GHG Emissions, Industrial - May 27, 2022
Net Zero Petrochemicals Needs Billions in Investment
Altering the production of petrochemicals to omit carbon emissions requires investing an extra $759 billion by 2050, according to a new report from research firm BloombergNEF (BNEF).
Electrification and carbon capture and storage are likely to play a central role in reducing emissions from the production of high-value chemicals (HVCs), which are key feedstocks used to make plastics and many manufactured goods. HVCs are responsible for up to 2% of global emissions, equivalent to aviation, and double the aluminum industry’s contribution.
The industry is facing pressure to lower emissions by 2050 from governments and corporate net-zero commitments. Net zero targets of petrochemical producers cover more of the global manufacturing capacity than other heavy emitters like steel and cement. The report, “Decarbonizing Petrochemicals: A Net Zero Pathway,” outlines a pathway to low-emissions chemicals and describes how a combination of falling carbon capture and storage (CCS) and electrification costs could reduce emissions to net zero, even while total production grows significantly.
BNEF estimates that new clean capacity and retrofits for lower emissions will cost the petrochemicals industry an additional $759 billion compared to business-as-usual capacity growth, which is about 1% of the $172 trillion needed to decarbonize the global energy sector by 2050. Decarbonizing chemicals will be capex-intensive, but it is crucial for all new capacity and retrofits beyond 2030 to be net-zero, to avoid the risk of stranding assets over their long lifetimes.
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