Systems change consultancy Systemiq has released a roadmap for the chemical industry’s transition to circularity.
- Systemiq’s Planet Positive Chemicals report provides detailed strategies for the chemicals industry’s transition to net zero and beyond.
- Chemicals have an essential role in every sector of the global economy, but their toxicity and carbon footprint risk having “catastrophic consequences for the planet”.
- The chemical industry’s transition will provide new solutions for the decarbonisation of other hard-to-abate industries.
Written in collaboration with the University of Tokyo’s Center for Global Commons, Systemiq’s report places the chemicals industry at a crossroads. If the sector continues on its current trajectory, it could contributed towards an overall global temperature increase of 4°C by 2050.
If, on the other hand, it introduces substantial changes, such as those outlined by the Planet Positive Chemicals report, then it could offer sustainable economic growth while enabling a range of innovative solutions to climate change.
Chemicals industry off track to meet science-based targets
The report highlights many of the environmental risks associated with the chemicals industry. As chemical products are used in downstream activities across all sectors of the global economy, their sustainability credentials have a direct impact on the ability of users’ and traders’ ability to meet their own climate targets.
Despite the system-wide impact of the chemicals industry, the sector is lagging behind in the transition to net zero. Systemiq’s report reveals that, as of August 2022, only seventeen of the industry’s biggest players had committed to targets in line with the Science Based Targets initiative’s (SBTi) recommendations for limiting global warming below 1.5 °C.
This represents just 17% of the companies in the sector, while the global cross-sector average stands at 35%. Reflecting this lack of progress, the report warns that the chemicals industry’s emissions abatement needs to happen rapidly.
With the sector’s current global annual emissions reaching 59 GT CO2, chemicals alone could exhaust the global carbon budget for maintaining global warming below 1.5°C by 2030, potentially contributing a 2°C increase in temperatures by 2040.
The Planet Positive Chemicals report aims to provide the chemicals industry with a common understanding of how it can transition to cleaner modes of operation.
It establishes a clear ten-point strategy for how this can be achieved through steps including the creation of circular business models, the digitalisation of the chemicals value chain, and transparent disclosure of key environmental data.
Transition pathways present opportunities for decarbonisation in other sectors
The report’s recommendations for the chemicals sector’s transition to cleaner modes of production would not restrict its economic growth.
On the contrary, its detailed economic analysis projects that annual production volumes could increase by 2.5 times, while also contributing to the decarbonisation of industries including shipping and energy storage.
Transition strategies, such as the expanded use of renewable carbon feedstocks, could create an ammonia-free chemicals system that serves as a net carbon sink absorbing up to 500 million tonnes of CO2 per year by 2050.
Clean ammonia made with bio-based feedstocks or captured carbon, would offer a decarbonisation solution for industries such as agriculture, where it is commonly used as fertiliser, or shipping, where it can be used as a zero carbon fuel that is easier to store and transport than hydrogen alternatives.
Other examples of how chemicals can be used to support resource efficiency and the low carbon transition include their deployment in waste management solutions, as seen in Descycle’s approach to recovering metals extracted from electronic waste.
Such technologies provide an opportunity to create circular supply chains for resources that will be crucial in enabling the global transition, as such metals are a vital component of clean energy systems.
Systemiq’s report explores several possible scenarios, drilling deep into each of the main segments underpinning the chemical industry’s economic activity. Paul Polman, former CEO of Unilever, describes it as, “a clarion call to the chemical industry,” highlighting the significance of the immediate decisions that must be made in response.