The fire that killed at least 79 people in a residential tower in London earlier this month has delivered a blow to an often overlooked section of the green industry that’s crucial to delivering energy efficiency.
Local authorities across the U.K. are ripping foam insulation from housing blocks after concerns that plastic cladding on the Grenfell Tower acted as an accelerant to the June 14 blaze. In addition to drawing attention to fire safety rules, Britain’s housing crisis and income inequality, the disaster has implications for the fight against global warming.
Buildings like Grenfell Tower were insulated to save energy and reduce greenhouse-gas emissions. Companies from Arconic Inc. to Cie. de Saint-Gobain SA, which supplied cladding and insulation being probed after the fire, are concerned the tragedy will mark a defining moment for the industry, said Nick Molho, executive director of the Aldersgate Group.
“A lot of the cladding failed safety tests,” Molho said, whose organization brings together company executives and policy makers to advise on environmental issues. “What we don’t know is how on earth that was allowed to happen in the first place.”
Efficiency — or squeezing more from each unit of energy whether it’s oil or electricity — has been an uncontroversial policy lever to use against global warming. The International Energy Agency, which advises 29 industrial nations, dubbed it the “first fuel” because saving energy is often the cheapest and easiest way to cut carbon-dioxide emissions. Some homeowners in old tower blocks where insulation is retrofitted may save as much as 750 pounds ($950) a year from their bills, according to the Green Alliance.
While there’s plenty of insulation that resists burning, the kind used at Grenfell was made of a flammable plastic and appears to have worsened a fire that started with a faulty refrigerator. Flames spread quickly up the cladding fixed to beautify the outside of the building and protect a layer of plastic foam insulation.
Burning plastic foam on a 24-story tower about the size of Grenfell would add the energy equivalent of 30,000 liters (7,900 gallons) of gasoline, according to a rough calculation by Rockwool International A/S, which makes non-flammable insulation and cladding only from stone wool.
“This is a global issue,” Rockwool Chief Executive Officer Jens Birgersson said by phone, noting other tower fires in Abu Dhabi and Istanbul linked to faulty cladding. “There have been many of these, but of course London is the city in Europe and of course, the fatalities here are horrendous.”
Observations like that have reopened a debate about the value of using insulation in the first place and whether stricter rules are needed to ban products that burn, especially those made from plastics.
On June 26, Saint Gobain, based in Courbevoie, France, suspended the sale of some insulation products that its Celotex Group Ltd. supplied to the company in charge of renovating Grenfell. The suspension covered products used on towers more than 18 meters tall, which is the reach of traditional fire-fighting equipment. Arconic also halted sales of some of its flammable products after media reports that its Reynobond PE was used in a renovation at Grenfell.
A spokesman for Celotex said that the insulation product was tested as part of a rainscreen cladding system and that it was safe in the tested conditions. Arconic in a statement on June 26 said it supplied components used by the contractor working on the Grenfell tower but that it wasn’t responsible for the installation or design.
Local governments have started removing materials on other blocks, and officials say safety tests on at least 95 towers have failed.
“We wish to discuss with the authorities how we can restore confidence in the products that we supply,” Celotex said in a statement on its website.
The industry that makes foam insulation says it doesn’t recognize Rockwool’s figures and is urging people to avoid “wild speculation” about the cause of the fire before the results of a government inquiry published.
“We owe it to everyone involved to establish the full facts,” said Simon Storer, CEO of the British Rigid Urethane Foam Manufacturers’ Association, which represents companies including Honeywell International Inc., Dow Chemical Co., BASF SE and Kingspan Plc. “We still don’t know that the cladding caused the fire. If we follow one route and take action and then find there were many other factors, then we are doing a disservice.”
Kingspan could be hurt by potential changes to U.K. building regulations or a shift in consumer preference, even though they don’t make the aluminium cladding with a polyethylene core that was installed on Grenfell tower, UBS AG analysts Gregor Kuglitsch and Miguel Borrega wrote in a note.
Regardless of the ultimate conclusions, the fire already has put a cloud over the efficiency business.
Unlike wind turbines, solar panels and electric cars that have become iconic clean-energy industries, insulation and measures to reduce energy use never registered highly in the consciousness of consumers. The companies involved in the industry are as diverse as Google Inc.’s Nest Labs Ltd., maker of a smart thermostat, and Johnson Controls International Plc, a maker of heating, ventilation and security systems for buildings.
Keeping policies that demand insulation is in line with U.K. Prime Minister Theresa May’s pledge to lower energy bills, yet industry insiders worry the government may react with a blunt tool that discourages many products. Some elements of the ruling Conservative Party and a right-wing research group called the Global Warming Policy Foundation are using the blaze to bolster their argument that climate change policies are having perverse and unintended consequences.
“This could put people off insulating,” said Andrew Warren, chairman of the British Energy Efficiency Federation, a government and industry forum.
Copyright 2017 Bloomberg.
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