[OPINION] Future of chemical industry: Leveraging data to drive sustainability

By aligning its economic growth with ESG commitments, Malaysia is enhancing its global competitiveness while becoming a magnet for foreign direct investment in the ASEAN region.

Malaysia’s chemicals industry is driven by the urgency to embrace sustainability and innovation to be able to meet the goals set by NETR. To achieve its ambitious growth and sustainability targets, chemical companies must embrace digital transformation to deliver both value creation and sustainability improvements. This includes leveraging cutting-edge technologies such as artificial intelligence (AI), big data analytics, process simulation, automation systems, cloud computing, and industrial internet of things (IIoT) solutions. Data-led initiatives will play a significant role in driving energy efficiency, reducing waste, optimising renewable power mix and expediting the design and implementation of new processes, using recycled or renewable feedstock.

When constructing new plants or optimising existing ones, profitability and sustainability can both be achieved with the help of a model-driven framework built around data-led technologies such as cloud-based data management platforms or digital twins.

Three pillars are essential to unlocking these gains for chemical companies:

Reliable and efficient plants can deliver outputs more quickly with fewer resources at a lower cost. The operation gains in terms of flexibility can better adapt to dynamic market conditions. For example, production can be quickly adjusted in response to demand shifts or to harmonise with changes in feedstock availability.

Digital tools can be harnessed to improve efficiency on several fronts. By using a digital twin to determine the ideal state, process modelling and simulation can identify areas for improvement and determine the most efficient ways to reduce waste and increase throughput. In process plants, this increase in efficiency translates into minimising fuel consumption for steam and power systems, directly reducing Scope 1 greenhouse gas emissions. Further, with AI-powered simulations, asset optimisation helps ensure that equipment operates at peak efficiency and reliability. In addition, human efficiency can also be improved, such as by enhancing workforce competency through experiential training programs to develop employee skills and enhance health and safety.

Embedding clean-tech elements across the value chain supports greener outcomes for chemical operations. Such measures include tweaking existing processes and developing innovative production methods.

Incorporating feedstocks that have a lower footprint, such as bio-based materials, can dramatically reduce emissions. The supply chain optimization models can include these low carbon feedstock options allowing optimization for improving profitability while meeting sustainability targets. With the help of a process digital twin, companies can evaluate the impact of feedstocks changes, and ascertain when to shift to cleaner materials, such as those sourced from recovery chains.

Similarly, digital technologies can help engineers to identify and design novel and sustainable processes. The use of AI assisted simulation, predictive analytics and information management solutions enables fast and low-risk engineering cycles, optimising every phase of capital projects and giving companies control over their value chains.

The greenest unit of energy is the one not used – which is why embracing the circular economy is going to be a game changer in boosting efficiency, and in turn, sustainability. Digital technologies will be key in lighting the way to the sustainable and regenerative approaches that are essential to circularity, showing how resources can be used more efficiently, waste minimized, and materials are recycled and repurposed.

Process simulation studies support the switch to circularity by helping operators understand how different energy sources can impact their operations. For example, replacing gas-powered steam generators with electrical boilers eliminates fossil fuel use for steam generation. Similarly, with the help of solar panels, wind turbines and a repository of real-time weather data, companies can create 360-degree simulations of green hydrogen production, modelling electrical fluctuation and predicting hydrogen output.

True circularity requires the use of recycled feedstocks. Once a plant has been revamped, or process conditions adjusted to process recycled feedstock, a process digital twin serves as a valuable tool to monitor, optimize, and visualize operations in real-time for the efficient uptake of recycled materials.

A third application comes from real-time KPI monitoring and reporting. Digital twins provide a holistic view of operational data, enabling companies to quantify and optimize critical metrics. With programs such as AVEVATM Process Simulation, combined with AVEVA PI Data Infrastructure, organizations can track environmental KPIs in real time and make realistic visualizations for sustainable operational excellence.

Industrial enterprises are increasingly deploying data-led technologies – including the digital twin – for their numerous benefits.

Across the industrial sector, early investors are already reaping the benefits of this new technology. Here in Asia, SCG Chemicals, for example, achieved a transformative impact with the adoption of a unified digital reliability platform. Teams at the petrochemical leader benefitted from integrated, real-time visibility into various facets of operations, leading to improved operational efficiency and reduced unplanned downtime across the value chain. Thanks to this enhanced visibility and analytics models, SCG Chemicals was able to demonstrate exceptional results, including 100% plant reliability and an impressive nine-times return on investment (ROI) within just six months.

With disruption increasingly more commonplace, industrial leaders are looking to ramp up investments in industrial digital solutions.

94% of chemical industry executives agree that industrial AI solutions are required now more than ever for maintaining competitiveness in today’s challenging landscape. This sentiment aligns with Deloitte’s recent 2025 Chemical Industry Outlook study, which highlights innovation as critical for improving operational efficiencies, enhancing product performance, and meeting new sustainability goals. While the industry’s annual revenues dropped 8% in 2023, investments in R&D still grew 2%. Leaders are thinking long-term and taking measured steps to enhance their business’s longevity and sustainability.

End-to-end digitalization can positively impact the chemicals value chain, nearly doubling the average EBITDA earnings from 8.5% to 16%. A recent article from ABI Research shows Southeast Asian manufacturers are still in the early stages of digital transformation. At scale Industrial AI solutions will need to overcome the barriers of AI-ready data requiring new investments. Investments in Industry 4.0 solutions are expected to grow steadily, reaching US$301.6 billion in 2028 and making a 32.9% CAGR. This transformation is certain to ripple across other value chains supporting manufacturing, such as the chemicals industry.

Indeed, as companies and entire value chains are transforming digitally, they are increasingly looking to leverage their connected data ecosystems in order to achieve greater efficiency and sustainability.

By sharing and collaborating with other stakeholders across an open, cloud-based platform such as CONNECT, chemicals companies are empowered with rich real-time data insights, visualization, modelling and AI-driven analytics capabilities across the industrial ecosystem. Armed with this trusted intelligence, the entire value chain is empowered to make decisions and take action.

Investing in these data-led technologies and platforms can enable Malaysian chemicals companies to drive sustainability and deliver significant value gains. By leveraging real-time insights, advanced analytics, process optimization, and collaborating across the value chain, companies can minimize waste, increase efficiency, and drive innovation at every level.

---

Naveen Kumar is the Vice-President, Chemicals, Natural Resources, and Manufacturing at AVEVA