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Posted 1 month ago | 3 minute read
Chemicals sector has significant potential in the net zero transition
The chemicals sector globally is not yet taking action to cut its climate footprint or prepare for climate risks – but net zero presents a growth opportunity for the sector.
The Planet-Positive Chemicals report, published by Systemiq and the University of Toyko’s Centre for Global Commons this month notes how, at present, less than one in five large chemical firms have set science-based climate targets and almost all of the feedstocks used by the sector – 98% – were fossil-fuel-based in 2021. This proportion would need to drop to 18% by 2050 in a net-zero scenario according to the report.
The report noted that there are multiple challenges to decarbonising the sector at scale and pace, including policy support in some geographies and the fact that some key technologies such as low-carbon hydrogen and carbon capture are still not yet economically scalable. There is also the sheer scale of investment needed in retrofitting existing production sites.
But the report said that these investments are necessary if the sector wishes to avoid physical climate risks and reputational risks in the future. In addition, the investments present innovation and job creation opportunities. The report also sets out a roadmap for the chemicals value chain detailing the key technology, infrastructure and skills investments that need to be made in the coming years.
As well as outlining these technology roadmaps, the report urges the sector to improve its climate-related governance and risk reporting. It argues that most firms are not properly considering the physical and reputational risks they would face in a range of warming scenarios – something recommended by the Taskforce on Climate-Related Disclosures (TCFD).
The report also emphasises the need to invest in circular economy approaches. It forecasts that the total demand for chemicals globally in 2050 could be up to 31% lower with a joined-up circular economy approach consisting of reuse and recycling where possible. It advocates for carbon capture at all stages of the product and material life-cycle including end-of-life.
GridBeyond Managing Director UK and Ireland Mark Davis said: