Politics, innovation and consumer demand drive markets for insulation boards worldwide and perhaps nowhere more than in energy-conscious Europe. Jane Denny report s on the key issues facing the UK insulation board industry today.
According to a report by UK-based polyurethane research agency IAL Consultants, in 2014 enough insulated board was produced worldwide to entirely cover the island of Tobago.
In addition, IAL’s researchers reported that insulation board demand is expected to grow by 20% over the next three years. The firm’s optimistic outlook is echoed by Chris Hall of the British Rigid Urethane Foam Manufacturers' Association (BRUFMA).
Hall, chief executive of the association, spoke to Urethanes Technology International magazine following the UK government’s July 2015 announcement of an independent review into energy efficiency within construction.
Speaking on behalf of BRUFMA members, drawn from PU/PIR insulation manufacturers and raw materials suppliers in the UK, Hall said: “The market at the moment is very buoyant and all of BRUFMA members are reasonably busy at present.”
Insulation market drivers
Trend drivers in the UK insulation market include legislation and regulation. However, innovation and new materials as well as consumer pressures have also contributed to the industry’s development.
Celotex’s head of technical Rob Warren told Urethanes Technology International magazine that regulatory change in the construction sector had been the greatest driver of the UK’s PIR insulated panel board market.
The UK government’s Part L document – which is part of The Building Regulations 2000 - is the current regulatory guide for the insulated panel market. It is one of about 15 government-approved papers that outline UK building codes and regulation for the conservation of fuel and power.
The document’s key purpose is the conservation of fuel and power and it relates to dwellings and commercial property, as well as new and existing buildings.
“It is paramount for those involved in the construction of buildings to comply with the regulations set out by the government in the Part L document,” he said.
Warren added that in terms of making a new home energy-efficient, builders will only do what they are required to do by law. This is why the Part L document is so important to the PU industry.
On a more technical subject, Warren said: “When you build a house you want to reduce loss of heat though the walls, floors and roofs as much as possible.”
The measurement for that is the U-Value, he said. The UK government’s Part L document gives guidance on the U-Values that need to be achieved by new buildings and “the lower the value the better,” according to Warren.
“Over the years, the Part L document has required U-Values to be lower and lower. Traditionally, this meant the material used to insulate the property became incrementally thicker,” Warren added.
“That is something that house builders absolutely do not want,” he said.
Warren said it was the need to balance the U-Value with a thickness limit that led house builders towards PIR insulation boards. He said today’s houses built to current regulations are required to be nearly 30% more efficient with respect to C02 emissions than those built in 2006. “There is a need to go for something that is thinner and better,” Warren said.
“When regulations change it can affect demand. The PIR industry takes particular note of changes to regulation and legislation because those sort of things have a direct relation to the company’s business model and future plans for investment.
The UK government’s recent U-turn on zero carbon homes by 2016 was a “disappointment.” “What we want is clarity and a long term policy plan that is not subject to last minute changes”, Warren added.
However, he said the move meant that at least the industry now knows that the regulation currently being built to, namely Part L 2013 is here to stay. “The government’s issue is that not enough homes are being built at all and it’s a case of ‘Let’s continue to build to current regulations’, and then we’ll see where we are at.
“It’s not unreasonable, and at least from an industry point of view it gives us some clarity as it won’t change for another few years,” Warren added.
However, Warren said the need to reduce energy consumption and C02 emissions is driving legislation which, he added, is “creating an open door for high performance PIR.”
New homes to be “nearly zero carbon by 2020”
C02 reduction is key to the EU policy in the comings years. The UK’s target for all new homes to meet the Zero Carbon Standard from 2016 came in advance of the EU’s Energy Performance of Buildings Directive (EPBD) target for all new buildings in the EU to be ‘Nearly Zero-Energy Buildings’ from 2020.
“All new buildings should meet the target of being nearly zero carbon by 2020 and the UK government cannot get out of that requirement,” Warren said.
“Therefore, you can expect to see that something will have to change in the UK before 2020,” he added. However, he said, the stipulations coming out of Europe are mostly about new buildings.
“The other side of this coin is existing buildings and how to re-regulate them. The issue of insulating extensions to existing properties is something that will have to be looked at,” said Warren.
Warren added: “From experience, you cannot give insulation away and the public are not really interested.”
He said that homeowners’ tendency to pay bills to energy suppliers automatically from their bank accounts meant the potential saving from energy efficiency was something which remained off their radar.
UK Green Deal
Until it was scrapped in July 2015, the UK’s Green Deal was a government-funded programme designed to increase the energy-efficiency of British homes.
The government said that low take-up by consumers, alongside its concerns about construction industry standards, had prompted the decision to withdraw Green Deal finance company funding.
With a reported 10,000 homeowners taking up the deal, the government said scrapping it was “a move to protect taxpayers”.
Amber Rudd, the UK government’s Department of Energy and Climate Change (DECC) minister, has promised that the government will work with the building industry and consumer groups on a new value-for-money approach.
Future schemes, DECC said in a statement, “must provide better value for money and support the goal of insulating a million more homes over the next five years.”
“It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works,” said Rudd.
“Together we can achieve this government’s ambition to make homes warmer and drive down bills for a million more homes by 2020 – and to do so at the best value for money for taxpayers,” Rudd added.
