Sector collaboration, funding and regulation vital for chems to decarbonise

LONDON (ICIS)–Greater collaboration between the public and private sectors is vital in helping heavy industries like the chemicals segment to decarbonise and meet sustainability targets, according to international energy leaders.

International energy policy makers were joined by leaders of non-governmental organisations joined to address the goal of achieving carbon neutrality at the International Renewable Energy Agency (IRENA)’s eleventh assembly.

“Policy frameworks are key. It requires an integration and interaction between the public sector, private sector and key experts is needed to find out what to do, how quickly to get there, and what levers can be pulled across the full portfolio,” said World Economic Forum (WEF) CEO Dominic Waughray.

set in place for the short run goals to 2030 may be necessary to make these targets more achievable.

For consumer-facing companies within the corporate community, Waughray noted, drivers like environmental sustainable and corporate governance (ESG) goals are becoming more prominent.

“There are systemic changes at work, one of most interesting among the private sector is stakeholder capitalism. The delivery of goods and services as reason for being corporation in 21st century is not only about quarterly return to shareholders but also value delivered to wider range of stakeholders,” he said.

This echoes comments made by Unilever CEO Alan Jupe on the company’s agenda to mark out capitalism 2.0 where he stated how sustainability goals and the way Unilever operates is changing.

For the chemicals sector – often referred to as ‘the industry of industries’ – companies are primarily focused on serving other businesses.

On the one hand, this pressure is less overt, as chemical producers are relatively unknown, and thereby much less accountable to public opinion.

As focus on sustainability ripples back up through the value chain, and the issues like plastic pollution gain prevalence, then it is in the interest of the industry to tackle these concerns head on.

For many European chemicals players, the opportunity to harness innovation provides bountiful opportunity, and allows them to carve out a space to play in future markets.

This sentiment was echoes by Italian energy major Snam’s CEO Marco Alvera, who stated that Snam has brought forward targets to become carbon neutral by 2040, but that funding and regulations are pivotal in structuring the energy transition.

Hydrogen Council CEO Daryl Wilson – also speaking at the IRENA assembly – advised: “Hydrogen can deliver decarbonisation in heavy industry but needs large scale investments in hydrogen is needed to meet the rising demand.”

While hydrogen has been identified as a key tool in helping to decarbonise, a wider understanding around energy efficiency is necessary to help embed real change, said Energy Efficiency Incentive Program (EEIP) CEO Rod Jannsen.

Jannsen spoke about the importance of energy efficiency for heavy industries at the virtual Davos Energy Week event, citing that small and medium business in the sector could improve efficiency by up to 25%.

Manufacturers have been sceptical in the past to adopt new technology which may not have tangible benefits, but this is changing as the benefits of increased efficiency become more quantifiable.

“Even in terms of investing and getting banks to understand it is hard to put a boundary around it to see the investment as it is part of the process, not like a wind turbine but a process integrated in production,” said Jannsen.

“What would drive industry to do more and to overcome obstacles is to look at it in a more positive way and make it seem like a strategic decision to help improve products and help firms become more competitive.”

Focus article by Morgan Condon

Thumbnail picture: The Mynydd y Betws Wind Farm, Wales, (Source: Phil Rees/Shutterstock