Chemical leasing business models

Within Chemical Leasing business models, the responsibility of the producer and service provider is extended and may include the management of the entire life cycle. 

Based on experiences obtained in Egypt, Mexico and Russia and to enable a systematic approach of the implementation of Chemical Leasing business models at company level, UNIDO has developed a first toolkit. It covers the main steps to be undertaken to ensure the smooth and efficient application of Chemical Leasing in the industries of different countries. An overview of the general content of UNIDO s Chemical Leasing toolkit is included in Chapter 8. 

An important lesson learned from the implementation of the project "Promotion and implementation of closing-the-loops cooperation and business models in the chemical industry" is the need for quality assurance of Chemical Leasing business models. The models must result in improved environmental performance of the participating companies, reduced risks of chemicals and enhanced human health protection. 

With the present publication we hope to contribute to the greening of industry and inspire companies all over the world to engage in Cleaner Production and Chemical Leasing business models. 

Schwager P, Moser F (2006) The application of Chemical Leasing business models in Mexico. ESPR 13(2) 131-137... 

A tube producing company needs solvents to clean their products before delivery to customers. The classical model and the Chemical Leasing business model are compared with regard to the cleaning of 2 million tubes, always taking into consideration both, the supplier of solvents (chemical producer) and the tube producer (user of chemicals). 

Service provided under the Chemical Leasing business model... 

The consumption of nickel was reduced in Chemical Leasing business model by 22% from 585 kg/year to 420 kg/year. Savings of around US 10,000/year could be achieved higly depending on the increasing nickel price. 

The North-Western International Cleaner Production Centre (NWICPC) as the project coordinator organised the communication (meetings, workshops, agreement preparation) between the representatives of the service provider and recipient, provided them with the information about the advantages of the Chemical Leasing business model and promoted the national and international support of the project. 

Reasons The application of Chemical Leasing business model provided more than 50% decrease of wastewater purification costand required chemicals consumption thus providing a mutual profit for both participating companies. Small enterprises also can collect wastes for cyclic purification (for example once per week). ... 

In the course of the implementation of the Chemical Leasing business model not only the technical and the economic feasibility, but also the general legal conditions have to be clarified. In this context questions in the fields of private law and administrative law arise. 

The most important questions concerning private law are What kind of contract is needed to implement a Chemical Leasing business model, what is the difference between such a contract and a purchase contract regulating a conventional business model, and what provisions should be included in the contract ... 

It should be noted that the present toolkit is the first attempt to provide concrete guidelines for experts and especially independent monitoring institutions like National Cleaner Production Centres (NCPCs) that are working with industry on Chemical Leasing business models. UNIDO intends to revise and update the toolkit on a regular basis and also to elaborate a specific Chemical Leasing manual in the near future. 

Three basic tools were developed to support the selection of clients that might be interested in participating in a Chemical Leasing business model. 

The following check list is a support tool for experts, NCPCs and other organisations involved in Cleaner Production activities to screen existing CP projects and define the potential for starting-up Chemical Leasing business models. Legal compliance is a must for all projects. 

This agreement is the initial paper that defines the interest of a minimum of two companies and the NCPC (and/or involved experts) to cooperate in the development of a Chemical Leasing business model. 

Successful application of Chemical Leasing business models with tangible environmental and economic benefits requires a systematic and structured approach. UNIDO defines five phases of a Chemical Leasing business model that cover a period of approximately 24 months (Fig. 3). 

Following the process optimisation, the design of the Chemical Leasing business model should be initiated. Besides a detailed cost benefit analysis the essential part of this phase is the elaboration of the Chemical Leasing contract with all the related financial, legal, technical, management, implementation and monitoring issues for the implementation of ChL. 

During the contract period the companies are obliged to report to the expert or NCPC on the progress of implementation (e.g., number of coated articles per months, problems faced during the implementation, etc.) on a monthly basis. The collected data will be analysed on a regular basis and used as a basis to evaluate and eventually to improve the Chemical Leasing business model. 

Encouraging other companies, sectors and countries to follow the example of successful Chemical Leasing business models is an important element to mo-... 

Experiences obtained so far, show that a systematic approach based on the preventive Cleaner Production idea boosts the economic and environmental success of a Chemical Leasing business model. 

The present toolkit intends to support the work of NCPCs and independent experts to ensure the high quality of Chemical Leasing business models and the efficient use of chemicals while reducing the risks of chemicals and protecting human health. 

Chemical Leasing Business Models - an Innovative Approach to Manage Asymmetric Information Regarding the Properties of Chemical Substances... 

The chapter is organised as follows In the following section 2 we focus on the traditional sales concept and the consequences of information exchange. In section 3 we introduce possible objectives of Chemical Leasing business models and in comparison to the sales concept discuss differences in information management. In section 4 we turn our attention to the applicability of Chemical Leasing business models in practice. Section 5 closes with a summary and discussion of results. 

Chemical Leasing business models can differ with regard to (1) location of the application of the chemical/ownership of the chemical -the chemical can be applied both on the site of the supplier and the user (2) the proprietorship of the equipment - the equipment can be owned either by the supplier, by the user, or by a third party equipment provider (3) the application of the chemical - in leasing contracts the application of the chemical can fall under the responsibility of the supplier, the user, or a third party (4) the operation of the equipment -the operation of the equipment may either fall under the responsibility of the lessor or the supplier and, (5) the recycling and/or the final disposal - the recycling and/or final disposal of the chemical may either be provided by the user, the supplier, or a third party5. 

The risk of negative impacts on human health and the environment increases with the amount of traded chemicals. It is therefore important to find out whether shortcomings of the traditional sales concept can be avoided by Chemical Leasing business models. 

First, let us recall the shortcomings of the sales concept in face of information asymmetries. As stated in section 2, the traditional selling of chemicals, firstly, does not prevent over-consumption. In a competitive market it is rather the aim of the sales concept to sell as much commodities as possible to increase the profits of the sellers. A sales contract consequently provides no incentives to reduce such adverse effects of chemicals on human health and the environment that are related to the quantity of chemicals in use. Secondly, the sales concept provides no incentives for transferring accurate knowledge on the efficient application of the chemical, as this lowers the profits of the sellers. In contrast, Chemical Leasing business models are capable to effectively deal with problems of information asymmetries. Based on the findings of Ohl and Moser (2007), both models introduced above (A and B) show comparative advantages as follows ... 

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