Net-zero transition to cost petrochemical industry $759bn

26th May 2022


Petrochemicals could be made with almost no carbon emissions if the industry invests an extra $759bn (£604bn) by 2050, according to a new report from research firm BloombergNEF (BNEF).

The sector – which produces the high-value chemicals (HVCs) used to make plastics and many other manufactured goods – is rapidly becoming the largest driver of global oil demand.

HVCs are also responsible for up to 2% of global emissions, equivalent to aviation, and double the aluminium industry’s contribution.

However, BNEF's report outlines a pathway to net zero for the sector, with electrification and carbon capture and storage (CCS) playing a central role, even while total production grows.

The $759bn bill for new clean capacity and retrofits is roughly 1% of the $172trn estimated to be needed to decarbonise the global energy sector by 2050.

“Deploying these technologies will be expensive in the short term, but it could set the sector on a lower-cost decarbonisation path,” explained Ilhan Savut, sustainable materials analyst at BNEF.

“Given their long asset lifetimes, chemicals players must move quickly and fund net-zero projects as soon as possible, or risk getting locked out of key technologies. Investments today will be key to managing longer-term costs and pay dividends post-2035.”

The report outlines how, by 2050, CCS could be the cheapest option for net-zero petrochemicals and abate the emissions of 40% of HVC production.

Another 35% would rely on new electrified cracker designs, which could provide the only net-zero production route that is cost-competitive with conventional steam crackers.

The authors explain how CCS is a “unique opportunity” for integrated oil majors, which already have expertise in the technology and could accelerate cost declines.

However, they also highlight how the sector will face continued challenges when looking at the final products made from petrochemicals.

“While many net-zero targets do not cover Scope 3 emissions, customers and investors will link incinerated plastic to oil and chemicals companies, as they did with plastic waste,” said Julia Attwood, head of sustainable materials at BNEF.

“The whole supply chain is a plastic producer’s problem. A low-carbon petrochemical sector will require circular economy action.”

Image credit: iStock

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

Facing the climate emergency challenge in local government

It’s well recognised that the public sector has the opportunity to work towards a national net-zero landscape that goes well beyond improving on its own performance; it can also influence through procurement and can direct through policy.

19th March 2024

Read more

Dr Julie Riggs issues a call to arms to tackle a modern-day human tragedy

15th March 2024

Read more

Disgraced environmental consultant Peter Lovebrother is another month nearer retirement…

13th March 2024

Read more

The UK government’s carbon capture, usage and storage (CCUS) strategy is based on optimistic techno-economic assumptions that are now outdated, Carbon Tracker has warned.

13th March 2024

Read more

The UK’s new biodiversity net gain (BNG) requirements could create 15,000 hectares of woodlands, heath, grasslands, and wetlands and absorb 650,000 tonnes of carbon each year.

13th March 2024

Read more

The UK government’s latest Public Attitudes Tracker has found broad support for efforts to tackle climate change, although there are significant concerns that bills will rise.

13th March 2024

Read more

Multinational corporations are undermining their net-zero commitments with excessive air travel and no plans to reduce ‘the low hanging fruit’ of carbon footprints, a study by Transport & Environment has found.

13th March 2024

Read more

The UK government’s climate adaptation plans are ‘inadequate’ and falling ‘far short’ of what is required, the Climate Change Committee (CCC) has warned today.

13th March 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close