28 May 2008 06:48 [Source: ICIS news]
SINGAPORE (ICIS news)--A global cap-and-trade system could help drive innovation in the chemical industry to limit emissions of greenhouse gases (GHGs), or put an unmanageable burden on costs, said executives at Shell Chemicals and Sumitomo Chemical on Wednesday.
The debate over a global cap-and-trade system heated up at the Asia Petrochemical Industry Conference (APIC).
"We have to deal with the hard truth that more energy demand means more carbon dioxide (CO2) at a time when climate change looms as a critical global issue," said Ben van Beurden, executive vice president at Shell Chemicals.
"The chemical industry has already reduced energy usage. Now we must develop large-scale carbon capture storage (CCS)," he added.
Van Beurden foresees chemical companies and clusters implementing CCS systems in the future to cut down on emissions. But government must play a role in development, he said.
"We will need governments to build a global CO2 framework to drive this and also incentivise CCS projects on a large scale," said Van Beurden. "If governments can develop a framework, the private sector will respond with solutions."
However, Sumitomo Chemical president Hiromasa Yonekura said the industry must take a different approach to climate change.
"I don't believe in cap-and trade," said Yonekura, who is also chairman of the Japan Petrochemical Industry Association (JPIA). "The task of setting the cap in a fair and transparent manner is difficult and can take years to negotiate across nations and industries and then to companies."
"There is also the tremendous cost of monitoring emissions," he added. "I don't see how you could do it."
Instead, Yonekura advises a sectoral approach to reducing greenhouse gases. This would involve driving technological innovation and sharing best practices across companies and countries.
In Japan, the government had developed a "Cool Earth 50" plan to reduce global GHGs by 50% by 2050. This required the cooperation of major emitting countries like the US and China, as well as developing nations.
"Technological innovation is a crucial part," said Yonekura. "60% of the reduction must be achieved through new technologies."
These technologies include high efficiency coal power, solar power and electric vehicles, he said, adding that technological leaders such as Japan must help developing countries adopt those new technologies.
"The chemical industry must be a leader and a catalyst in climate change," said Yonekura. "We will achieve greater energy efficiency and GHG reductions within our industry, but also contribute to other industries in their efforts."
APIC runs from 27-28 May and is hosted by the Singapore Chemical Industry Council.
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