Chemical leasing is a performance-based business model that aims to optimize the use of chemicals while reducing their environmental impact.
 
Chemical leasing requires a collaborative approach between chemical suppliers and their customers, as the focus shifts from selling chemicals to selling the service they provide. Instead of purchasing chemicals, customers pay for the desired function or performance of the chemicals (for example, the treatment of wastewater, disinfection of hospitals, or cleaning of textile). Since it is no longer in the interest of the chemical manufacturer to sell based on product volumes, this innovative Product-as-a-service (PaaS) business model encourages the efficient use of chemicals, promotes resource conservation and minimizes waste generation.


Source: https://www.unido.org/our-focus-safeguarding-environment-resource-efficient-and-low-carbon-industrial-production/chemical-leasing

This website provides a platform for anybody interested in learning more about chemical leasing, by collating comprehensive information, practical tools and inspirational case studies of successful chemical leasing projects. In line with the Federal action plan circular economy, (FR/NL) this will assist the move towards more sustainable, circular business models in the chemical industry.


Source: https://www.unido.org/our-focus-safeguarding-environment-resource-efficient-and-low-carbon-industrial-production/chemical-leasing

UNIDO Global Chemical Leasing Programme

Almost 20 years ago, the United Nations Industrial Development Organisation (UNIDO) launched a Global Chemical Leasing Programme, in order to promote chemical leasing as a performance-based business model. Moving away from sales volume-based business models towards value-added approaches, contributing to the United Nations Sustainable Development Goals (SDG), especially SGD 9 “Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation”, and aiming to accelerate the Circular Economy movement.

UNIDO definition of Chemical Leasing

Chemical Leasing is a performance-based (service-oriented) business model that shifts the focus from increasing sales volume of chemicals towards a value-added approach. The chemical supplier mainly sells the functions per- formed by the chemical and functional units are the main basis for payment.
Within Chemical Leasing business models, the responsibility of the user and the supplier is extended and may include management of the entire life cycle. Chemical Leasing strives for a win-win situation. It aims at increasing the efficient use of chemicals while reducing the risks of chemicals and protecting human health. It improves the economic and environmental performance of participating companies and enhances their access to new markets.
Key elements of successful Chemical Leasing business models are proper benefit sharing, high quality standards and mutual trust between participating companies



To learn more, have a look at the dedicated website: www.chemicalleasing.org


Chemical leasing and sustainability

By aligning the business interests and motivations of the chemical supplier and user(s), chemical leasing intends to create a win-win situation, by achieving economic, social and environmental benefits. In order to ensure that chemical leasing in practice makes an actual positive contribution to improving environmental performance of chemicals, a set of 5 sustainability criteria have been developed by international chemical leasing experts: 

  1. Reduction of adverse impacts for environment, health, energy and resource consumption caused by chemicals and their application and production processes
  2. No substitution of chemicals by substances with a higher risk
  3. Improved handling and storage of chemicals to prevent and minimize risks
  4. Economic and social benefits are generated; a contract should contain the objective of continuous improvements and should enable fair and transparent sharing of the benefits between the partners
  5. Monitoring of the improvements needs to be possible

Projects must fulfil all 5 criteria, in order to be considered chemical leasing (as intended by UNIDO).

Chemical leasing – industries and processes

Chemical leasing business models extend the responsibilities of the chemical user and supplier, potentially including chemical management of the entire life cycle. This requires a certain level of mutual trust and respect between participating companies. Chemical leasing can be applied to many different types of industries and processes, ranging from textile cleaning, (waste)water treatment and agriculture, to food and beverage production. Considering the increased cooperation between suppliers and users of chemicals, in general chemical leasing is best suited for non-core, support type of processes in a company, but it can also be applied to core processes. The table below provides examples of processes suitable for chemical leasing:
 
Definitions: The “chemical user” is a company that uses chemicals and the “chemical supplier” is an entity in that company’s supply chain such as a manufacturer of chemicals and/or a distributor or trader of chemicals.

The WIN-WIN business model

PROCESS

CHEMICALS

SECTOR EXAMPLE

POSSIBLE UNIT OF PAYMENT

Lubrication of packaging lines

Lubricants

Beverage, dairies

# of working hours, volume of packed beverage, n° of packed bottles

Lubrication of equipment

Lubricants

Different sectors

# of working hours

Cleaning in place (CIP)

Cleaning agents, disinfection agents

Beverage, dairies

# of cleaning cycles

Bonding of boxes

Hot melt adhesives

Food processing and any automated linefor bonding of boxes

# of bonded boxes

Bonding of labels

Adhesives

Beverage

# of labeled bottles

Bonding in wood processing

Adhesives

Wood processing

Square meters of bonded surface

Bonding of windows

Adhesives

Civil engineering

# of windows

Bonding in shoe industry

Adhesives

Footwear

# of produced shoes

Cleaning of surface

Solvents, water-based cleaners

Metalworking, other industries

Square meters of cleaned surface, n° of working hours (for automated, continuous processes)

