Solutions to chemical industry’s decarbonization problem far off
Depends on new, not-yet-mass scale tech
Climate scientists have repeatedly called for swift and bold action
The International Panel on Climate Change (IPCC), the world’s authoritative body on the subject, will release its Sixth Assessment Report (AR6) in 2022. It will be the definitive scientific statement on climate change, though the IPCC’s message has already been made quite clearly during the past years.
The Fifth Assessment Report (AR5), released in 2014, drove world leaders to sign the Paris Climate Accord in 2015, an international treaty that obliged their countries to limit global warming below 2 degrees Celsius, and preferably closer to 1.5 degrees Celsius by 2050.
The first of three working groups made their contribution to AR6 in August, which assessed the physical evidence for climate change. Almost 4,000 pages long, it was written by more than 200 scientists from 66 countries, based on more than 14,000 scientific papers, and agreed upon, line-by-line, by 195 governments.
Beyond saying that human activities will cause climate change, the report said they are causing today’s extreme climate and weather events.
“Unless there are immediate, rapid, and large-scale reductions in greenhouse gas emissions, limiting warming to 1.5 degrees Celsius will be beyond reach,” said the IPCC, ratcheting up the urgent call to action.
Secretary General of the United Nations Antonio Guterres called it a “code red for humanity.”
Chemical sector among ‘hard to abate’ industries
Along with cement, iron, and steel, the chemical sector accounts for about 20 per cent of global greenhouse gas emissions, according to the International Energy Agency (IEA). Reducing emissions from these sectors in order to mitigate the effects of climate change is critical, but it is also notoriously difficult.
The chemicals sector is totally bound up in fossil fuels, and our world is totally bound up in the chemical sector. “Decarbonization is particularly challenging for the chemicals sector, which sits at the centre of the connections between the products that people use in everyday life and the raw materials used to manufacture them,” says EY.
Deloitte says, “Today’s chemical industry is built on hydrocarbons, which are used both as a feedstock and as a source of energy.” The chemicals sector is responsible for 11 per cent of the global primary demand for oil and 8 per cent for gas, according to the IEA, which then become embedded in products like plastic or ammonia and ethanol. The IEA also says that demand will drive the sector to account for over a third of oil demand in 2030, and nearly half in 2050.
A study from the National Academy of Sciences says chemical production will be the single biggest driver of global oil consumption by 2030.
Martin Brudenmuller, chief technology officer and chairman of the board of BASF, the world’s largest chemicals company, has put it more succinctly: “Our products are made up of 50% carbon, so a carbon-free chemical industry is simply not possible.”
Prescription: More energy efficiency, more renewable energy, and more innovation
While turning the chemicals industry carbon-free might still be unconscionable to the industry itself, it does seem alive to the problem and to future potential. After all, pressure for decarbonization is coming from inside and outside companies, as well as from governments, regulators, and investors.
Deloitte points out that US chemical companies lag in disclosing net-zero climate goals “despite demonstrations across industry sectors that these targets boost profitability, improve investor confidence, drive innovation, reduce regulatory uncertainty and strengthen brand reputation.”
BASF, for its part then, is setting terms. “Although the chemical industry cannot avoid carbon,” Brudenmuller continued in that same article, “it can use carbon more efficiently and reduce its greenhouse gas emissions. Similarly, an array of technologies will be needed to achieve a climate-neutral future.”
Few scenarios that envision emissions dropping in the chemicals sector rely only on utilizing existing commercial technologies. Most include some combination of increased energy efficiency, increased use of renewable energy, and new, or young, technologies, such as hydrogen, bioenergy, geothermal, biomass, heat pumps.
Regularly, decarbonization scenarios depend on carbon capture utilization and/or storage (CCUS; CCU; CCS), which involves collecting carbon dioxide at the point of emission and either recycling it into a different process or storing it, usually underground.
A July, 2021, study from researchers at MIT, says that CCS alone could enable continued growth while eliminating nearly all the CO2 emissions generated into the atmosphere. “Carbon capture can achieve 14 per cent of the global GHG reduction needed by 2050 and is viewed as the only practical way to achieve deep decarbonization,” says the U.S.-based Center for Climate and Energy Solutions. A 2017 study for the European Commission came to a similar conclusion, except that emissions only decreased, while energy consumption continued to climb.
The transition toward the IEA’s Clean Technology Scenario (CTS), which is a way toward net-zero emissions by 2050, is “led by carbon capture, utilisation and storage (CCUS) coal to gas feedstock shifts, and energy effiency.”
At the same time, even the IEA recognizes that CCUS is not ready to play a major role in decarbonization. “CCUS have been operating for decades in certain industries, but they are still a work in progress in the areas that need them most,” says the IEA in its CCUS in Clean Energy Transitions Report. It implores governments and industry to ramp up CCUS deployment in the next decade.
Indeed, as the science lays out the urgency of decreasing emissions immediately, it is a hard feat for industries such as chemicals. So long as fossil fuels comprise the core of their business, while CCUS remains a long-term (and not inevitable) solution, they will be hindered in their transition to decarbonization.
“2021 Chemical Industry Outlook.” Deloitte United States, 26 Mar. 2021, https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/chemical-industry-outlook.html.
“The 2030 Decarbonization Challenge.” Deloitte United States, 2020. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/energy-resources/us-eri-chemicals-decarbonization.pdf.
“The 21st-Century Cement Plant: Greener and More Connected.” McKinsey & Company, McKinsey & Company, 4 Nov. 2020, https://www.mckinsey.com/industries/chemicals/our-insights/the-21st-century-cement-plant-greener-and-more-connected.
