preparing-applications-for-authorisation [accessed 25/09/2016] 127 This substance is covered in the analysis, given its hypothetical nature, but in practice it is l kely that if fluoropolymers were not available, then neither would fluorosilicones. May 2017 Doc Ref. 37575i4 No17083i4 57 Amec Foster Wheeler Environment & Infrastructure UK Limited less compatibility and versatility, hence increased challenges associated with component redesign and operating condition requirements. Economic implications: Various which would include efficiency losses, higher initial (investment) costs and higher maintenance costs. The diversity of specific applications would post major product qualification issues alongside design implications. Environmental / health implications: Potential for higher risk of exposure of staff to hazardous substances, higher safety risks (vehicle or aircraft failure), higher emissions arising from weight increases, e.g. in transport. May 2017 Doc Ref. 37575i4 No17083i4 A2 Amec Foster Wheeler Environment & Infrastructure UK Limited ASD (2014) Aerospace and defence industries. Facts & Figures. Available from: http://www.asdeurope.org/communication/publications/facts-figures/ ATAG (2014). Aviation benefits beyond borders. Air Transport Action Group, 2014. Available from: http://aviationbenefits.org/media/26786/ATAG AviationBenefits2014 FULL LowRes.pdf Blanc L. (2014). The European Pharmaceutical Industry in a Global Economy: What drives EU exports of pharmaceuticals overseas? College of Europe MSc Thesis, in collaboration with EFPIA. Available at: http://www.efpia.eu/documents/118/61/The-Pharmaceutical-Industry-in-a-Global-Economy-What-Drives-EUExports-of-Pharmaceuticals-Overseas CEFIC (2016). The European Chemical Industry. Facts and Figures 2016. The European Chemical Industry Council. 2016. Available from: http://www.cefic.org/Facts-and-Figures/ CFHS (2013). The impact of cooking courses on families: A summary of a research study comparing three different approaches. Available from: http://www.communityfoodandhealth.org.uk/wpcontent/uploads/2013/04/CFHS-impact-cooking-courses-families.pdf Colville, F. (2014) UK solar PV industry reaches 5GW installed capacity. 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Available from: http://www.ifpma.org/resource-centre/theeconomic-footprint-of-the-pharmaceutical-industry May 2017 Doc Ref. 37575i4 No17083i4 B1 Amec Foster Wheeler Environment & Infrastructure UK Limited Appendix B Original survey data May 2017 Doc Ref. 37575i4 No17083i4 C1 Amec Foster Wheeler Environment & Infrastructure UK Limited Appendix C Potential alternatives May 2017 Doc Ref. 37575i4 No17083i4 C7 Amec Foster Wheeler Environment & Infrastructure UK Limited [34] http://www.roccera.com/applications/food-processing/ [35] The range of alternatives commented for the food sector are relevant for the pharmaceutical industry as well, except butter and animal fats. The same consequences of not being able to use fluoropolymers than in the food industry apply in this case, with alternatives not being able to meet the same standards and characteristics. [36] www.polyprocessing.com/images/uploads/Polyolefins.pdf [37] https://www.anixter.com/content/dam/Anixter/Guide/7H0011X0 W&C Tech Handbook Sec 03.pdf [38] Specific estimate for the semiconductor industry, available at: http://www.semi.org/en/fluorinated-compound-restrictions-maytrigger-costly-equipment-changes [39] http://www.sciencedirect.com/science/article/pii/S0022113903001039 [40] http://www.fluoropolymer-facts.com/Benefits/index.cfm?navItemNumber=4033 [41] https://www.chemours.com/businesses-and-products/fluoroproducts/teflon-for-semiconductor-manufacturing/ [42] http://www.carbuildersolutions.com/uk/stainless-steel-braided-fuel-hose-12mm-id [43] http://www.carbuildersolutions.com/uk/6mm-copper-fuel-line-per-metre [44] http://www.parker.com/literature/Parflex/B-PAGE%20PDF%20and%20Images/CAT%205162F.pdf [45] http://www.hotrod.com/articles/hrdp-1101-performance-fuel-hoses/ [46] http://www.ebay.com/itm/304-Stainless-Steel-Brake-Fuel-Transmission-Line-Tubing-3-8-OD-Coil-Roll-/201487648996#vi-ilComp [47] http://agscompany.com/product-category/brake-fuel-transmission-lines/standard-steel/coiled-tubing/ [48] http://www.parker.com/literature/Parflex/B-PAGE%20PDF%20and%20Images/CAT%205162F.pdf [49] http://www.delphi.com/manufacturers/auto/ee/cables/xlpe [50] http://www.kra burg-tpe.com/en/products/thermolast/thermolast v-69 [51] https://www.amazon.com/Bully-Dog-53205-Intake-System/dp/compatibility-chart/B00BY64PI2 [52] http://www.kra burg-tpe.com/en/products/thermoplastic-elastomers#tpe [53] https://www.anixter.com/content/dam/Anixter/Guide/7H0011X0 W&C Tech Handbook Sec 03.pdf [54] http://www.hitechpolymersindia.com/peek%20auto.htm, http://info.craftechind.com/blog/why-the-aerospace-industry-loves-plasticmaterials. CAS: 29658-26-2 (CAS 25608-63-3) [55] http://omnexus.specialchem.com/selection-guide/polyethersulfone/applications-and-related-key-features [56] http://www.aetnaplastics.com/products/d/Peek [57] https://www.easa.europa.eu/the-agency [58] http://www.dupont.com/content/dam/dupont/products-and-services/solar-photovoltaic-materials/solar-photovoltaic-materialslanding/documents/Typical-PV-Backsheet-Failure-Mode-Analysis-under-Different-Climates-in-China-DuPont.pdf [59] http://www.coveme.com/files/documenti/press-area/press-coverage/PHOTON_8_2013.pdf [60]http://www.prweb.com/releases/dupont teflon nonstick/cookware v ceramic test/prweb10471794.htm [61] https://www.chemours.com/Teflon/en US/products/nonstick cookware.html [62] http://www.aetnaplastics.com/products/d/Peek [63] https://plastics.ulprospector.com/datasheet/e91969/peek-classix-bc1-white [64] http://www.meddeviceonline.com/doc/an-introduction-to-emerging-polymers-for-medical-devices-0001 [65] https://www.elsevier.com/ data/assets/pdf file/0011/91649/Plastics-Used-in-Medical-Devices link.pdf [66] http://www.taiyo-europe.com/en/tensile-membranes-and-etfe/pvcpes/ [67] http://www.morganasphalte.co.uk/news/the-advantages-and-disadvantages-of-polycarbonate-roofing/ [68] http://www.calpaclab.com/polycarbonate-chemical-compatibility-chart/ [69] http://www.relionbattery.com/blog/7-facts-and-figures-comparing-lithium-ion-vs.-lead-acid-batteries / https://www.powertechsystems.eu/home/tech-corner/lithium-ion-vs-lead-acid-battery/ [70] https://energy.gov/sites/prod/files/2015/02/f19/fuel cell chhp.pdf / http://www.pragma-industries.com/technology/fuel-cellexplained/#Applications May 2017 Doc Ref. 37575i4 No17083i4 May 2017 Doc Ref. 37575i4 No17083i4