Why green materials require strong partnerships

Written by: Ferdinand Rammrath

Covestro’s vision to become fully circular has never been more important when considering the world’s global climate targets. This also applies to need to form collaborative partnerships. Without a globally coordinated mitigation effort, this transition is impossible. Platforms on very different levels, like COP27 and H2Global, are crucial for turning that vision into reality, as they connect the right stakeholders to advance their progress towards climate neutrality for a stronger circular economy.

Tapping sustainable raw materials

Green energy will play the central role in this transition. In the chemical industry, energy is not only consumed in our own plants, but also in the upstream production of raw materials, such as green hydrogen and green ammonia. Both these areas offer considerable potential for emission reductions.

In 2022, Covestro announced its climate targets for scope 1 (emissions from our own production) and scope 2 (emissions from external energy sources). In 2023, we intend to announce a reduction target for scope 3 as well (emissions from the upstream and downstream processes in the value chain). In our scope 3, a significant amount of emissions come from a single raw material: ammonia accounts for around 900,000 tons of CO2 per year.

Our Memorandum of Understanding with Fortescue Future Industries (FFI) demonstrates the significant role of partnerships for a climate neutral future. FFI is a green energy company from Australia, focusing on the development of global hydrogen and ammonia projects. Its potential annual supply of green hydrogen to Covestro holds enormous savings potential for our scope 3 emissions. The equivalent of up to 100,000 tonnes of green hydrogen would reduce our greenhouse gas emissions by up to 900,000 tonnes of CO2 per year.

Covestro uses hydrogen and ammonia as raw materials to produce high-performance polymers for the key industries we serve, such as automotive and furniture. By using green raw materials in our processes, we can make CO2-reduced offers to our customers, therefore making their applications more environmentally and climate friendly.

Blueprints for success

Global progress can hardly prosper without local action and I’m pleased to see countries like Germany taking a pioneering role. For that transition to be a success for energy-intensive industries like the chemical industry, renewable energy must be available in very large quantities and at competitive cost. To achieve this, we urgently need the appropriate framework conditions for a rapid and unbureaucratic expansion of solar and wind energy.

And we must also consider that energy-intensive raw materials such as hydrogen and ammonia cannot all be produced locally, when there is far better potential for large amounts of solar and wind energy in countries like Australia or the Middle East. The ambitions of the pioneering countries therefore require significant investment in building the infrastructure to import these products from countries like Australia in the future.

Initiatives like H2Global make me optimistic. The EU and Germany basically invented H2Global, an auction-based mechanism for ramping up the hydrogen economy, and thus hydrogen imports to Germany. The idea attracts a lot of international attention, and H2Global is now working on internationalization of the mechanism. I am convinced that this instrument will be successful, and I’m pleased that Covestro decided to become a member in H2Global in May 2022.

Platforms and initiatives like COP27 and H2Global continue to be hugely important in making the global transition to a fully circular, carbon-neutral future a reality. We must not tire of seeking and establishing opportunities for better and more productive collaborations, because no one person, company or country can achieve this alone – partnerships are the vehicles to get us there. Producers like FFI, off-takers like Covestro, and governments willing to build the necessary infrastructure and establish supporting regulations, are all needed to get this job done. 

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