INDUSTRY INSIGHTThought Leadership

A strategic approach to carbon neutrality

Mitchell Toomey, VP, Sustainability and Responsible Care ®, American Chemistry Council, spoke to GPCA Insight about the chemical industry’s role in the energy transition, challenges around quantifying emissions across the value chain, and some of the key solutions advocated by ACC

What is the role of the chemical industry in the energy transition and how is the industry being affected by the move towards net-zero?

Chemistry is a crucial element in the clean energy transition and a lower emissions future. As a “lower emissions enabler,” the chemical industry is providing solutions that can help reduce GHG emissions, at our facilities, among our value chain stakeholders, and in the broader economy.

What are the challenges around quantifying emissions across the value chain, and how can we overcome them?

The chemical value chain is among the most difficult to quantify because of the presence and essentiality of chemicals in virtually all manufactured products and industrial sectors throughout the global economy. The business of chemistry consists of tens of thousands of chemicals, each with different upstream energy and feedstock supply chains, chemical and manufacturing processes, market segment, and end uses.

Even a single type of chemical or chemistry-enabled product can have very different scope 1, 2, and 3 emission footprints, based on the unique supply chains, processes, and uses and depending on the geographic, economic, technical, regulatory, and societal needs and constraints shaping its upstream and downstream value chain lifecycle.

In the United States, implementation of the Inflation Reduction Act, the Bipartisan Infrastructure Law, and other government incentives and regulatory programs have demonstrated that even separate agencies disagree on how to apply lifecycle analysis and carbon accounting across federal programs.

That’s why public/private sector cooperation is so important. ACC members, through company-specific sustainability programs and industry-wide initiatives like Responsible Care® and related efforts, are promoting research, communication, and collaboration with value chain members, voluntary standard setting organizations, and government experts to identify methodologies suitable for different chemistries and applications and promote science-based regulatory policies that advance shared goals of emissions reduction.

What needs to be done to drive lower CO2 and other emissions in the chemical sector? How does Responsible Care® support the industry’s efforts towards lowering emissions?

ACC is not aware of a single material, technology, or manufacturing innovation capable of achieving all the emissions abatement needs for the chemical manufacturing sector. In the U.S., ACC and its members are pursuing an all-of-the-above approach to industrial abatement and are encouraging federal and state policymakers to focus on the opportunities and constraints shaping different chemical subsectors and markets.

The U.S. Congress made a great start with its landmark investments in research, innovation, and deployment of lower-emission energy and industrial abatement technologies and infrastructure. The challenge now is implementation. Industry needs consistent, material- and technology-neutral incentive policies that promote current, emerging, and future solutions for both larger and smaller manufacturers, as well as a national network of infrastructure needed to support different abatement strategies.

Through Responsible Care®, national chemical associations around the world are working with their member companies to track and publicly report progress on energy efficiency and CO2 emissions reductions.

What are some of the key solutions that the American Chemistry Council advocates for in the carbon neutrality transition?

First, let me reemphasize that there is no known one solution that can meet the challenge of our diverse industry. Chemistry companies are among the leaders and participants in exploring the development and use of multiple innovative lower-emissions technologies, including:

  • CCS/CCUS: The chemical sector is a promising emerging and future market for utilization of captured CO2, where these innovations could help reduce emissions during the production of hydrogen, ammonia, and methanol, as well as high-value chemicals like ethylene, propylene, and aromatics. Captured CO2 is used as a feedstock to make building materials, and it has potential uses as a feedstock for fuels, chemicals, plastics, and a variety of commercial products.
  • Clean hydrogen can play a vital role in reducing emissions from some of the most energy-intensive sectors of our economy, and chemical manufacturers are exploring and developing hydrogen as part of their strategies to reduce emissions.
  • Energy efficiency, emissions avoidance, and technology enabling materials: Solar panels and wind turbines, advanced battery storage, electric vehicles, lightweight vehicle parts, and high-performance building materials are among the many energy-saving and renewable applications that rely on chemistry and plastics.
  • Combined Heat and Power (CHP) and other process efficiency technologies: The chemistry industry is a leader in the use of CHP, a highly efficient process for generating heat and electricity on-site. The U.S. Department of Energy has estimated the potential for over 73 GW of potential new capacity across more than 50,000 industrial sector sites. Almost one-third of this additional potential capacity comes from the chemical sector.
  • Lower-emissions electricity: In the future, much of the U.S. new generation capacity is expected to come from natural gas or renewables (e.g., wind, solar, hydropower). Use of renewable electricity to drive chemical processes, including conversion, separation, and purification, can offer a potential pathway toward lowering chemical industry emissions. Advanced nuclear technologies have significant potential, and the chemical industry is exploring these as well.
  • Process electrification: Electrification of steam crackers and other manufacturing processes could be transformational for the chemical industry. As electric grids gain access to industrial-scale, lower emissions energy like electric cracking, and other process electrification technologies, manufacturers can draw from these clean energy sources to heat steam cracker furnaces.

These reduction pathways can benefit from significant investments in new or expanded infrastructure to connect lower-emissions supply chains to the national chemical manufacturing footprint, and to connect products of chemistry to markets.

What is the role of renewable energy and investing in carbon capture, utilization, and storage (CCUS), particularly here in this region, which has the infrastructure and solar energy needed to capture CO2 emissions and generate more green energy for industrial operations?

Both have a role—renewable energy generation technologies like wind, solar, geothermal, and hydro help to reduce emissions from the power sector in areas with the suitable natural resource conditions and intermittency-balancing technologies and infrastructure to help ensure reliability. Not all areas of the world have access to the conditions that help support sole reliance on these traditional “renewable” sources for reliable, 24/7, 365 generation and distribution to help meet residential, commercial, and industrial needs.

That’s why it’s important to invest in complementary energy sources and emissions abatement technologies. CCUS can be particularly important as it helps to provide a solution to emission from natural gas and other conventional energy and manufacturing operations that will likely remain essential to our path to a lower-emissions future.

What is the role of collaboration, and developing financial and technical capabilities to drive towards carbon neutrality? Are companies ready today to take that step?

UN SDG 17 identifies collaboration as a necessary element to scaling emissions reduction or developing new innovations.

ACC members continue to welcome the opportunity to collaborate with governments, value chain stakeholders, and communities on our journey to becoming even better corporate stewards. Our members have been at the forefront of innovating to create new technologies and products that help solve the world’s most serious challenges.

Addressing these challenges is a massive undertaking for industry members and significant, consistent capital can make it possible. Chemical companies are developing strategies that prioritize funding for sustainability and R&D, and there is an increased engagement with finance sector stakeholders to acknowledge the long-term value of these investments in carbon reduction.

We know the communities where we operate expect more, and we understand the critical importance of sustainable manufacturing, which includes minimizing negative environmental consequences while conserving energy and natural resources. The chemical industry is working to be part of the solution in our communities by helping to safeguard the environment and innovating to help make products and processes safer.