AS SHELL HIGHLIGHTS IN its Energy Security scenarios, published in March this year, we are rapidly running out of our carbon budget.
“In 2021, the Intergovernmental Panel on Climate Change reported that if the world is to limit global warming to 1.5°C, its carbon budget – the cumulative CO2 emissions for a given temperature outcome – is 500 gigatonnes (Gt),” wrote Shell.
“This is based on a starting point of January 1, 2020, and gives a 50% likelihood of limiting global warming to 1.5°C,” continued the energy and chemicals company.
“By the end of 2022, around 120 Gt of this budget had been used, leaving 380 Gt. Annual global emissions were more than 40 Gt of CO2 in 2022, and are expected to be at around the same level in 2023,” said Shell.
The company therefore concluded that “overshoot seems inevitable” even under the scenario of a rapid transition to a much greener global economy.
This raises the question, as I discussed earlier this week, of whether continued production of chemicals and polymers via oil and gas as the starting feedstocks will be viewed as viable for our environment:
Why dig more oil and gas out of the ground to make petrochemicals when the carbon cost is potentially ruinous for our climate? This might be a question increasingly asked by legislators, shareholders and the general public – rightly or wrongly.
Think here not just of the “standalone” carbon produced to makes petrochemicals and polymers and the emissions from shipping. Also consider carbon dioxide and methane leaking into the atmosphere from upstream oil and gas extraction, oil refining and natural gas processing.
Big efforts are going into reducing carbon emissions from steam crackers through technologies such as carbon capture and storage, electric furnaces run on renewable energy and small-scale nuclear reactors.
But will these efforts be enough to offset, as I said, emissions produced from upstream oil and gas extraction, refining and natural gas processing?
Is one of the routes to address the carbon challenge shifting our industry away from using oil and gas as feedstocks, to be replaced by technologies such as green hydrogen produced from electrolysis via renewable energy – along with a more limited role for chemicals and mechanical recycling to address the separate challenge of plastic waste?
Electrolysis into green hydrogen could create lots of synthesis gas (carbon monoxide and hydrogen) ro make methanol for conversion into olefins via methanol-to-olefins processes.
But this wouldn’t give us the carbon backbone to make aromatics. And aromatics supply will be under pressure from the closure of refineries because of the rapid pace of the electrification of transport.
So, do the answers include, as Shell suggests in its latest scenarios, extensive use of carbon capture and storage (CCS) and direct capture of carbon from the atmosphere?
“Achieving a global temperature rise of less than 1.5°C requires extensive use of carbon sinks,” wrote Shell.
By 2040, the company said that the world would need a CCS industry at 2,000-3,000 facilities, large-scale deployment of air capture already underway, 500 bioenergy plants, net reforestation well underway and a well-established land carbon management industry.
CCS and direct air capture could help give us the carbon backbone to make a broad range of chemicals. And more crucially, as Shell argues above, it would help bring global temperatures back below the 1.5°C target after an overshoot.
No “miracle” technologies liked carbon capture are needed
But there are lot of competing voices out there. One such voice is that of Mark Jacobson, a Stanford University professor of civil and environmental engineering.
In his latest book, No Miracles Needed, he contends that wind, water and solar power can provide enough cheap power to reduce carbon emissions sufficiently to end the climate crisis, while also reducing air pollution that kills 7m people a year and improving energy security.
“Bill Gates said we have to put a lot of money into miracle technologies,” said Jacobson in this 23 January Guardian review of his book.
“But we don’t – we have the technologies that we need. We have wind, solar, geothermal, hydro, electric cars. We have batteries, heat pumps, energy efficiency. We have 95% of the technologies right now that we need to solve the problem,” he added.
The missing 5% were for long-distance aircraft and ships, for which hydrogen-powered fuel cells could be developed, he said.
CCS, biofuels, new nuclear, direct air capture of CO2 and other technologies were an expensive waste of time, he contended.
“Carbon capture and storage is solely designed to keep the fossil fuel industry in business,” said Jacobson.
Only some of the CO2 was captured and buried with deadly air pollution continuing, he added.
Blue hydrogen, produced from fossil gas with some CO2 then captured and buried, was inferior to green hydrogen produced directly from renewable electricity, said the professor.
New nuclear plants were too slow to build and too expensive compared with wind, wave and solar, he argued:
“You end up waiting 15 to 20 years longer, for a seven to eight times higher electricity price – it just makes no sense. Even if they improve [build times], say to 12 years, that’s still way too long. We have cheaper, faster, safer technologies,” he added.
Biofuels held constant the air pollution problem while using large amounts of land, he said.
“Let’s focus on what we have and deploy as fast as possible. And we will improve those technologies just by deploying, bringing better solar panels, batteries, electric vehicles and so on,” he said.
He claimed that the “all the above” school of thought – which advocates the use of wind, solar and wind along with other technologies such as CCS, blue hydrogen and biofuels – had lobbied hard for their inclusion in the Inflation Reduction Act, the recent US climate legislation.