Accenture CEFIC Report – Accenture | Let There Be Change. https://www.accenture.com/us-en/_acnmedia/pdf-45/accenture-cefic-report-exec-summary.pdf.
“AR6 Climate Change 2021: The Physical Science Basis.” IPCC, 9 Aug. 2021, https://www.ipcc.ch/report/ar6/wg1/.
Brudermuller, Martin. “How to Build a More Climate-Friendly Chemical Industry.” World Economic Forum, 21 Jan. 2020, https://www.weforum.org/agenda/2020/01/how-to-build-a-more-climate-friendly-chemical-industry/.
“Carbon Capture.” Center for Climate and Energy Solutions, 27 May 2021, https://www.c2es.org/content/carbon-capture/.
“Carbon Dioxide Capture and Storage.” IPCC, 2005, https://www.ipcc.ch/site/assets/uploads/2018/03/srccs_wholereport-1.pdf.
Dworztman, Mark. “Reducing Industrial Carbon Emissions.” MIT News | Massachusetts Institute of Technology, 21 July 2021, https://news.mit.edu/2021/reducing-emissions-decarbonizing-industry-0721.
“Energy Consumption.” Cefic.org, 29 Mar. 2021, https://cefic.org/a-pillar-of-the-european-economy/facts-and-figures-of-the-european-chemical-industry/energy-consumption/.
“Energy Is at the Heart of the Solution to the Climate Challenge.” IPCC, https://www.ipcc.ch/2020/07/31/energy-climatechallenge/.
Hundertmark, Thomas, et al. “How Plastics Waste Recycling Could Transform the Chemical Industry.” McKinsey & Company, McKinsey & Company, 28 Oct. 2019, https://www.mckinsey.com/industries/chemicals/our-insights/how-plastics-waste-recycling-could-transform-the-chemical-industry.
Iea. “CCUS in Clean Energy Transitions – Analysis.” IEA, Sept. 2020, https://www.iea.org/reports/ccus-in-clean-energy-transitions.
Iea. “Chemicals – Analysis.” IEA, 1 Nov. 2021, https://www.iea.org/reports/chemicals-2.
Iea. “From Energy to Chemicals – Analysis.” IEA, 1 Oct. 2018, https://www.iea.org/commentaries/from-energy-to-chemicals.
Iea. “The Future of Petrochemicals – Analysis.” IEA, https://www.iea.org/reports/the-future-of-petrochemicals.
“IPCC Circulates Final Draft of Working Group II Report to Governments for Comment.” IPCC, 1 Oct. 2021, https://www.ipcc.ch/2021/10/01/ipcc-wgii-ar6-final-draft/.
Kirilyuk, Mikhail, et al. “The European Recycling Landscape–the Quiet before the Storm?” McKinsey & Company, McKinsey & Company, 13 Aug. 2020, https://www.mckinsey.com/industries/chemicals/our-insights/the-european-recycling-landscape-the-quiet-before-the-storm.
Kätelhön, Arne, et al. “Climate Change Mitigation Potential of Carbon Capture and Utilization in the Chemical Industry.” PNAS, National Academy of Sciences, 4 June 2019, https://www.pnas.org/content/116/23/11187.
Mazzotti, Marco, et al. “The Role of Carbon Capture and Utilization, Carbon Capture and Storage, and Biomass to Enable a Net-Zero-CO2 Emissions Chemical Industry.” ACS Publications, 4 Mar. 2020, https://pubs.acs.org/doi/10.1021/acs.iecr.9b06579.
Moya Rivera, Jose Antonio, and Aikaterini Boulamanti. “Energy Efficiency and GHG Emissions: Prospective Scenarios for the Chemical and Petrochemical Industry.” JRC Publications Repository, https://publications.jrc.ec.europa.eu/repository/handle/JRC105767.
“Net Zero by 2050: A Roadmap for the Energy Sector.” IEA, May 2021, https://iea.blob.core.windows.net/assets/7ebafc81-74ed-412b-9c60-5cc32c8396e4/NetZeroby2050-ARoadmapfortheGlobalEnergySector-SummaryforPolicyMakers_CORR.pdf.
“Secretary-General’s Statement on the IPCC Working Group 1 Report on the Physical Science Basis of the Sixth Assessment.” United Nations, United Nations, 9 Aug. 2021, https://www.un.org/sg/en/content/secretary-generals-statement-the-ipcc-working-group-1-report-the-physical-science-basis-of-the-sixth-assessment.
“The State of the Chemical Industry–It Is Getting More Complex.” McKinsey & Company, McKinsey & Company, 10 Nov. 2020, https://www.mckinsey.com/industries/chemicals/our-insights/the-state-of-the-chemical-industry-it-is-getting-more-complex.
Weick, Mark, et al. “US Perspective – How Can Net Zero in Chemicals Be Profitable.” EY, EY, 24 May 2021, https://www.ey.com/en_us/chemicals/how-can-net-zero-in-chemicals-be-profitable.
- Analyses and Forecasts
- Industry Sectors
- IndustryInform Service
- Scientific Advances
- Value of Data
5G advanced manufacturing AI analytics artificial intelligence automation big data bigdata cleanenergy cleangrid cloud computing coal connectivity data decarbonization digital twins digitization energy futureofwork IIoT industrialrobotics industrial robotics industry4.0 Industry 4.0 internetofthings Internet of Things (IoT) IoT machinelearning machine learning mining naturallanguageprocessing networks oil plastic policy renewables reshoring risks robotics sensors solar telecommunications trends wind zeroemissions