The chemical industry is a cornerstone of the global economy, supplying essential materials and technologies that form the backbone of over 95 per cent of manufactured goods. However, it is also a major contributor to environmental challenges, accounting for approximately 6 per cent of global greenhouse gas (GHG) emissions and significant resource consumption. To drive meaningful change and lead the transition toward sustainability, collaboration among industry leaders is key going forward.
Renewable Watch had the opportunity to engage with the Global Impact Coalition (GIC), a CEO-led platform dedicated to accelerating the chemical sectors transition to a netzero and circular economy. In this interview, Charlie Tan, Chief Executive Officer and Amanda Martin, Communications Lead share GIC’s vision, strategies and key initiatives aimed at reducing emissions, promoting circularity and fostering innovation across the value chain.
What is the idea behind ? What do you aim to achieve and how do you plan to achieve your goals?
GIC is a CEO-led platform focused on enabling a netzero and circular future for the chemical industry. unites industry leaders to co-create and scale technologies and business models that reduce emissions and promote circularity across the value chain. Originally incubated by the World Economic Forum, GIC relaunched as an independent entity on November 30, 2023, strengthening its commitment to sustainable solutions and low-carbon technologies.
Founded by seven leading chemical companies (BASF, SABIC, Covestro, Clariant, LyondellBasell, Mitsubishi Chemical Group and Syensqo), GIC was formed to answer the question: can we achieve netzero goals collectively, rather than individually?
Since its , GIC has grown its membership by over 50 per cent and launched successful projects, including a breakthrough pilot, innovative R&D project and joint ventures. Looking forward, GIC aims to increase its impact by expanding globally and across the value chain, while continuing to develop new projects. Through collaboration and strategic partnerships, GIC is committed to advancing a diverse portfolio of projects aimed at reducing emissions and increasing circularity along the chemical value chain. Backed by an engaged leadership team representing collective annual revenues exceeding €300 billion, and a proven, streamlined structure to swiftly transform ideas into projects and spin-offs, GIC is on the path to make a profound and enduring global impact.
What are the climate targets of select companies that are part of your platform? How does GIC help these companies achieve their targets?
While we cannot comment on the specific climate targets of our member companies, many have publicly committed to emissions reduction and circularity goals, such as sourcing a percentage of their feedstock from recycled or biobased materials. GIC supports these objectives by advancing tangible solutions through collaborative projects that challenging to undertake individually. For instance, our automotive plastics circularity project explores new streams of waste plastic material for recycling into feedstock, aiding companies in meeting their circularity targets. Similarly, our direct conversion project focuses on identifying low-emission pathways to C2+ monomers, contributing to emissions reduction goals.
What are the key emissions reduction priorities of the chemical manufacturing companies? Which emerging technologies are they focusing on to reduce their carbon emissions?
The chemical industry’s GHG emissions mainly come from energy consumption and chemical production processes. Around 60 per cent of the emissions result from burning fossil fuels to generate steam, heat and pressure required for chemical processes, while the remaining 40 per cent come from like carbon dioxide and nitrogen oxides released during chemical reactions.
To address these emission sources, chemical manufacturing companies are prioritising several key emissions reduction strategies focused on alternative energy sources and sustainable feedstocks, including:
Adoption of renewable energy sources: Transitioning from fossil fuels to renewable energy sources can drive chemical processes, including conversion, separation and purification, offering a pathway to lower emissions.
Electrification of chemical processes: Implementing electric-powered technologies, like electric steam-cracking furnaces, can significantly reduce emissions. For example, switching to electric power in steam-cracking furnaces has the potential to reduce GHG emissions by up to 90 per cent compared to conventional methods.
Utilisation of green hydrogen: Producing hydrogen through electrolysis powered by renewable energy provides a carbon-neutral feedstock and energy source for various chemical processes.
Carbon capture, utilisation and storage (CCUS): Capturing carbon emissions for utiliation in chemical processes or storage can significantly reduce the industry’s carbon footprint.
Sustainable feedstocks: Transitioning from fossil-based to renewable and bio-based feedstocks reduce carbon footprints. This include sourcing from recycled materials or captured carbon.
While operational efficiencies have achieved minor reductions in emissions, the industry now requires significant changes and innovative approaches to meet emissions reduction goals. Emerging technologies and collaborative efforts are essential to drive the substantial transformations necessary for a sustainable future.
