03 January 2008 13:26 [Source: ICIS news]
By Joe Kamalick
WASHINGTON (ICIS news)--As the prospect for a US federal climate control mandate grows more likely, the chemicals sector is looking for ways to turn a big problem into potential profit.
Climate control legislation pending in the US Congress would impose a cap and trade system on manufacturers, the transportation industry and electric utilities, requiring those sectors to limit and then make significant reductions in their emissions of carbon dioxide (CO2) and other greenhouse gases.
Senate bill S-2191 would impose limits or caps on industrial and power sector emissions and grant or auction emissions permits that would be traded in an open market. Those companies whose emissions of greenhouse gases are lower than their permitted levels could sell their excess permits to firms whose emissions exceed permitted amounts.
The legislation and its underlying principals have come under heavy criticism by the ?xml:namespace>
“We see the current cap and trade proposals on the Hill as all cost, no benefit approaches,” said Bill Holbrook, spokesman for the National Petrochemical & Refiners Association (NPRA).
“When it comes to chemical manufacturers, there is, of course, a heavy reliance on natural gas as a feedstock, so the concern is that cap-and-trade proposals with strict requirements at the outset would prompt massive fuel switching in the power sector from coal to natural gas, thereby impacting costs and supplies,” Holbrook added.
However, while NPRA and other chemical industry trade associations are likely to continue to fight congressional passage of cap and trade legislation, some in the industry are looking to ride the climate control wave.
One approach to reducing CO2 emissions by coal-fired power plants involves capturing carbon dioxide and sequestering it in underground caverns. But instead of pumping the CO2 underground, there are research and development (R&D) efforts under way that see CO2 as a feedstock.
The institute said that over the next three-to-four years, chemical technology firm UOP will partner with the
Such a system would give both Illinois-based UOP and its utilities partners a major advantage under a cap and trade mandate by reducing their respective emissions footprints while also giving UOP a marketable product.
The Methanol Institute also cited work already under way by Carbon Recycling International in
“The resulting fuel is high-octane gasoline, ultra low-sulphur diesel and methanol for existing automobiles and future hybrid flex-fuel autos,” the institute said.
The institute noted a new licence agreement for CO2 recovery between Japan's Mitsubishi Heavy Industries and
“The technology can recover 90% of the CO2 from the plant’s flue gas, and they use the recovered carbon dioxide to enhance methanol production,” the institute said of the GPIC development.
Of course the chemical industry’s polymer sector could stand to profit significantly from climate control legislation that, among other things, would require less emissions of greenhouse gases (GHGs) from the transportation sector.
“Polymer chemistry allows ‘light-weighting’ in automobiles, and every pound of plastics supplants two to three pounds of heavier materials,” said American Chemistry Council (ACC) chief economist Kevin Swift.
As it has for some years, this enables auto manufacturers to produce lighter vehicles that can run on smaller, lower-emission engines.
To meet a new 35 miles per gallon (mpg) fuel efficiency mandate recently passed by Congress and signed by President George Bush, auto manufacturers are going to have to rely increasingly on polymers and other light-weight materials to reduce engine loads.
Chemicals major DuPont has already launched a set of market-facing goals meant to position DuPont products in support of the kind of carbon-limits legislation being advanced in Congress and already in place in
DuPont spokeswoman Stephanie Jacobson noted that the company’s Tyvek wrap helps designers increase the energy efficiency of new buildings by creating a barrier to interior environment leaking that can increase a structure’s energy efficiency by 15%.
Jacobson said the company also sees great emissions reduction market potential for its shock-absorbing polymer Kevlar, best known for its use in bullet-resistant safety vests.
She said DuPont is advancing Kevlar in light-weighting applications such as aircraft design and construction.
“This has a role in making larger airplanes more fuel-efficient because it is five times stronger than steel on a pound-for-pound basis,” Jacobson said.
At least in part, it is because of the market and profit potential for its products in energy efficiencies and emissions reductions that DuPont last year was a founding member of the US Climate Action Partnership (US-CAP), an industry-environmental coalition that supports in principal a federal mandate to limit and reduce US emissions of CO2 and other GHGs.
“We support a
She said increased costs for natural gas and electric power that likely would be one consequence of a cap and trade mandate could be accommodated if those increases are measured and gradual, allowing industries with emissions-reducing technologies and products to offset those higher costs with increased applications and profits.
Whether that gamble pays off for DuPont in the long run remains to be seen. But the test of that theory is almost certain to come this year or next as Congress moves toward passing some sort of climate control legislation.
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