Although the chemical sector is not one of the major industrial emitters of greenhouse gases, its successful transformation towards net-zero represents a critical step on society’s road towards carbon neutrality. In this installment of our Pathways to decarbonization series, we explore a range of technological measures chemical industry players can adopt to support a net-zero transformation.
The state of play
As the emitter of 3% of global carbon emissions, the chemical industry is considered a hard-to-abate sector that lacks a straightforward path to decarbonization. Challenged by a low supply of green electricity, excess carbon leakage, and a lack of transparency in carbon measurement and reporting, the sector is struggling to develop appropriate business models and technologies to support its transformation. Despite these obstacles, however, the industry plays a key role in the industrial value chain by providing critical products for other sectors, such as automotive, construction, electrical and electronics, and consumer businesses. As such, its transformation to net-zero promises benefits to society at large.
The way forward
To deliver on these promises, the industry must continue innovating and developing new technologies designed to enable energy savings and circularity. While the lack of available green electricity and green hydrogen may hinder these efforts in the short- to mid-term, ongoing regulatory support focused on managing carbon leakage can contribute to the emergence of a level playing field across different regions and regulatory frameworks. Additionally, effective change will hinge on the ability of the sector to attract the green skills that are increasingly in demand across various markets.
Despite the obstacles, consumer-driven demand for green products is accelerating the industry’s transformation—leading to growing reliance on suppliers that offer sustainable options in the form of low- or zero-carbon products and services. This is not only setting the pace of change, but also represents a significant market opportunity for the chemical industry.
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About Pathways to decarbonization
The Pathways to decarbonization series is a collection of insights on the challenges, opportunities, and viable decarbonization pathways for high-emitting and hard-to-abate sectors. Each of the sector perspectives offers a foundational starting point for leaders who would like to better understand the landscape across these critical sectors.
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