INSIGHT: Scope 3 emissions remain petrochemical industry’s Achilles’ heel

BUENOS AIRES (ICIS)–Reducing Scope 3 emissions remains the petrochemicals industry’s Achilles’ heel to meet carbon neutrality targets, and there is little sign they could be reduced anytime soon.

Scope 3 emissions are those a company has difficulty to control, mostly those emitted to the atmosphere by external parties to a company’s operations: its suppliers, for instance.

So far, that has precisely been companies’ justification to have have seen little or no reduction in their Scope 3 emissions: it is difficult to control them  because they are external.

While laws across the world are circling in on Scope 1 and 2 emissions – those a company has a most direct control over – they will also circle in on Scope 3 emissions in years to come: and companies may face a harder pill to swallow if they do not act immediately.

In an event organised by the Latin American Petrochemical and Chemical Association (APLA), companies reaffirmed their commitments to reduce Scope 1 and 2 emissions but, regarding Scope 3 emissions, they only delivered a set of good intentions.

GATHERING DATA
Leticia Jensen, global procurement director at US chemicals major Dow, reaffirmed the company’s commitment to reduce its Scope 1 and 2 emissions by 15% by 2030, compared to 2020 levels.

That would represent around 5m tonnes/year of Dow’s total emissions, which, including Scope 3, stood at around 110.9m tonnes/year in 2021.

Scope 3 emissions represented, she added, 70% of Dow’s emissions – 77.64m tonnes in 2021 – with half of them coming from the feedstocks used in the company’s operations.

The company is due to publish its emissions report for 2022 in mid-June.

Jensen went on to say that Dow’s data gathering about Scope 3 emissions is improving as its suppliers actively take part in Dow’s aim to perfect its emissions data.

Dow has embarked in a campaign to “engage with our suppliers for them to also reduce” their emissions, she said.

“To decarbonise the supply chain, it is key to improving data gathering. We are engaging with our suppliers, so they share with us their PCF [product carbon footprint]. We started in 2021 with a small group of suppliers,” said Jensen.

“From 2022, we are going to include data from our suppliers in our accounts, data we have collected in the past two years. We have increased transparency so making reducing emissions a priority becomes easier for us and for our suppliers.”

Jensen said that 397 of Dow’s suppliers had been invited to share their emissions data in 2022, with 235 of them responding to the request.

That was sharply up from the 105 who responded in 2021, she said.

“Fortunately, a majority of them already have emissions reduction targets, and many of them have shared specific data about the emissions emitted by the products we purchase from them,” she said.

MEASURING SCOPE 3 EMISSIONS: ‘AN ESOTERIC ART’
Marcio Marino, from Mexico’s polyolefins producer Braskem Idesa, partly owned by Brazil’s petrochemicals major Braskem, said there is a lack of transparency when it comes to reporting Scope 3 emissions, but added that, equally, many companies are still not paying enough attention to the issue.

“For example, do we pay attention to whether a shipping company takes the shortest route to bring in material? Most times, we still don’t pay attention to things like that in the daily running of our operations,” he said.

“There still exists a lack of communication among the different players in the supply chain. All in all, being able to measure Scope 3 emissions efficiently thus becomes an art – an esoteric art.”

Marino said companies could risk a backlash with the issue of Scope 3 emissions mirroring that with plastics, which has become “a villain” to the eyes of many.

He went on to say that restrictions and taxes to emissions could “even diminish” companies’ supply chains, just as has happened in plastics.

He said he is convinced that achieving a low-carbon economy will not be possible without attacking Scope 3 emissions head on and encouraged petrochemicals industry players to fend off the “hidden risk” that regulators will hit the industry with harsh regulations, because not enough is being done now.

He conceded, however, that petrochemical companies have a hard task ahead of them to tackle Scope 3 emissions.

“Other industries, such as automotive for instance, have clearer product lines: cars, trucks, coaches [and it is easier to tackle the emissions in those supply chains]. For us, in petrochemicals, it is harder,” said Marino.

“We have many different resins and end applications – our products can vary from single-use plastics to vehicles: they have very different life cycles, and they are very different products. That is one of the difficulties we have to deal with [when it comes to tackling Scope 3 emissions].”

He went on to say that those difficulties should not be an excuse, however, to keep things as they are and that the industry needs to start somewhere.

Citing French philosopher Voltaire, he said that “perfect is the enemy of good” – meaning that instead of trying to find perfection in tackling Scope 3 emissions head on, the best way would be to start measuring them appropriately, something the industry is still very far away from.

Voltaire actually wrote in 1770 that “the best is the enemy of the good”, citing it as an old Italian proverb (Il meglio e nemico del bene). The phrase was translated into English as “perfect” and made its way into common parlance in that form.

“The difficulty about this cannot be the justification to do nothing about it. The longer it takes us to do it, the more risks that regulators will come after us with harsh regulations. The best thing for us would be to be ahead of the game and act now,” concluded Marino.

The APLA Logistics event ran in Buenos Aires on 6-7 June.

Insight by Jonathan Lopez