INDUSTRY INSIGHTThought Leadership

The journey to net-zero

In a special interview, GPCA Insight caught up with Dr. Fahad Al-Sherehy, VP, Corporate Sustainability, SABIC and Chairman, Research & Innovation Committee, GPCA, about the opportunities and progress on the road to net-zero and his plans for leading the Committee as its newly elected Chairman

How has the climate dialogue evolved today and what is the role of the chemical industry in enabling a climate positive future?

The climate dialogue has evolved to such a critical stage that all sectors of the economy are speeding up their transformation, where our chemical industry is playing a leading role through collaboration and innovation.

The chemical industry is called “the mother industry of all industries”, depicting the depth and width that it impacts national economy and people’s livelihood. We supply materials that make the products that are part of our everyday lives, and which are essential in sectors such as food packaging and distribution, medical and health, and energy and transportation. More than 90% of everyday products contain chemicals.

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According to McKinsey & Company, two-thirds of the largest chemical end-users in Europe—including players in the automotive, food, and personal-care industries—have committed to reducing greenhouse-gas emissions by 2030, and more than a third of them have pledged to reach net-zero emissions by 2050. We are uniquely positioned to deliver new, sustainable products and solutions to help our customers to achieve their climate goals.

Take one of SABIC’s example to show how our industry is seeking to enable a climate positive future. We collaborated with Solarge, a circular solar panel supplier, and successfully deployed lightweight, circular photovoltaic (PV) panels. By processing plastic wastes as feedstock through chemical recycling and our material innovation,  the new product provides over 50% weight reduction and over 25% carbon footprint reduction, and allows multiple-location deployment.

What does SABIC’s 2050 Carbon Neutral Commitment entail and how do you plan to achieve it?

Focusing on our direct and indirect emissions generated by our own production (Scope 1 & Scope 2), we aim to reduce our greenhouse gas emissions by 2030 worldwide by 20% compared to 2018. In addition, we aim to collaborate with our partners in initiatives to reduce indirect Scope 3 emissions along the value chain.

In order to deliver on our commitments we have developed a Carbon Neutrality Roadmap which focuses on five pathways: reliability, energy efficiency, and improvements; renewable energy; electrification; carbon capture, utilization, and storage; and green/blue hydrogen.

In the manufacturing process, one of the areas our industry is looking at is electrification. Recently, we inaugurated the world’s first large-scale electrically heated steam cracking furnace with our partners BASF and Linde at BASF’s Verbund site in Ludwigshafen, Germany. By using electricity from renewable sources instead, this new technology has the potential to reduce the CO2 emissions of what is one of the most energy-intensive production processes in the chemical industry by as much as 90%.

This is one example of where both innovation and collaboration is making a difference.

The chemical industry is energy intensive and hard to abate, with about 50% of its total emissions being Scope 3). What are some of the challenges and blind spots of lowering emissions and what are some of the viable pathways?

There are many challenges.  We can’t simply flick a switch to change the ways things are. We need to adapt the way we think and conduct business to not only reflect our past experiences, but also incorporate the goals and aspirations of the next generation into our business models.

One of the challenges related to scope 3 is gathering data from wide range of sources where the organization doesn’t have any control over, which makes it a challenging process. Additionally, it requires estimating emission from some activities, which might lead to double counting or over/under estimation.

Also there are challenges related to the methodologies of scope 3 calculation. The variability of the methodologies can lead to inconsistencies of results across industry or region.

Overall, collaboration and innovation across the value chain will be key to how we collectively address these challenges going forward as we approach the future with a constructive pragmatism.

In your view, considering the financing and technology aspect of the issue, can we achieve net-zero by mid-century and what are the key enablers to make this happen?

As already mentioned, we need technology to mature and financing to unlock solutions. It will be challenging, and in our view, could be only overcome by partnership and collaboration.

No single organization can address these issues alone. The scale of the challenge is too large, too urgent, and requires action by many stakeholders. SABIC is collaborating with our stakeholders and business partners across the value chain.  This includes industry partners, research institutions, and government entities.

Moreover, SABIC has established partnerships with academic institutions and industrial partners. These collaborations aim to leverage scientific expertise, conduct joint research projects, enable knowledge sharing, technology transfer, the development of sustainable solutions and developing talent and solutions for the industry.

Innovation around sustainable technologies, such as carbon neutrality, circularity, process improvements, operational efficiencies, light-weight solutions, chemical safety and sustainable applications, continues to be a key driver for our research efforts and is systematically monitored by the organization.

Also investment in infrastructure is key, where the affordability and accessibility of wide range of solutions are imperative to achieve carbon neutrality by mid-century.

When considering carbon neutrality on broader scale, it’s essential to recognize the varying national and regional circumstances. We have to take into account the unique challenges and opportunities each region faces in transitioning toward carbon neutrality.

As the newly elected Chairman of the GPCA Research and Innovation Committee, what are the Committee’s plans objectives over the next three years?

The committee will focus extensively on promoting the research and innovation within the Gulf chemical and petrochemical industrial firms, while enhancing the effective networking and cross collaboration and advocacy that will eventually help in promoting the innovation culture.

It is also essential that we build the right connections between the business needs as our research and innovation platform and sharing the best practice within the GPCA community. Addressing common challenges and focus areas such as sustainability, plastic recycling, carbon neutrality and identifying the corresponding research areas will be one of the priorities for the GPCA R&I Committee which will help to develop a strategic research and innovation approach toward global and regional challenges.