Chemical Leasing is a novel service-based business model that supports sustainable chemicals management and responds to the latest changes in international chemicals policies.
Chemical Leasing re-defines the sustainable management of chemicals
Traditionally, suppliers sell large quantities of chemicals to the end-users; it is therefore in their interest to sell as much as possible. De facto, the inefficient use of chemicals is being “rewarded”. The sustainable solution is Chemical Leasing (ChL), whereby users only pay for the services rendered by the chemicals (e.g. volume of water treated, number of parts painted, lengths of pipes cleaned, etc.) and not for the volume of chemicals consumed. By de-coupling the payment from the consumption of chemicals, ChL encourages better chemicals management. This results in clear environmental advantages as well as consequent economic benefits for both suppliers and users of chemicals.
Chemical Leasing brings benefits for both suppliers and users
- Innovative business approach: reducing chemicals increases the financial benefits of both partners
- Optimization of production process / less environmental impact
- Waste reduction and waste recycling is encouraged
- Long-term business relationships are formed / partnership development
- Improved competitiveness for both partners / continuous learning
- Sound technology transfer / sharing of know-how
“Chemical Leasing provides practical solutions for industry to become more efficient and green. At the same time, it reduces the unnecessary consumption of hazardous chemicals and protects human health and the environment. This represents an integrated preventive environmental strategy and a clear win-win situation for industry and the environment.”
Kandeh K. Yumkella, former Director-General, UNIDO
UNIDO official definition of Chemical Leasing
- Chemical Leasing is a service-oriented business model that shifts the focus from increasing the sales volume of chemicals towards a value-added approach.
- The producer mainly sells the functions performed by the chemical, and functional units are the main basis for payment 1.
- 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.
- Chemical Leasing strives for a win-win situation. It aims to increase 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.
1 Functions performed by a chemical might include: number of pieces cleaned; amount of area coated, etc.
Last Update: November 2013