Chemicals industry must transform to enable sustainability

Chemical industry

The global chemicals industry accounts for around four per cent of global greenhouse gas emissions, and must end its fossil dependency to become a planet-positive force, according to a major new report from Systemiq, the system change company, and the Center for Global Commons at the University of Tokyo.

Without embracing a more circular, low emissions operating model, the industry faces reputational and regulatory risk and may lose its social license to operate, the report warns.

The Planet Positive Chemicals report provides an unprecedented blueprint for the future of the chemical industry, which is worth $4.7 trillion dollars in annual revenues and provides the chemicals that are essential to all sectors of the economy, from packaging and consumer goods to construction and fertilisers. It says the industry currently has multiple harmful impacts on our planet, including high carbon emissions and pollution, and its action on climate is currently lagging behind other sectors. 

The report identifies the need for radical interventions on both supply and demand sides for the industry to operate within planetary boundaries. Its findings show that chemical production would need to double by 2050 to enable a sustainable global economy, with rapid growth in ammonia (around 440 per cent) mainly for use as a sustainable shipping fuel and methanol to create plastic without using fossil sources. Replacing fossil feedstocks could also make the industry the largest global consumer of green hydrogen (up to half of all demand by 2050), driving scale-up of this critical enabler of the energy transition.

Alternatively, up to 640 million tonnes of CCS capacity will be needed every year by 2050 if the industry does not move away from fossil feedstocks. The industry could become carbon negative by the early 2040s and a carbon sink by 2050, using CO2 from the air and biomass to make plastic and storing carbon underground at end-of-life.

Chad Holliday, former CEO of the global chemical company DuPont and former chairman of Shell, said: “We need realistic and immediate action from industry on the climate goals agreed at an international level. We want to see ambitious companies grabbing the opportunities represented by the global net zero transition, and as the former CEO of a chemicals company, I firmly believe a planet positive chemicals industry is possible and this is a pivotal moment for the industry to redefine its future.”

Naoko Ishii, executive vice president, director for the Center for Global Commons at the University of Tokyo, said: “To avoid the collapse of the complex and interdependent Earth systems on which humanity, including our economic prosperity depends, we need to transform our social and economic systems and our lifestyles. The chemical industry has an outsized role to play, with its products used across many sectors and ubiquitous in modern life. The opportunity is clear: to bring the system back within the planetary boundaries, including net zero GHG and become a contributor to the Global Commons. We hope this report will open the debate about how the chemical industry can transform itself to grasp that opportunity.”

The Planet-Positive Chemicals report aims to help the industry and policy makers unite around a common view of the path ahead and accelerate the transition to a sustainable model of operation. It suggests ten key actions that could transform the system, including establishing a global charter of transition principles, and a first-movers coalition to seed markets for net zero chemicals.

The report authors have made all their modelling and analysis publicly available, and plan to host a virtual discussion on 10 October 2022 to explore what is needed from the industry, its customers, policymakers and the investment community to make the transition happen.

Business leader and campaigner Paul Polman, who served as CEO of Unilever and helped design theSDGs, said: “Transformational leadership is critical to the delivery of our global sustainability goals. We urgently need courageous business leaders who profit by fixing the world’s problems rather than creating them – and this report is a clarion call to the chemical industry to do just that. It sets out tangible pathways for the sector to become the enabler of a sustainable economy, a climate solution and a planet-positive system – but in order to access the growth and value associated with this future path, the industry must decouple itself from the fossil fuel dependence of the past. This marks the beginning of an urgent and business-critical conversation for the industry and its value chain.”

Guido Schmidt-Traub, Managing Partner of Systemiq, commented: “The chemical industry underpins every modern economy, but it must change profoundly across its entire value chain to meet the objectives of the Paris Agreement. Importantly, these changes are eminently feasible using proven technologies outlined in this report. The recommendations for policymakers, the industry, and the investment community are practical and actionable. Systemiq and our partners stand ready to support discussions about how the chemical industry can become a driver of a net-zero and nature-positive economy.”    

Others have also viewed

Adionics secures $27 million in Series B funding

Adionics has been developing a DLE process that improves global lithium production. This technology not ...

Schneider Electric and Enel support call for energy efficiency and grid action 

European electricity technology giants Schneider Electric and Enel joined the International Energy Agency (IEA) in ...

Ubiquity secures green financing to accelerate open-access fibre network deployments

Ubiquity, a U.S. digital infrastructure owner, developer, and operator focused on developing open access fibre-to-the-premise ...

Maire’s NextChem partners with Clariant for next-gen catalyst

MAIRE S.p.A. announces that Conser S.p.A., part of MAIRE Sustainable Technology Solutions business unit led ...