Energy Company Obligation
The UK government is continuing with the Energy Company Obligation (ECO) scheme. The ECO scheme, according to government papers, forces larger suppliers to provide support to low-income households.
In real terms this means they must provide information and guidance to customers on how to reduce their energy usage. According to government statistics, ECO delivered 97% of home improvements in the last two years.
According to the government’s statistics, there were 1,504,898 measures installed under ECO up to the end of June 2015.
A statement from DECC said: “Of all notified ECO measures installed to date, 38% were for cavity wall insulation, 27% were for loft insulation, and 21% were for boiler upgrades. All solid wall insulation types accounted for six per cent of measures installed.”
The longer-term future of the ECO scheme will be part of discussion around “a new, better-integrated policy,” the government statement said.
Energy Performance Certificate
An Energy Performance Certificate (EPC) is required for properties when constructed, sold or let within the UK and it provides details on the energy performance of the property and what residents can do to improve it.
According to Warren, the EPC is something that all home owners should be thinking about.
“It tells residents what they need to begin making informed decisions about the potential for saving money,” said warren.
UK energy efficiency – An independent review
The UK government has also commissioned an independent review of energy efficiency schemes. It will be led by Peter Bonfield, chief executive of BRE - a UK-based construction research body.
Bonfield, a materials engineer with a PhD in wind energy turbine blade design, held responsibility for the sustainability of construction for the London 2012 Olympics.
The review will look into standards, consumer protection and the enforcement of UK energy efficiency schemes. According to the government statement, it will also ensure the system “properly supports and protects consumers.”
BRUFMA’s Hall said the industry eagerly awaiting the review’s findings.
Hall described the UK government’s decision to end the Green Deal as “among a number of policies that have not been particularly helpful for the energy efficiency industry.”
“At the moment we have got this vacuum and the industry has been left scratching its corporate head,” he added.
However, Hall said: “The government has really not done much more than scrap a policy.
“It is all for scrapping things but it is not putting other policies in to replace the ones that have been scrapped. Because of that, we are left with a fairly uncertain future with regards to energy efficiency within the UK,” he added.
“We need a balanced approach and new focus,” Hall said.
“We need to save more of the energy that we already produce. UK prime minster David Cameron’s focus seems to be on securing the nuclear industry, and he seems to quite like promoting fracking.”
Hall warned that EU energy regulations were on their way that will force the UK to deal with energy efficiency. “Even if we come out of the EU with Brexit, the forthcoming environmental expectations are responsibilities that we cannot opt out of or abdicate from,” added Hall.
On the face of it, Hall said with reference to Rudd’s comments in July, “with all the policy directions that the government is currently making it will be harder for the UK to meet the EU targets.”
Warren agrees it will be harder but also said “The onus to save energy is very much on the consumer.
“Unless consumers do something to reduce the amount of energy they consume they will continue to keep paying higher and higher bills.
“The best way to achieve this is to ensure that the fabric of the home is well insulated to reduce the heating demand and that heating systems and controls are as efficient as possible.” Warren added.
U-Value and energy-efficiency performance measurement
U-Value is a measure of heat loss through a structural element. It is calculated on the rate at which heat transfers through 1 square metre of a structure, where the temperature difference between the inner and outer face is 1o Celsius.
According to Warren, eleven years ago the typical LAMDA for PIR was 0.023 W/mK – it has gone down to 0.021 W/mK since, he said - the lower the value, the better the insulating capacity of the product (for a given thickness).
Celotex PIR pioneer
Rob Warren, head of technical at Celotex, said it was his East of England-based firm that pioneered PIR insulation boards in 1979.
The company records its history like this, he said: ““The basic principles of PIR foam had been developed in the UK by ICI, then a major supplier of chemicals to the polyurethanes Industry.
“However, nobody had succeeded in transferring the laboratory chemistry to a full scale manufacturing plant. By throwing away the book, and developing a new (free rise) production process from the ground up, Celotex succeeded in bringing to market the world’s first true high index PIR foam.
“In a separate bay of the firm’s Hadleigh facility, construction of the new Celotex PIR foam plant started in January 1979 and the plant was commissioned in March 1980,” Warren added.
Within its 90-year operating history, it has seen a great deal of change in the insulation industry Warren said.
Today, Celotex manufactures PIR thermal insulation boards as thin as 12mm and up to 200mm thick. This is achieved in a high speed continuous process.
He added that: “The switch away from mineral glass and wool fibre for insulation creates a very healthy environment for companies offering PU-based insulation products,” said Warren.
The buoyancy of the smaller players in the European insulation market is being mirrored by the world’s biggest insulation panel maker, Ireland-based Kingspan Group.
Kingspan reported record gains in the first half of 2015 with revenue at €1.24bn – a jump of 39% on the first half of the previous year.
While some of the firm’s most recent acquisitions - Joris Ide and Vicwest – respectively contributed 26% to sales growth and 31% to trading profit growth in the period, its pre-acquisition growth rate was calculated at 13%.
According to Kingspan, 2014’s key drivers included energy efficiency and conversion. The company said 85% of its sales were driven by the need to cut down consumer bills and C02 emissions.
Europe and the UK accounted for over 70% of Kingspan’s sales, with a roughly half share of the total European market each.