Source: Chart from a GIC presentation
What is the scope for electrification, green hydrogen and carbon capture to reduce emissions in this space?
Electrification, green hydrogen and carbon capture are pivotal in reducing emissions within the chemical industry:
Electrification: Transitioning chemical processes from fossil fuel-based energy to renewable electricity can significantly lower emissions. For example, GIC member companies BASF and SABIC with engineering firm Linde have inaugurated the world’s first demonstration plant for large-scale electrically heated steam-cracking furnaces. By using electricity from renewable sources instead of natural gas, this technology has the potential to reduce carbon emissions by at least 90 per cent compared to conventional methods. These are the types of projects that are only possible with collaboration, and evidence of the need for organisations like the GIC.
Green hydrogen: Utilising hydrogen produced via electrolysis powered by renewable energy offers a carbon-neutral feedstock and energy source, essential for processes like ammonia production.
CCUS: Implementing CCUS technologies enables the capture of carbon emissions for utiliation in chemical processes or storage, mitigating atmospheric release. The chemical industry is increasingly focusing on carbon capture and utiliation, using the captured carbon as feedstock for new chemicals and polymers. For instance, Sustainable Methanol roject aims to assess supply-demand scenarios for sustainable methanol and identify viable sourcing options and production processes, including those utiliing captured carbon.
Collectively, these technologies present substantial opportunities for the chemical industry to achieve emissions reduction targets.
How can chemical recycling and reuse of materials contribute to GHG emissions reductions in the chemical industry?
Chemical recycling and material reuse are key strategies in reducing GHG emissions within the chemical industry by minimising the need for virgin materials and lowering energy-intensive processes. Chemical recycling breaks down plastic waste into its fundamental chemical components, enabling the production of new plastics or chemicals. Unlike mechanical recycling, which can degrade material quality over time, chemical recycling allows for the infinite recycling of materials without quality loss. This approach reduces the need for virgin fossil-based feedstocks, thereby lowering GHG emissions associated with raw material extraction and processing. A prime example is the GIC’s Automotive Plastics Circularity roject, which tackles the recycling of plastics from end-of-life vehicles. By dismantling, shredding and sorting plastic fractions, this initiative will enable the automotive industry to significantly increase closed-loop recycling, reducing emissions and promoting circularity in both the automotive and chemical industries.
What policy incentives are available to support emissions reduction efforts in the chemicals space across the world? What are your suggestions?
Globally, various policy incentives can promote emissions reduction efforts in the chemical industry. These can include:
Financial incentives: Governments offer tax credits, subsidies and grants to encourage investments in low-carbon technologies. For instance, the provides tax credits for carbon capture and storage initiatives, aiming to reduce industrial emissions.
Regulatory frameworks: Policies such as carbon pricing mechanisms ( carbon taxes or cap-and-trade systems) create economic incentives for companies to reduce emissions. In Europe, the EU Emissions Trading System sets a cap on total GHG emissions and allows industries to buy and sell emission allowances, effectively putting a price on carbon.
Research and development support: Public funding for R&D facilitates the development of innovative technologies aimed at reducing emissions in chemical manufacturing. For example, the R&D Hub for Plastic Waste Processing, incubated by GIC under the, has evolved into a standalone initiative managed by the Dutch innovation agency TNO. This hub focuses on developing low-carbon waste processing technologies to tackle challenges in plastic recycling. Enhancing policy support for emissions reduction in the chemical industry requires simplifying permitting processes for low-carbon projects, implementing demand-side policies to promote low-carbon products, and investing in infrastructure for clean hydrogen and other sustainable feedstocks.
What is your outlook on the emissions reduction of the Indian chemicals industry?
India’s chemical industry, being a significant contributor to the nation’s industrial output, faces both challenges and opportunities in its journey to reduce emissions. We see three key opportunities for the Indian chemical industry to align its growth trajectory with global sustainability goalsrenewable energy integration, investment in green technologies, innovation and collaboration.
While challenges exist, the Indian chemical industry has the potential to make significant strides in reducing emissions by leveraging policy support, technological innovation and international collaboration. Joining collaborative initiatives like the GIC can provide Indian chemical companies with access to a global network of industry leaders committed to co-creating and scaling up new technologies and business models to effectively reduce carbon emissions and advance circularity. Members benefit from established trust, broadened reach and participation in a community that fosters open dialogue and co-development of innovations.
