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Being a backbone for many industries, the green transition of chemical industry will be of urgent importance. Chemical industry often operates in background as it is a large supplier to consumer-facing companies, not selling to consumers directly. Chemical industry however has taken active measures towards bringing about a green change. From 1990 to 2019, Figures from European Chemical Industry Council shows that greenhouse gas emissions from chemical industries Fell 54% even as output rose 47%.
In a study conducted by sustainability consultants from Systemiq, and Centre for Global Commons at University Of Tokyo proposed solutions that can make chemical industry carbon negative by 2040 and a carbon sink By 2050, even while doubling the turnover and creating more than 30mn new jobs.
Read more here : Planet Positive Chemicals
Learn how supply chain collaboration can reduce your scope 3 emissions.
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In an article published by Financial Times, three areas that have been identified that can rapidly reduce emissions include Recycling of plastic, targeted use of fertilisers and investment in green hydrogen Currently chemical value chains have very low recycling rates. Less than 14% of all plastic ever created has been recycled. It is estimated that circular economy based practises can reduce emissions by upto 30% by 2050 for non-ammonia chemicals
In a report published by World Economic Forum, initiatives across the World towards developing LCET (Low-Carbon Emitting Technologies) have been highlighted. The initiative focuses on 5 areas biomass utilization, carbon capture and utilization (CCU), electrification, hydrogen and waste processing. The successful development of LCETs depends on a supporting policy framework to a large extent. Therefore the LCET initiative members initiated a policy analysis to assess the extent of support the legislations in seven jurisdictions have on the main technology areas of the LCET.
One of the main learnings is that creation and stimulation of an appropriate marketplace for more sustainably produced goods appears to be the policy area with the most room for improvement on a global scale. Low-carbon products will start with higher operational expenditures than the standard competitors. Therefore policies supporting markets for carbon neutral and circular products are absolutely essential. This could take the form of green labels, setting green (public) procurement, and generally creating a market pull on non-fossil plastics by supporting the use of polymers based on sustainable carbons (recyclates, biomass and CO2-based).
Reducing production of virgin materials can be achieved by closing material loops, whether through re-use, mechanical or chemical recycling, or alternative uses in other applications. A positive effect is reduced littering as single-use, nonbiodegradable plastics and other virgin materials become more valuable. This can make circularity feasible across logistics, material separation, and recovery. But circularity does not necessarily mean producing the same product for the same application again. Often it is more effective and efficient to make other products or use them in other applications, such as using recycled windturbine blades as an additive for construction materials or giving lithium-ion batteries from mobile applications a second life as stationary power sources. Despite the potential of circularity, those materials make up only about 20% of the chemical industry and thus the impact is limited to that order of magnitude, even if almost all the materials are recirculated.
Achieving net zero will rely on much more expensive technologies than those used today, but in most regions this will not always be the case due to lower capex, lower feedstock cost, and lower energy cost. New technologies for olefins and aromatics are unlikely to compete with conventional ones even by 2050, after which the expected cost reductions due to scaling factors lead to a very different cost baseline. Technology costs are widely influenced by regional factors, as the cost of feedstock (especially hydrogen but also biomass) and energy have important regional variations, creating very different local economic outlooks. By 2050, out of the total capex needed for chemical production, roughly one third needs to be invested in retrofit and two thirds in greenfield production to achieve net zero. Maximizing the value of existing assets will remain the most effective short-term strategy. However, the lion’s share of investment will support additional capacity and necessarily lead to new build plants. Most of the expenditure will come from the need to enable ammonia (60-70% for LC-ME and LC-NFAX respectively). As ammonia becomes the strategic fuel of the shipping industry and broader enabler of a sustainable global economy, investment in electrolysis will represent the vast majority of capital expenditure by 2050. While the cost of this technology is expected to decrease significantly with scale, first movers are likely to have a significant advantage in a market driven by climate urgency, due to demand for low-emissions products.
The market will ultimately need to shift its perception of the value of chemicals, and it will not just be monetary in nature. The downstream impact of low carbon alternatives will result in a low single digit percentage increase in the production costs for most consumer products, therefore re-valued and re-priced low-emissions chemicals should be pioneered in premium markets that recognize their value and can absorb the true costs. Engaging in the new circular economy would enable the chemicals system to overcome its volume-based business model by participating in service-based and reuse type offerings. Currently, ownership of chemicals usually ends at point of sale to customers, after which no further value is derived by the chemicals sector. However, in a circular, resource efficient system there are a range of reuse models that would require retained ownership of the chemical through the consumer use phase, coupled with a service component. Read more about Chemicals-as-a-service model.
System is currently data protectionist and given high levels of product and value chain complexity, extremely hard to analyze or understand. Creating digital information about the entire chemicals system at each stage of the value chain around product, inputs, life cycle, outputs, impact on planetary boundaries/SDGs etc. then disclosing and storing this information publicly in a standardized format will create unprecedented transparency. This can allow the broad multitude of system policy makers, data players, startups, coalitions and service providers act more eectively in the transition.
Similar to how costs of green chemicals are dependent on local factors, the actual emissions that lie beyond organisational boundary are also dependent on the local factors or the suppliers and hence there is a need to shift to more supplier-specific method for accurate accounting.
We at Carboledger are working hard to improve accuracy of Scope 3 emissions. Reach out to us to understand more about our process and solutions.
Sustainable enterprises stand as beacons of responsible business practices. Increasing primary data share within their systems is a pivotal step to that end.
Read BlogA complete guide to conducting Life Cycle Analysis (LCA)
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