Global chemical giants lead the industry toward carbon neutrality

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In 2021, as the world economy recovered, global energy-related carbon dioxide emissions increased by 6% compared to 2020, reaching 36.3 billion tons – the highest level on record*. In 2021, the absolute increase in global carbon dioxide emissions exceeded 2 billion tons, marking the largest increase on record*. Given the emission intensity of the chemical industry and the role of chemical materials and technologies in low-carbon solutions, the chemical industry is key to carbon neutrality. Under the pressure of carbon emission reductions, global chemical giants are responding proactively. Recently, a survey by Chemical Week showed that among the top 100 chemical companies in terms of annual sales revenue, 69% have committed to achieving carbon neutrality by 2050, while 86% have set interim emission reduction targets for 2030. Global chemical giants remain leaders in achieving carbon neutrality in the industry. https://www.ricite.com/static/upload/image/20220825/1661390408748099.jpg The emission reduction targets in the chemical industry remain insufficient. According to a survey by Chemical Week, the chemical industry is highly integrated with the three major greenhouse gas-emitting sectors, namely transportation, energy, and industry*. The chemical industry consumes over 10% of fossil fuels and emits 29 billion tons of carbon dioxide equivalent each year—more than all countries except China and the United States**. The Intergovernmental Panel on Climate Change (IPCC) stated in its report \"Climate Change 2022: Mitigation of Climate Change\" that to limit warming to 1.5°C, the world must reach a peak in greenhouse gas emissions by 2025 and reduce such emissions by 43% by 2030. Therefore, the chemical industry bears the heavy responsibility of reducing global carbon emissions. https://www.ricite.com/static/upload/image/20220825/1661390297212359.jpg However, the climate targets set by chemical companies at present still do not meet the requirements of the IPCC. Among the 87 chemical giants that have set emission reduction targets for 2030, only 24 have set their greenhouse gas reduction targets at 43% or more. Among the 28 U.S. companies, 64% have committed to achieving net-zero emissions by 2050; 68% of companies in the Asia-Pacific region have pledged to do the same by 2050, while 77% of companies in Europe, the Middle East, and Africa have committed to achieving net-zero emissions by that date. Leading enterprises propose technical directions. Among all enterprises, chemical giants with *high sales figures* and *strong R&D capabilities*, such as BASF and Dow, are the main providers of carbon reduction technologies and investments. Among them, Dow Chemical plans to invest around $1 billion per year in upgrading and decarbonizing its global assets, while BASF will invest more than 4 billion euros in achieving its climate protection goals by 2030. Technically, Dow and BASF are the pioneers of the two major technical approaches. Dow has chosen carbon capture, utilization, and storage (CCUS) technologies and clean hydrogen to reduce carbon emissions. The company announced that CCUS technology will be used to build the world’s first zero-emission ethylene cracker in Fort Saskatchewan, Alberta, Canada. In addition, Dow announced a three-phase plan for its petrochemical plant in Terneuzen, the Netherlands, which will utilize clean hydrogen and other innovative technologies to reduce carbon dioxide emissions by over 40% by 2030, thereby accelerating progress toward achieving carbon neutrality by 2050. BASF said it will focus on low-carbon production technologies, such as the development of electrically heated steam crackers, low-emission hydrogen production technologies, electro-heat pumps for steam generation, and renewable energy. BASF is currently implementing over 250 technical and organizational projects to reduce energy consumption and enhance competitiveness. However, it typically takes over 10 years for the commercialization of chemical industry innovations; related technologies may not be widely applied until after 2030. Energy transition is of paramount importance. Lars Kiso, President of BASF’s Net Zero Business, said that the energy transition serves not only as a stabilizing force but also as the anchor that enables the chemical industry to move toward zero emissions. “Chemistry is the transformation of substances. All these processes require energy, and this law will not change fundamentally in the future, but we can change the way we produce energy. ”However, the cost of renewable energy remains a concern for chemical giants, which requires further efforts from them. Data provided by the IPCC show that over the past 10 years, the cost of clean energy sources such as solar power, wind power, and batteries has dropped by 85%, but it remains an unaffordable price for businesses. Dow states that it is difficult to predict when, or if, next-generation clean energy sources such as green hydrogen and modular nuclear power will achieve cost parity. BASF believes that in order to enable competitive use, green electricity prices in Europe need to be kept within the range of 40–50 euros/MWh. https://www.ricite.com/static/upload/image/20220825/1661390453102068.jpghttps://www.ricite.com/static/upload/image/20220825/1661390520129728.jpgDecarbonization is a huge and multifaceted challenge: companies must become climate-neutral, digital, and capable of recycling at the same time. However, since the chemical industry must deal with upfront costs, producing products with low carbon dioxide emissions will require greater effort and higher costs. “Therefore, we need a new form of collaboration among government, business, and society. It is foreseeable that *end customers will have to be prepared to pay a higher price. ”Kiso said.