How chemical companies are implementing AI
In a time marked by global overcapacity and intense competition, chemical companies are increasingly embracing artificial intelligence (AI) to enhance cost efficiency and operational productivity. From automating routine processes to accelerating research and development (R&D), AI is reshaping the chemical industry. As companies navigate complex market dynamics and sustainability demands, AI presents unprecedented opportunities to drive growth and innovation.
AI's transformative role in the chemical sector
One of the most notable examples of AI adoption in the chemical industry comes from Covestro. On 25 June 2024, the company announced a global transformation plan aimed at saving €400 million annually in material and personnel costs by 2028. It aims to do this through a transformation programme focused on digitalization and AI.
AI’s potential in the sector is vast. A study by Accenture presented at the American Chemistry Council (ACC) Annual Meeting revealed that labor productivity in the chemical industry has grown by less than 1% per year over the past 15 years. However, generative AI (gen AI) offers a promising solution. The study suggests that gen AI could automate or augment about 31% of working hours in the industry. Notably, 97% of industry leaders believe this will positively impact their market share within the next three years.
Current implementations of AI in chemical companies
Several leading chemical companies have already launched AI-driven initiatives to improve their operations. BASF and Dow, for instance, have integrated AI into their customer service functions and R&D processes. Mitsui Chemicals and IBM announced a partnership in 2023 to enhance the agility and accuracy of discovering new applications using machine learning and gen AI. Similarly, SandboxAQ, a spin-off from Alphabet, acquired quantum chemistry simulation firm Good Chemistry in January 2024, enhancing its computational chemistry and AI simulation capabilities for drug discovery and materials design.
According to Accenture, AI will be critical in addressing talent shortages in the chemical industry, with around 30% of the current workforce expected to retire in the next five years. The report found that production workers, including planners and supervisors, spend 90% of their time on simple judgement tasks in plant operations, such as administrative duties and documentation. AI can significantly reduce this burden. For planners, approximately 57% of their roles have the potential to be automated, while a further 15% could benefit from AI augmentation.
How AI is reshaping operations
Automation through AI primarily involves processing large datasets, such as machine logs and production tables, using language models. Augmentation, on the other hand, adds an extra layer of sophistication, allowing operators to query AI systems based on recorded data.
He also noted that large companies are likely to build dedicated teams to explore AI applications at the plant scale.
Prescott highlighted that AI could optimise plant operations by processing vast volumes of sensor data that would otherwise overwhelm human cognition. This capability allows for better control and risk management of chemical processes, leading to improved efficiency and safety.
The sustainability challenge and AI's role
While AI offers numerous benefits, its integration into the chemical industry also presents sustainability challenges. Accenture’s report states that AI will be essential in meeting the global demand for sustainability-related products, including materials for solar panels, projected to be worth US$570 million by 2028. However, the energy consumption associated with data centers required to support AI could conflict with emission reduction targets. Data centers and transmission networks currently account for about 1% of global energy-related greenhouse gas emissions.
For example, Microsoft recently disclosed that it is not on track to meet its 2020 pledge to become carbon-negative by 2030, largely due to rising Scope 3 emissions from data center construction. Nonetheless, Prescott believes that AI can mitigate some of these issues through improved forecasting and optimization.
Start-ups and innovations driving AI adoption
New start-ups are playing a significant role in advancing AI in the chemical industry. SOLVE, a spin-out from Imperial College London and BASF, is leveraging AI and innovative experimental methods to improve the manufacturing of products such as drugs and fertilizers. Supported by funding from BASF subsidiary Chemovator and venture capital firm Creator Fund, SOLVE aims to make chemical production more sustainable by minimizing waste, reducing energy use and shifting from toxic to benign materials.
The company uses advanced flow chemistry techniques to collect accurate experimental data, which is then used to train machine learning models to predict optimal manufacturing processes.
Another promising start-up, Entalpic, raised over £7 million in September 2024 to decarbonize the chemical industry using AI. Founded in 2024, Entalpic uses AI to identify and evaluate new materials and molecules that could replace outdated industrial chemical processes. The AI platform conducts automated experiments from diverse data sources, including quantum simulations, physical lab experiments and academic literature, to deduce the most sustainable materials.
Co-founder and Chief Scientific Officer of Entalpic, Alexandre Duval, expressed excitement about AI’s potential to accelerate innovation in materials science. Entalpic aims to improve hydrogen production, create sustainable cement, and develop better semiconductors for batteries, with future solutions for pollution control, energy storage and fertilizer production also in the pipeline.
Future applications of AI in the chemical industry
Looking ahead, AI’s role in the chemical industry is expected to expand further. Gen AI tools are already transforming commercial performance by enhancing marketing and sales functions. Research indicates that companies investing in AI see a revenue uplift of 3 to 15% and a sales ROI increase of 10 to 20%.
Traditionally, chemical companies have lagged in adopting sales and marketing technologies like customer relationship management (CRM) tools. AI can bridge this gap by improving cross-functional decision-making and connecting strategy to commercial execution. For instance, generative AI solutions can reduce the time it takes for sales teams to identify and prioritize customer opportunities, validate leads and generate personalized communications.
One US-based chemical company successfully used generative AI to identify new market opportunities and prioritize prospects based on value potential and conversion likelihood. This approach translated growth strategies into actionable sales execution, resulting in a growth pipeline three times the revenue for targeted product lines and a 10 to 20% revenue increase within 12 months.
Conclusion
AI is undeniably transforming the chemical industry, offering solutions to enhance operational efficiency, drive innovation and promote sustainability. As companies continue to integrate AI into their processes, they will unlock new opportunities for growth and address some of the most pressing challenges in the sector.
At ICIS, we've embraced this vision, integrating AI deeply within our processes to lead the way in innovation.
Our approach extends beyond internal efficiency; we're dedicated to leveraging AI to deliver greater value to our customers. Skelton has emphasized this customer-first perspective.
This philosophy gave rise to Ask ICIS, a solution designed to anticipate and address customer needs more precisely, adding real value to their operations.
Watch the on-demand recording of The Digital Leap: AI’s Impact on Data and Analytics, where Fionn O’Raghallaigh, Product Director at ICIS, explores why future competition in commodity markets won’t just be about margins - but about how much data can be synthesised.
Author:
Ropa Mugadza is a content writer at ICIS, working across energy, chemicals and sustainability to tell the story of market movements.
She has previously worked as a writer and content strategist in the fields of green infrastructure, sustainable development, and environmental technology.
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