From masks and other personal protective equipment to hand sanitizer and crucial disinfectants, the chemical industry plays an essential role in producing important supplies in the fight against COVID-19. SmartBrief caught up with American Chemistry Council President and CEO Chris Jahn to learn more about what the industry is doing to combat the virus and how the economic fallout is impacting ACC's members.
What role does the chemical industry play in helping to address the challenges we are facing from COVID-19?
The U.S. chemical industry has a vital role to play in response to COVID-19. Following President Trump’s declaration of a national emergency, one of the first steps the American Chemistry Council took on behalf of its members was to secure federal designation of the U.S. chemical industry and its workers as “essential critical infrastructure.” This means that the Department of Homeland Security (DHS) identified the chemical industry and its employees as an industry sector critical to public health and safety, as well as economic and national security.
And the reason is clear: chemicals enable countless products that are needed to support life-saving medical care, including personal protective gear for front line health workers; chemical biocides and disinfectants that are the active ingredients in cleaning products that eliminate bacteria and viruses on a personal, household and industrial scale; and plastic products and packaging that help prevent contamination of food, medicine, personal care and medical products while helping prevent person-to-person transmission of disease-causing microorganisms. And let’s not forget the production of chlorine, essential to protecting our nation’s drinking water, or ethylene oxide, an important medical equipment sterilizer.
When you stop to think about it, you realize that the chemical industry supports a vast supply chain. In fact 96 percent of all manufactured goods rely on chemistry. Chemistry represents 75 percent of the value of cleaning and disinfectant products; 27 percent of the value of medical equipment, including face masks, diagnostic equipment, disposable gowns, shoe booties and hoods; and 25 percent of the value of material inputs used to make medical supplies such as test tubes, housings for test kits, goggles, surgical gloves, and surgical instruments.
Beyond continuing to manufacture many of the products needed to produce materials being used to fight the virus, what are some of the unique ways that chemical companies are stepping up to the challenge?
People and companies all across the country are stepping up. None more so than our medical community and the frontline healthcare workers, and it’s really incredible to see so many ACC members supporting them. ACC members have a long and rich history of community outreach and support. Right now we have member companies, big and small, that are donating extra supplies of gloves, masks, or other personal protective equipment to local hospitals. Others are providing volunteers and financial contributions to local community-based relief organizations, churches, and food pantries, for example. And still others are providing large-scale contributions of materials and product to help address the shortage of hand sanitizers; or ramping up production or even repurposing production lines to create other high-demand products like masks, gowns, and acrylic sheeting.
The Environmental Protection Agency (EPA) took some heat for announcing new guidelines on regulatory enforcement. Was that a necessary step?
Yes, EPA’s temporary enforcement discretion policy provides interim and important flexibility to manufacturers in what we all agree is an unprecedented situation. There’s been a lot of misinformation and confusion about what this means. But let’s be very clear about why this is important: EPA’s decision to grant temporary enforcement discretion provides manufacturers with additional time to complete administrative requirements such as regulatory filings and allows inspections to be rescheduled after workforce shortages, travel and movement restrictions no longer present uncontrollable challenges to compliance.
This short term measure is needed because essential personnel and resources must be devoted to maintaining production and meeting increased demand for vital chemical products such as sanitizers, disinfectants, and plastics for consumers, governments and the health care community.
While some manufacturing plant personnel have been designated as essential to allow for continued operations, the vast majority of other company employees are subject to telework requirements, travel restrictions and stay-at-home orders consistent with CDC and local or state government requirements. Because of this, many administrative activities such as regulatory filings and inspections simply may not be feasible during this period.
The principle of providing flexibility in meeting regulatory requirements goes back decades and was invoked in the aftermath of Hurricane Katrina, an event equally as unique and unprecedented as what the United States faces today from COVID-19. Any company in need of this flexibility will be required to fully document and submit to EPA a rationale and plan to resolve any outstanding regulatory requirements.
All ACC members are committed to safe and responsible operations through Responsible Care®, and agree that enforcement discretion should only be sought when absolutely necessary. We, like all other Americans, look forward to the time when the risk to our employees and communities has passed and such flexibility and discretion will no longer be needed.
What kind of economic impact is the industry seeing?
No sector is immune to the economic impact of the global COVID-19 pandemic. Right now 29 percent of the U.S. economy is in lockdown. Remember though, with 96 percent of all manufactured goods being touched by chemistry, the value chains supported by chemistry are incredibly diverse. So in some cases we see strong markets; in others we are seeing significant softening. For example, there are reports that the U.S. isopropanol market remains strong as demand for hand sanitizer and other cleaning products continues. In contrast, light vehicle sales are falling and that’s an important market for performance chemistries and plastic resins.
At ACC we are fortunate to have a top-notch Economics team, led by Dr. Thomas Kevin Swift. One of the monthly reports that his team produces showed that most recently, led by a large decline in China due to the COVID-19 coronavirus, global chemicals production fell 2.4% in February, an acceleration from a smaller decline in January. Likewise, U.S. chemical production also dropped slightly in February, as did specialty chemical market volumes. March and April figures will reflect further weakening, I’m told.
There’s a tremendous amount of uncertainty right now about the timing, scope and scale of restrictions being lifted. There’s no doubt we are facing significant challenges, but I also believe we remain well-positioned to bounce back relatively quickly.