New Map for a Net-Zero Chemical Industry
The reality of climate change is well established, and the urgent need to transition to a carbon neutral economy is shared globally. Actors everywhere advance on their journey towards decarbonization. However, the options are numerous, and the optimal path is not always clear. A map is needed to support the chemical industry on its journey towards carbon neutrality.
A new “policy dashboard” was developed by members of the World Economic Forum’s initiative on Low-Carbon Emitting Technologies (LCET) in collaboration with Accenture. The model analyses the policies currently in place on LCETs across seven jurisdictions: China, the European Union, Japan, Saudi Arabia, the United Arab Emirates, the United Kingdom and the USA. It provides a unique map for the interested readers, which can help strategic decisions when implementing a project or designing policies to support decarbonization.
The LCET initiative aims at developing projects on the ground around five key focus areas: biomass utilization, carbon capture and utilization (CCU), electrification, hydrogen and waste processing. The successful development of LCETs depends on a supporting policy framework to a large extent. Therefore the LCET initiative members initiated a policy analysis to assess the extent of support the legislations in seven jurisdictions have on the main technology areas of the LCET.
The policy landscape shows graphically that all studied jurisdictions have enacted policies supporting carbon neutrality, however, at different speed and particular policy focus. In particular the analysis shows a number of similar developments, such as the general high level of policy support on alternative hydrogen production across jurisdictions. Also policies supporting technology and infrastructure are increasing in all seven jurisdictions. However, a number of differences are also revealed, with the USA more strongly favoring Carbon Capture and the EU putting more emphasis on the electrification of processes.
One of the main learnings is that creation and stimulation of an appropriate marketplace for more sustainably produced goods appears to be the policy area with the most room for improvement on a global scale. Low-carbon products will start with higher operational expenditures than the standard competitors. Therefore policies supporting markets for carbon neutral and circular products are absolutely essential. This could take the form of green labels, setting green (public) procurement, and generally creating a market pull on non-fossil plastics by supporting the use of polymers based on sustainable carbons (recyclates, biomass and CO2-based).
The whitepaper, Towards a Net-Zero Chemical Industry: A Global Policy Landscape for Low-Carbon Emitting Technologies, gives key insights to the policy dashboard and we feel it is a step forward in arming industry with the policy tools we need to continue to make informed decisions.
The LCET initiative was created by major chemical-sector companies within the WEF to accelerate the chemical industry’s journey towards net-zero. Covestro is a founding member of this initiative and has focused its corporate vision on becoming fully circular. Covestro is committed to climate neutrality, with the ambitious goal of reaching net zero emissions by 2035 for scope 1 and 2.