A concern about a world very heavily reliant on electricity is maintaining the stability of grids run on renewables. But his research, quoted in this webinar, found that this can be achieved through energy storage, demand management and connecting renewable supply across wide areas.
Storage could be batteries, pumped hydro, flywheels, compressed air and lowering and raising heavy weights, Jacobson said in the Guardian review.
In the webinar, he addresses another commonly raised concern: The large amounts of lithium, cobalt, copper and rare earth metals that would have to be mined to manufacture sufficient electric batteries.
The world’s supply of lithium was enough to power 10bn electric vehicles with a total 1bn vehicles of all types on the roads today, he said. Desalination plants were a source of lithium, the professor added.
In the EU, The Economist wrote in this 14 April article: “From 2027 battery-makers must recover 90% of the nickel and cobalt used, rising to 95% in 2031, and 50% of lithium, rising to 80%. The car will become a mini gold-mine.
“Christian Dahlheim, boss of Volkswagen’s finance arm suggests that, because raw materials will be in heavy demand even after eight years, the battery may be worth more than the rest of the car,” the magazine added.
Jacobson is among a group of experts who say that a rapid transition to wind, solar and energy will produce much, much cheaper energy supply than relying on fossil fuels.
But other scientists, of course, disagree. “Having a broader set [of technologies] in the toolbox only makes it easier to solve problems. We will only use the tools that it makes sense to use in any particular circumstance, but maintaining and expanding our options is a good thing,” Professor Ken Caldeira from the Carnegie Institution for Science in the US told The Guardian.
Is this hybrid approach better given the speed with which Jacobson suggests we dismantle a highly complex and huge hydrocarbon energy system that’s been around for more than a century?
Jacobson argues progress towards a 100% renewable energy system can be fast: “The goal is 80% by 2030, and 100% by 2050. But ideally, if we can get 80% by 2030, we should get 100% by 2035 to 2040,” he told the Guardian.
If we were to drastically cut back on oil and gas production to achieve these targets, how would we foot the transition bill? This would include not just the cost of new investments, but also the political and social costs of making the transition. But can we afford not to pay this bill because of the risks to our climate?
Back to the issue of chemicals supply
Jacobson’s arguments on renewable energy don’t cover where we would find the carbon backbone for chemicals without CCS and direct air capture of carbon, assuming that we quicky wind back extraction of oil and gas.
The billions of tonnes of plastic waste are the answer staring us in the face, some people argue. This could allow us to pretty much forget green hydrogen, as plastic waste obviously contains both hydrogen and carbon.
How, though, do we scale up chemicals recycling to meet modern-day demand? Current plants are only around 20,000 tonnes, a drop in the ocean of plastics demand if you can excuse the pun.
How would we collect sufficient volumes of plastic waste, and at a reasonable carbon cost, across a vast country such as Indonesia with its some 18,110 islands to meet local demand and resolve the country’s plastic waste crisis?
But as fellow blogger Paul Hodges argues in his latest ICIS Chemicals & Economy blog post, money could talk, leading to an explosion of innovation in chemicals recycling to unlock the economic and societal value in plastic waste.
“Investors with $10tn of assets have written to brand owners in the fast-moving consumer goods and grocery retail sectors to demand action. As they note:
Actions taken by companies to date have failed to have impact on the scale and at the rate required. As noted in the Ellen MacArthur Foundation’s 2022 Progress Report, signatories to the Global Commitment are not on track to meet their 2025 target that all packaging be reusable, recyclable and compostable. Efforts on reduction, implementing reuse and addressing toxicity remain very limited.
And they make four very specific demands for immediate change. They expect companies to:
- Support international efforts for an ambitious plastics treaty by joining the Business Coalition for a Plastics Treaty and advocate for legally binding measures designed to reduce production and consumption and boost reuse.
- Publicly support the ambition of the EU Packaging and Packaging Waste Regulation reform, to refrain from lobbying to reduce this ambition and to ensure that industry associations to which they are a member act in accordance with this position.
- Establish a clear plan of action to reduce material consumption in absolute terms, prioritising eliminating the need for single-use packaging altogether, including through upscaling reusable packaging systems, to be achieved by clearly defined timescales and subjected to external verification.
- Commit to identifying and eliminating the use of hazardous substances in products and packaging and to publicly report their progress in doing so.”
Conclusion: We don’t have much time
$10tn is a huge amount of financial pressure that could transfer itself upstream from the investors to the brand owners to the converters and then to the polymer producers. This could become a great example of positive societal pressure working at its very best.
Or we might disappear down a rabbit hole of over-reliance on chemicals recycling to solve the problem (mechanical recycling will, I believe, always have a limited role), as the technology and collection challenges are too great.
We don’t have much time, as the Shell scenarios make clear. We must act quickly to prevent potentially catastrophic social, political and economic damage from climate change.