The industry and our customers regularly submit questions to the company. In order to address these inquiries, Simon Baker, president of Huntsman Building Solutions, wanted to answer as many of these most common questions. Among his insights, he shares his thoughts on material and cost challenges, drivers of spray foam demand in the U.S. and his overall optimism surrounding the product as a key solution for energy efficiency and climate change.

At the helm of one of the country’s largest spray foam manufacturers, you’re in a unique position to know what challenges and opportunities the industry is facing. What are some of the themes happening today within the industry?

I continue to be excited about the spray foam industry and where it is headed. Spray foam insulation and roofing are both exceptional solutions for the building envelope, reducing energy usage demands and the harmful emissions they cause. The material also optimizes durability and weather resiliency, as well as enhances overall comfort. It’s not a surprise that demand for spray foam is constantly increasing in the U.S., creating great opportunities for builders, contractors, remodelers and manufacturers alike.

That said, the spray foam industry today is also experiencing some challenges. For example, both material availability and shipping conditions are putting pressure on spray foam costs.

What type of material availability and shipping issues are afoot? Can you expand?

MDI, a material used in the A-side of spray foam, is at the center of some of our sector’s current stress. Demand for MDI grows incrementally each year, due in part to growing needs within the construction industry. Notably, MDI demand is also expanding tremendously across other unrelated industries. Yet, as MDI demand grows, supply has been tightening. Unfortunately, these factors combined are causing spray foam pricing to rise.

Aside from MDI, there are challenges with additional spray foam materials. Specifically, blowing agents, catalysts and fire retardants imported to the U.S. from Asia are all subject to increasing shipping costs. All these material dynamics are impacting both spray foam manufacturers and their contractor customers.

When you encounter these types of challenges as a manufacturer, how do you communicate them with your contractor customers?

It is our philosophy at Huntsman Building Solutions that transparency with our valued contractors is the right approach. It is obviously much easier to be open when all news is good. But, like any other building product category, the spray foam market in the U.S. is dependent on global trade, the supply chain and broader economic conditions, all of which can impact pricing and availability. We want our contractors to be as prepared as possible, with all facts, so they can plan and ensure their own business success. Ultimately, we want them to be able to serve and answer inquiries they get from their own customers about timelines, pricing, etc.

Is there anything else causing nervousness among spray foamers?

Yes, there has been some nervousness this year because of the sheer number of elections happening across the globe. Close to half of the world’s population is scheduled to vote before year-end in elections across 64 countries and the European Union. These elections can impact the supply chain and global trade. As an industry, we rely on the health of both, hence the uncertainty many are feeling.

Let’s talk about housing. This has been a challenging year for consumers in the market to buy new homes because of interest rates and resulting finance challenges. Has this impacted spray foam demand at all?

In some regards, finance conditions have actually helped spray foam. For example, HUD and USDA loan programs for homebuyers have recently increased their energy efficiency parameters for new homes. For new homes, and the buyers of those new homes, to qualify for the loans offered by these programs, the homes must now be built to a higher standard of energy efficiency. Similarly, Fannie Mae and Freddie Mac consumer finance programs, another big source for new home loans, may at some point initiate similar changes.

As a result of these increased efficiency requirements within finance programs, builders are enhancing their construction standards. They need to ensure that their qualifying buyer pool is as large as possible, and one way to do that is to make sure their homes qualify for as many consumer loan programs as possible. Thus, they are optimizing their homes to qualify them for these loans, and they are increasingly turning to spray foam insulation as a solution for energy efficiency. This is a great opportunity for both our industry’s manufacturers and contractors.

Photo courtesy of Huntsman Building Solutions

Are these finance programs the main reason that builders are increasing their use of spray foam insulation?

They are a big reason. However, there are additional drivers. For example, there has been a growing push for some time now to enhance building codes. Overall, building codes are becoming increasingly stringent and, to either meet or exceed new code mandates, builders must look at ways to optimize the building envelope. Because spray foam insulation outperforms so many other insulation options with its ability to act as a combined air, thermal and moisture barrier, offering up to a 50 percent reduction in energy consumption and passed-down homeowner energy costs, it’s a great solution for builders.

Additionally, the Inflation Reduction Act, which passed in 2022, brought forth some key tax incentives that builders are looking to take advantage of. They can do so by insulating their homes with spray foam. Section 45L figures prominently here, as it provides federal tax credits to builders delivering energy-efficient homes that meet applicable ENERGY STAR home program or DOE Zero Energy Ready Home program requirements. All these forces combined, including changing finance program requirements, stringent building codes and tax incentive opportunities, make a strong business case to builders for the delivery of high-performance homes insulated with spray foam.

Are manufacturers working with any of these builders?

[We can’t speak on behalf of other companies but] we work closely with homebuilders, delivering both product and guidance to assist them in their effort to build high-performance homes. In fact, we are currently engaged with many of the top 10 production homebuilders in the U.S. Our assistance is provided through our HBS Builder Program and resources.

Is there anything else that you feel is important?

As a company, as well as in conjunction with Institute for the Building Envelope, an industry association that promotes efficient building materials and practices, we regularly advocates among the country’s legislators in support of the spray foam industry. We believe, as one of the largest manufacturers, we share in the responsibility to help protect the health of our industry, and that’s why we prioritize these efforts.

Throughout the year, we face any number of proposed bills and regulations at either the state or federal level. If passed, many of these could make it harder for spray foam contractors to do what they do best in their respective regions. These bills are not always bad, however. Some are positive for our industry and, when those come about, we help to staunchly promote them passing. We invite contractors to join us in this effort. With a united industry voice, we can make a greater difference.