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The energy crisis and tougher carbon market rules in the European Union require chemical companies to shift quickly from fossil fuels and reduce their emissions. This can be achieved by combining better product recycling, switching to an electricity-based thermal process and using renewable raw materials instead of fossil fuels.
Achieving a climate-neutral chemical industry requires reducing emissions throughout the entire life cycle of chemicals. A new study from the think tank industry agora He proposes a three-pronged approach to achieve this. The strategy includes electrification of the thermal process, better recycling and reuse of chemicals and the use of renewable raw materials, such as sustainable biomass. This approach would reduce the demand for fossil gas and raw materials, as well as hydrogen and renewable electricity. By using the carbon found in biomass, the chemical industry can bind carbon dioxide to its products in the long term, if it is recycled frequently.
The chemical industry is facing a paradigm shift, moving away from fossil fuel-dependent production and rapid product disposal towards renewable raw materials and a circular economy. This holds huge potential for emissions reductions, as well as new storage and sinks for carbon dioxide,” he says. Frank Peter Agora Industry Manager.
Greenhouse gas emissions, higher than direct carbon dioxide
According to the Agora Industry Study, greenhouse gas emissions from upstream and downstream primary chemicals are even higher than direct carbon dioxide emissions from chemical manufacturing. In the case of Germany, the world’s largest exporter of chemicals, Agora Industry estimates that emissions from fossil fuel extraction and burning or disposal of end-of-life products are three times higher than those from production. More than half of the greenhouse gas emissions associated with these essential chemicals occur after their use. Extracting raw materials for basic chemicals also results in emissions, since 90% of chemicals depend on oil or fossil gas.
Rising prices for fossil fuels and tightening Community Emissions Trading System (EU ETS) rules require a rapid transformation of the chemical industry. A rapid reduction in the EU’s ETS emissions cap means that European industrial companies will have to become climate-neutral by 2040.
Accompanying policies are necessary to achieve this goal. According to Peter, “A global policy framework aligned with climate goals is essential to drive the transition of the chemicals sector. Enabling companies to reduce their reliance on fossil fuels will improve their competitiveness and resilience and stimulate the development of new product innovations for the growing demand for climate-neutral chemicals.”
40% of the sector’s fossil fuel consumption is used for electricity generation and heating. In response to the energy crisis, the European Union launched the plan repower Which, among other things, plans to halve the use of fossil gas in German industry by 2030. Fossil gas can be replaced in process heat, for example, by heat pumps, electric boilers or steam electrocracking furnaces. “With the energy crisis in the background, the future of the chemical industry in Germany and Europe depends more than ever on replacing fossil gas,” says Peter.
According to an AGORA study, thermal process electrification can reduce the total energy demand for heat generation in the German chemical industry by 15% compared to the present. On the contrary, the use of renewable hydrogen as an alternative fuel means an increase in energy demand by 31%. However, renewable hydrogen will be necessary to produce basic chemicals such as ammonia and methanol, the production of which until now has relied on hydrogen obtained from fossil gases.
Improved recycling
Since almost all chemicals contain carbon, improving recycling is another key component of the transformation strategy. “Plastic waste is an undervalued resource. Closing the carbon cycles rather than incinerating or disposing of products after use reduces emissions and demand for raw materials. Thus increasing recycling rates and standards is an important part of the transformation,” says Peter.
By introducing pro-recycling product design and using new chemical recycling processes, plastic waste recycling rates can increase from the current 15% to 75%. Plastic recycling will also become cheaper with planned emissions pricing from waste incineration under the EU ETS
Better recycling can reduce the demand for raw materials to make new products by 20% compared to today. The remaining demand for climate-neutral chemicals must be met by renewable carbon feedstocks. Renewable options identified in the Agora study include direct atmospheric capture of carbon dioxide, as well as biomass from waste and tailings from the agricultural and wood processing sectors, household and industrial biowaste, and wood residues that would otherwise be combusted, releasing carbon dioxide.
“By using biomass as a feedstock, the chemical industry can benefit from its ability to store carbon in the long term. The longer the carbon remains in products designed for reuse, the better for the climate,” says Peter. Currently, about a quarter of the biomass produced in Germany is incinerated. Storing vital carbon in materials and products may create a temporary sink of CO2.This means that more CO2 is fixed than is released.This positive climate impact can be maximized in combination with an improved circular economy.
The document “Chemists in Transition. The Three Pillars of Transforming Chemical Value Chains” was published in collaboration with a data analytics firm Carbon brains And EPSEwhich is a research institute ETH Zurich on behalf of Agora Industry. The 54-page publication contains an overview of the German chemical industry’s greenhouse gas emissions, as well as its consumption of energy and raw materials, and presents a three-pronged approach that reduces emissions in all areas: the life cycle. The publication can be downloaded for free below.
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