Reducing the chemical industry’s carbon emissions will be crucial if we are to reach net zero, says Roger Wareing. How can it be done?
Responsible for around 4% of global GDP and linked to more than 96% of all manufactured goods, the chemical industry underpins our economy and yet remains largely out of view. It faces a perfect storm of sustainability challenges in the transition to a net-zero sustainable economy, including its predominantly fossil fuel-based raw materials, energy-intensive processes, complex value chains, long product lifetimes and disposal issues. Does this make the chemical industry the elephant in the room for sustainability?
The problem with chemicals
The chemical industry is responsible for virtually everything we come into contact with. A relatively small number of basic chemicals are further processed into chemical intermediates and then into one of more than 22,000 substances currently registered in the UK and Europe. These are formulated into everyday products ranging from textiles and plastics to paints and dyes, making the industry responsible for around 96% of all manufactured goods. The industry’s high energy intensity and reliance on fossil fuel-based raw materials comes with a hefty climate footprint.
“The industry’s high energy intensity and reliance on fossil fuel-based raw materials comes with a hefty climate footprint”
Based on the latest carbon budgets by the Intergovernmental Panel on Climate Change and analysis carried out for a recent Center for Global Commons report, Planet Positive Chemicals: Pathways for the chemical industry to enable a sustainable global economy, the chemical system’s combined emissions (including Scope 3) mean that if this industry continues on its current trajectory, it will be responsible for 24-38% of the total 2020-50 global carbon budget for a scenario in which we limit global warming to 1.5°C. To put it another way, the current global annual emissions rate of 59 gigatons of carbon per year will exhaust the budget for 1.5°C of global warming shortly before 2030, and for 2°C by 2040. In this scenario, we will experience 4°C of warming by 2050.
Chemicals also interlink with other planetary boundaries, including the release of novel entities such as plastics and chemical pollution, as well as bio-geochemical flows into the biosphere (for example, the nitrogen flows contained in ammonia-based fertiliser run-off). According to the Stockholm Resilience Centre, both these boundaries have already been exceeded. Even more fundamentally, if the chemical system cannot transition to a sustainable operation model, it will be even more challenging for other parts of the global economy to be truly sustainable. In its Planet Positive Chemicals report, the Center for Global Commons says that the net-zero transition presents huge growth opportunities for chemicals. It optimistically predicts that annual production volumes could grow by 2.5 times by 2050 while meeting Paris commitments, with parts of the industry possibly becoming carbon-negative (see Planet Positive Chemicals: Headline findings, below).
PLANET POSITIVE CHEMICALS: HEADLINE FINDINGS
1) The net-zero transition is an opportunity for the chemical system to grow annual production volumes by 2.5 times by 2050, enable transitions to net-zero emissions in other systems and create up to 29 million new jobs globally.
2) Even with this growth trajectory, Scope 1, 2 and 3 greenhouse gas emissions from the system could still realistically align with the Paris Agreement.
3) With new manufacturing approaches based on bio-based feedstock and direct air-captured CO2, there is a technically feasible pathway for the non-ammonia chemical system to become a ‘carbon sink’ that absorbs 500 million tonnes (net) of CO2 per year by 2050.
One area set for phenomenal growth is (green) hydrogen. The International Energy Agency predicts that nearly 200 million tonnes of hydrogen will be needed by 2030 if we are to stay on track for net-zero emissions by 2050 – more than double the amount of hydrogen produced in 2021. There is also an opportunity for the chemical industry to provide additional value to society through circularity. Planet Positive Chemicals argues that ‘going circular’ could reduce total demand in the system by up to 31%, for example by reducing the need for virgin chemicals – especially plastics. It even champions the possibility that the industry could become a carbon sink via a technically feasible pathway for the non-ammonia chemical system to absorb 500 million tonnes (net) of CO2 per year by 2050. It is clear, then, that there is a significant opportunity for the industry to play a leading role in the net-zero transition, both directly and indirectly.
Pathways and challenges
The road to net zero is not straightforward, however. Specifically, the Planet Positive Chemicals report’s authors identify three key uncertainties for the industry as it wrestles with its sustainability challenges:
- Demand for net-zero chemicals
- The most suitable technology for producing them, including scarcity of feedstocks, maturity of technologies and ability to scale
- The best pathway to achieve overall net zero.
To address these, the report models and explores scenarios and pathways for reaching net-zero Scope 1, 2 and 3 emissions in the global chemicals system as part of a planet-positive model. This analysis shows that a system-wide approach could result in a carbon-negative chemical industry by 2050, in line with Paris timescales. Success, though, will require nothing short of a new industry-wide operating mode with urgent and ambitious transformations in low-carbon chemical manufacturing, including renewable and/or bio-based feedstocks, aggressive demand-side circular economy approaches in downstream value chains, and a role for direct air-captured CO2. This will require significant challenges to be overcome, both externally and internally.
On the positive side, there is growing recognition and support in the wider economy for increasing circularity. For example, a group of consumer goods firms, including Danone, Unilever, Mars and PepsiCo, plan to collectively buy 800,000 chemically recycled packaging materials in 2030, which would reduce demand for virgin chemicals. Others are more cautious, however, especially when looking to replace traditional feedstocks with largely untested bio-based ones; this is unfamiliar territory and may have unintended consequences, most notably around land use.
Walking the walk
How is the industry responding to the challenge? According to data collated by the European Chemical Industry Council, total greenhouse gas emissions across the European chemical industry fell by 54% between 1990 and 2019. While this sounds impressive, progress appears to have stalled more recently, with virtually no reduction recorded in 2014 to 2019. Perhaps of greater concern is that, as of August 2022, only 17 industry players had committed to best-practice net-zero targets in line with a 1.5°C future through the Science Based Targets initiative – just 17% of the companies in the sector, and less than half the global cross-sector average of 35%. The reason for this is unclear, but it may be linked to the industry not feeling the same level of customer pressure as other sectors. One thing is clear: as the world grapples with the transition to a net-zero sustainable future, low-carbon chemicals will become increasingly critical, and the industry can expect far greater public scrutiny than it has been used to. Can it rise to the challenge?
Roger Wareing, PIEMA, is an independent sustainability consultant and former industrial chemist