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Furthermore, the same report says this trend is on the upswing. In the 2021 survey, 55% said it was very or extremely important 鈥� an increase of 22% over the responses to the 2019 study. And, in 2021, 62% of consumers said they were willing to change their purchasing behaviour to help reduce negative impact on the environment, up from 57% in 2019.

Moreover, stricter regulations and growing sensitivity among investors, especially in the FMCG category, mean value chain members who are unable to adapt quickly to a more sustainable economy may damage their reputation², lose revenue³ or pay more for capital⁴. This is why taking real steps towards sustainability has become a top priority for many businesses.

But making sustainability a reality can feel like a daunting task, and the path forward is often unclear. Suppliers and brand owners are eager to learn how they can quickly and efficiently incorporate more sustainable content into their products without disrupting their existing manufacturing processes. They want to understand the impact on product quality and product price. And they are keen to identify ways in which they can substantiate their sustainability claims and build trust with customers.

A quick and efficient solution is the mass balance approach.

The mass balance approach enables chemical companies to incorporate sustainable or renewable feedstocks into the chemicals that they provide and, therefore, can help other companies in the value chain 鈥� such as FMCG and packaging companies 鈥� to achieve their sustainability-related business objectives.

What are sustainable or renewable feedstocks?

According to the ISCC^{5 6} there are four categories:

Importantly, it allows companies to do this using existing manufacturing lines and infrastructure, which makes it efficient and scalable. Similarly, the sustainable chemicals produced in this way can be processed in the same facilities as the supplier鈥檚 conventional chemicals (those that are derived from virgin hydrocarbons) and offer the same level of quality and performance. Because the sustainable and conventional molecules are indistinguishable from each other, accounting for sustainable material throughout the manufacturing process is a key part of the mass balance approach.

So, how does mass balance work?

The goal of mass balance is to ensure the exact quantity of sustainable material used in every step of the manufacturing process is accounted for in chemicals that may contain a mixture of sustainable and conventional molecules.

This is done by recording the quantity of sustainable input at each stage of the manufacturing process. An independent third-party, such as ISCC, REDcert or SCS Global Services, then certifies the processes and facilities throughout the value chain to ensure a verified quantity of sustainable resources has been used to displace conventional resources.

The chemicals produced can contain sustainable and conventional molecules in different proportions, but mass balance enables a certified amount of sustainable content, proportional to the total amount initially used during manufacturing, to be allocated to the company that buys them.

In this way, mass balance can resolve the concerns that many suppliers and brand owners will have about incorporating more sustainable content in their products. It is transparent, and the certification verifies that the allocated sustainable content in their purchase has displaced an equivalent amount of conventional content, so they are contributing to a more sustainable economy.

The mass balance approach is an established method that is used successfully by many industries, including agriculture, energy and chemicals. Further, it is comparable with the way in which the power sector is shifting to renewable sources of energy.

Mass balance versus renewable energy

Mass balance in the chemical industry is comparable to how domestic consumers can support the shift to renewable energy. To demonstrate this, let鈥檚 compare scenarios in each sector.

How can using mass balance benefit your business?

For manufacturers, suppliers and brand owners, mass balance offers important benefits that can help enhance business performance and, at the same time, accelerate the transition to a more sustainable economy in a more affordable manner.

Benefits for your business

Sustainability considerations

Depending on your individual solution, mass balance may help you:

• meet the demand for more sustainable products quickly and without disrupting your current processes;
• reduce the carbon footprint of your products and/or packaging;
• increase the renewable/recycled content of your products; and
• create long-term sustainability value for your business

Your next step

Discuss your sustainability needs with Shell Chemicals. There is no one-size-fits-all solution. Every business is different and needs a tailor-made strategy. To build solutions together with Shell Chemicals, contact us at ShellChemicals@shell.com.

^{1_{鈥淪ustainability at a turning point,鈥� May 2021, www.ibm.com/downloads/cas/WLJ7LVP4}}

^{2_{https://www.retaildive.com/news/clouds-on-the-horizon-what-climate-change-means-for-retail/552791/}}

^{3_{https://www.cgsinc.com/en/resources/interest-sustainability-surges-consumer-products}}

^{4_{https://www.msci.com/www/blog-posts/esg-and-the-cost-of-capital/01726513589}}

^{5_{https://www.iscc-system.org/wp-content/uploads/2023/01/ISCC-for-Industrial-Applications_december_2022.pdf}}

^{6_{https://www.iscc-system.org/wp-content/uploads/2023/01/ISCC_PLUS_Certification_Guideline_012023.pdf}}

^{7_{Description aligns with /business-customers/chemicals/media-releases/2023-media-releases/henkel-signs-agreement-with-shell-on-renewable-based-ingredients-for-persil-purex-and-all-brands.html}}