Fostering Competitiveness through Innovation. Brussels – 7 th March 2007.

1. European Regions transitioning to Lower Carbon Economies Ensuring the “Chemistry”in Europe’s Regionsis Ripe for Innovation?Russel MillsDow Europe & SusChem Fostering Competitiveness through Innovation. Brussels – 7th March 2007.

2. www.SusChem.org Technology Platform Company HLG CEE Common Interest in Effective Innovation • Frameworks to facilitate innovations • Enabling leadership in resource efficiencies in EU • Implementing NOW (before other regions value) Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

3. Overview 1. Understanding futureInnovation- in lower carbon economies 2. Enabling needed Innovations- total value chain resource efficiency 3. Speeding that Innovation- stakeholders focusing on progress Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

4. 1. Understanding Future Innovation Some reminders on innovation : In knowledge economy, generating knowledge is the start (initial investment) • Converting investments in know-how or new ideas (research) back into wealth & jobs is the goal Focus is on excellence • “outperforming the alternatives” We’re all involved • equally applicable to older (thriving) industries Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

5. 1. Understanding Future Innovation Innovation requires Portfolio approach - Incremental + Breakthrough - Continuous incremental improvements yield real value Imagine if our industry/company performance was copied by EU citizens or USA citizens EU: climate goals USA: no M.E. imports Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

6. Energy • Transport • Construction • Health and hygiene • Safe food supply • Communications • Clothing & furnishings • Recreation etc. Chemicals 2. Value Chain innovation Transitioning to low resource economies requires efficiency in every step of the value chain – “Chemistry” often key enabler Petroleum Minerals Biomass By-products & waste streams Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

7. 2. Chemistry Value Chain Innovations More intelligent bio-mass use via bio-refinery concept i.e. turning waste into higher value Chemicals or Fuel Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

8. 27 m 2.5 m 2. Chemistry Value Chain Innovations From batch to continuous plus Process Intensification gains Reducing space, waste , energy, defects etc. Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

9. 2. Chemistry Value Chain Innovations Catalysis, process technology and/or chemicals to enable CO2 capture Making CCS economically viable at scale Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

10. 2. Chemistry Value Chain Innovations Integrated approaches for the smart energy homes of the future Making use of fuel cells, thin film solar, bio-gas, phase change materials etc. Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

11. Raw materials Manufacture Distribution Use Disposal/recycle • Lightweight plastics and composites • Paint to increase durability • Improved efficiency seals • Antifouling paints to reduce marine pollution and fuel consumption • Adhesives which aid disassembly • Lower VOC paints • Biodegradable metal working fluids • Lubricants and fuel additives to improve fuel economy and emissions • Exhaust catalysts • Biofuels • Fuel cells and other new power units 2. Chemistry Value Chain Innovations Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

12. Bio-based tyre tread for 2-6% energy savings 2. Chemistry Value Chain Innovations Platinum nanoparticle catalyst for fuel cells Biomass co-firing for coal power plant and industrial CHP (Combined Heat and Power) to optimise both resource use & energy efficiency Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

13. 3. Speeding Progress Taste is the enemy of Creativity • Perfection is the enemy of Innovation • There are never perfect solutions, but there are always better alternatives Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

14. 3. Speeding Progress Industries innovate - Governments enable • We will innovate more, the only question is where • First support & stimulate before you regulate • Prioritise! - we invest where we can be world-class Chemical industry is key enabler for industrial innovation • Support initiatives to integrate chemistry processes that facilitate downstream innovations • Ensuring “Sustainable Chemistry” is sustained in EU Support early deployment and market pull initiatives • More assertive use of our market power will ensure most resource efficient innovators implement first in the EU Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

15. For more information SusChem: visit www.suschem.orgor email horizontal@suschem.org Dow: Surf at www.dow.com to review our commitments to energy efficiency, renewables & climate change HLG on Competitiveness, Energy & Environment: 3rd report that focuses on innovation available on site of DG Enterprise Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels

16. The “Chemistry” is ripe for Innovation Summary • Resource efficiency already offers high value growth • Implementation NOW is key to maintain advantage • Off-shoring world class energy intensive industries will not contribute to global climate change problem • Improving efficiency NOW (in EU) will contribute • Some already implement integrated approaches that build on enabling technologies (such as Chemistry) • IS YOUR REGION OPEN (NOW) TO IMPLEMENT SUCH INNOVATIONS? Fostering Competitiveness through Innovation - Russel Mills – 7th March 2007 - Brussels