Surface preparation (adhesion improvement)

Chemicals for surface preparation (i.e. phosphates)

Metalworking, automotive industry

# of items, square meters of prepared surface

Galvanization

Different chemicals for galvanization

Metalworking

# of items, square meters of prepared surface

Surface protection

Powder coatings,
solvent and water-based coatings, hot-dip zinc

Metalworking

# of items, square
meters, n° of protected items

Waste water treatment

Chemical for WW treatment

Different industries

Cubic meters of treated water

Water treatment and disinfection

Different chemicals for water treatment

Drinking water supply

Cubic meters of purified water

Oil and gas drilling

Application of chmicals in the extraction of products from oil wells

Oil and gas

# of working hours

Water purification and oil dehydration

Purifier, emulsion
breaker, antifoam

Oil and gas

Kilo barrels of oil with a specified quality

Printing

Printing inks

Printing industry

Square meters of printed surface

Textile dyeing

Dyes

Textile industry

Square meters of colored textile or kg of yarn

Leather treatment and dyeing

Dyes, various treatment chemicals

Leather industry

Square meters of treated leather

Laundry

Detergents, disinfection agents, softeners

Hotels, Hospitals, Laundries

Kg of laundry

Cleaning of floor surfaces

Cleaning agents

Hotels, Hospitals, Supermarkets

Square meters of cleaned floor

Dishwashing

Detergents, disinfection agents, softeners

Hotels, Hospitals

N° of cycles (full capacity of dishwashing machine)

Laundry, cleaning, dishwashing

Detergents, softeners, disinfection agents

Hotels

N° of overnight stays

Crop protection

Fertilizers, Pesticides

Agriculture

Yield (kg)

Source: https://chemicalleasing.com/chemical-leasing-in-practice/#:~:text=Chemical%20Leasing%20can%20be%20applied,bottles%20in%20the%20beverage%20industry (nr 10)

Step-by-step approach to Chemical Leasing

For more details of each step see UNIDO’s Toolkit to implement Chemical Leasing in 3 steps

Step 1: Identify business opportunities for implementing Chemical leasing in your company

  • Collect information on chemicals used in your company and identify related processes, quantities, and costs (fixed processes that cannot be modified are not relevant for this exercise)
  • Analyse and score all relevant chemicals for the following 3 parameters; quantity consumed, cost and hazardous properties
  • Pre-define units of payment for the most relevant chemicals, based on their function/performance/benefit

Step 2: Develop Chemical Leasing in your company, define options and identify partners

In the second step close collaboration between chemical users and suppliers is required, therefore the following steps are important:

Checklists and tools have been developed that can help you with this step (see next section).
 
Different models for cooperation between partners in a Chemical Leasing project are possible (see figure below). Web-based platforms such as the Symbiose platform (OVAM) could assist companies in the search for potential chemical leasing partners.


 

Step 3: Monitoring, documentation, and evaluation of Chemical Leasing results

Once a Chemical Leasing model has been setup, the final step entails continuously monitoring of the model to evaluate benefits (economical, societal, and environmental) and identify potential improvements.

Chemical leasing – Checklist and Tool

In order to evaluate and monitor the sustainability criteria for Chemical Leasing, a set of sub-criteria and indicators have been developed by the German Environment Agency with partners. This will allow for a standardised review of Chemical Leasing contracts and ensures their sustainability performance while helping companies maintain a high business standard.
 
The following tools are freely available online:


Additional resources

Chemical Leasing - Case studies

Chemical leasing could offer potential new business opportunities and contribute to improving the environmental impact of the chemical industry. While in Belgium the concept of chemical leasing is still rather unfamiliar, there are already several commercially successful chemical leasing models being implemented abroad.
 
The case studies described below highlight the tangible benefits of chemical leasing for different partners in the supply chain. By shifting the focus from chemical sales volumes to performance-based contracts, chemical leasing promotes innovation and encourages the development of safer and more sustainable business practices.

CASE STUDY: SAFECHEM solvent lease
SAFECHEM – COMPLEASE™ Chemical Leasing - Do less for more
 
SAFECHEM applies the chemical leasing model for industrial surface cleaning solutions for automotive, aerospace, electronics and other industries. This means that instead of selling based on the volume of chemicals, the company sells based on their performance. Shifting to a chemical leasing type of business model has allowed the company to use less resources, improving sustainability and increasing economical benefits.
 
The chemical leasing model is based on principles of the circular economy; closing the loop through the reduction of solvent consumption, re-use and recycling of solvents. This leads to optimization of resources used, a reduction of waste and provides economical benefits.




More case studies can be found on the UNIDO chemical leasing website for inspiration.

CIRCULAR BUSINESS MODELS IN CHEMICAL INDUSTRY (BELGIUM)
 
Even though in Belgium the concept of chemical leasing is not very well known, there are already several successful cases where different types of circular business models are being applied in the chemical sector: