AFPM ’23: INSIGHT: US chemical industry must view the ‘carbon challenge’ as a big opportunity
SAN ANTONIO, Texas (ICIS)–The US chemical industry is starting to view the ‘carbon challenge’ as a huge opportunity for innovation and growth.
Meaningfully lowering carbon emissions will require multiple approaches, along with substantial investment in technology and infrastructure. These investments may create the backbone of a greater global competitive advantage, building on the inherent US energy and feedstock edge, as customers worldwide increasingly demand products with a lower carbon footprint.
Ultimately, there must be a path to return on investment. Sustainability must be viewed as both environmental and economic.
“For nearly 60 years – ever since the movie The Graduate came out – we’ve been living in world largely dominated by one word – Plastics. But the new clarion call for our industry is Carbon,” said Jim Fitterling, CEO of Dow, in accepting the Petrochemical Heritage Award at the International Petrochemical Conference (IPC), hosted by the American Fuel & Petrochemical Manufacturers (AFPM).
“The carbon challenge – and the broader need for greater and greater sustainability – is truly one of the greatest challenges of my career. Coming together as individual companies and as a sector to drive carbon emissions down is not going to be an easy task,” he added.
However, it’s also “one of the greatest opportunities for our industry to shine”, said the Dow CEO, pointing to new processes and products being created and coming to market, along with collaborations worldwide to increase sustainability, including in circularity.
HYDROGEN AND CCS
Hydrogen and carbon capture and storage (CCS) will be critical to decarbonising the chemical industry, and investment in this area is poised to accelerate with incentives from the US Inflation Reduction Act (IRA), including those that boost CO2 tax credits for both storage and use in enhanced oil recovery (EOR).
Chemical companies are increasingly looking to use hydrogen to fuel cracker furnaces instead of natural gas to reduce emissions, while capturing and storing CO2.
“Our nation should embrace policies that help scale carbon capture and sequestration, green and blue hydrogen, lower carbon energy and advanced recycling,” said Chet Thompson, CEO of the AFPM, addressing delegates at the IPC.
“Supporting carbon capture should be an absolute ‘no brainer’,” he added, pointing out that even the UN Intergovernmental Panel on Climate Change (IPCC) recognises that CCS is needed and that without it, decarbonisation efforts would cost twice as much.
Green and blue hydrogen can reduce process emissions across all manufacturing sectors, reducing life cycle emissions by as much as 80%, said Thompson.
Blue hydrogen is produced from natural gas through a steam methane reformer, with the CO2 captured and stored. Green hydrogen is produced by the electrolysis of water using renewable energy.
While hydrogen and CCS, along with using renewable energy will go a long way in enabling chemical companies to meet carbon emissions reduction goals through 2030, the path to net zero from 2030-2050 will require new technologies.
“From 2030 to a net zero environment in 2050 it gets more difficult. It requires innovations, so we’re looking at electric cracking… and methane pyrolysis,” said Michael Heinz, CEO of BASF Corp, at the C-suite panel discussion at IPC.
AFPM RAISES STAKES IN PLASTICS
Along with decarbonisation, the other big theme in sustainability is plastics recycling, specifically chemical (also called advanced) recycling of plastics.
AFPM called on the US government to pursue policies that unlock the potential of chemical recycling of plastics.
“Advanced recycling could double plastic recycling rates in this country by 2030,” said Thompson.
There is currently no federal policy on chemical recycling. Instead, US states are individually passing bills that define chemical recycling as manufacturing operations rather than waste disposal operations, the latter of which comes with more stringent regulations. In March 2023, Utah became the 22nd state in the US to define chemical recycling as manufacturing.
AFPM is also going global, participating in talks as the UN works towards a global plastics treaty. In March 2022, 175 countries at the UN agreed to end plastic pollution and come up with an internationally binding agreement by the end of 2024.
The group is working closely with the Lead Plastics Negotiator of the US State Department, Larke Williams, to propose solutions such as chemical recycling.
“There’s no one size fits all for combating plastic pollution, and we’re really concerned about countries that are attempting to set uniform proscriptive measures because it’s going to lock us into technologies… that don’t allow for innovation and the ability for us to create new pathways to combating plastic pollution five to 10 years from now,” said Williams at the Petrochemical Leadership Luncheon at IPC.
“We need the ability to innovate and the flexibility to pilot those solutions in different places,” she added.
CARBON FOOTPRINT OF PLASTICS
The circularity challenge also comes with the carbon challenge, with claims by certain groups that chemical recycling is more energy intensive than virgin plastics production.
“People are trying to position the industry, and the industry needs to push back and position itself. All of these myths that are out there about [chemical recycling] need to be busted,” said Dow’s Fitterling.
“The full life cycle analyses that are out there today prove that there’s plenty of advanced/chemical recycling technologies that have a lower carbon footprint than conventional routes to plastics,” he added.
The carbon challenge is very real, and innovation and investment will bring out the opportunity.
“At Dow, we think there’s so much opportunity in this one challenge, we’ve built our strategy around it. We call it ‘Decarbonize and Grow’. How well we rise to meet that challenge is going to define Dow – and it will define our industry – for generations to come,” said Fitterling.
The challenges and opportunities are “one and the same”, he added.
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place from 26-28 March in San Antonio, Texas.
Insight article by Joseph Chang
Thumbnail shows CO2. Image by Shutterstock.
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