Liu Shuang, Dong Yu, Wang Hui
Deloitte focuses on the decarbonization of the chemical industry, analyzes the six challenges faced by the industry in the green and low-carbon transition, and proposes six ways to transition and decarbonize. The report points out that the risks of green power supply, insufficient driving force for transformation, and business model constraints are practical challenges for the transformation, and the integrated application of green and low-carbon technologies should be accelerated at the technical, application, and business model levels.
Challenges faced by the chemical industry in the green and low-carbon transition
The global chemical industry accounts for about 4% of carbon emissions, and the chemical industry, as a high-carbon emission industry, has a long industrial chain and wide product coverage, and is facing great pressure to reduce carbon emissions. More than 130 countries around the world have made carbon neutrality commitments, establishing a binding framework for the transformation of the chemical industry. Taking the Clean Competition Act (CCA) of the United States and the European Carbon Border Adjustment Mechanism (CBAM) as examples, carbon tariffs have led to an increase in the cost of upstream raw materials and product exports in the chemical industry. Therefore, petroleum and chemical enterprises must implement effective new technologies and models in energy structure, raw material substitution, production technology and other ways to cope with the multiple challenges in the green and low-carbon transition.
The main challenges of the green and low-carbon transformation of the chemical industry are: First, there is a risk of insufficient supply of green electricity. The chemical industry faces risks such as high procurement costs, lack of stability, and insufficient carbon reduction value. In particular, it is difficult for general chemical enterprises to obtain self-supplied power station licenses, and due to the large investment in new energy projects, the green power supply of small and medium-sized chemical enterprises is crucial to the survival of enterprises.
Second, the competitiveness of the low-end chemicals market has weakened. The management of "carbon leakage" is uneven around the world, and the standards and efforts are inconsistent, and there is a phenomenon of "carbon leakage" in which some chemical companies choose to transfer the production chain to reduce production costs. Developed countries have generally adopted carbon tariffs and other border adjustment measures to deal with the problem of "carbon leakage". However, in the basic and intermediate chemicals markets, low value-added and fierce competition create significant pressure to pay additional energy costs.
Third, the demand side and the management side support the transformation of chemical enterprises are insufficient. From the demand side, most consumers are willing to pay for low-carbon products, but there is a lack of inducement and incentive mechanisms to force the green and low-carbon transformation of the industry from the consumption field, and the motivation to drive the green transformation of the production side of the industry with the green transformation of the consumption side is insufficient.
Fourth, the statistical accounting and reporting system for carbon emissions is not perfect. High-quality carbon verification is the foundation and important guarantee for international cooperation on emission reduction and the healthy operation of the carbon market, and it is also a powerful starting point for restricting and promoting the green and low-carbon transformation of the chemical industry. At present, the international carbon accounting verification guidelines are not perfect, and there is no relatively uniform standard for accounting methodology and verification process (for example, the EU lignite emission factor varies by up to 27%), and the clarity and transparency of information disclosure need to be improved.
Fifth, the potential of recycling under the linear business model needs to be unleashed. Taking plastics as an example, according to a McKinsey research report, it is estimated that by 2030, about 50% of the world's plastics can be disposed of through chemical recycling. Chemical recycling of waste plastics can replace incineration and solidify carbon in products, thereby significantly reducing carbon emissions. At present, significant breakthroughs have been made in key technologies and complete sets of technologies for chemical recycling, and they have entered the demonstration stage one after another, and are expected to be applied on a large scale after 2030.
Sixth, there is an urgent need for technological innovation and integrated development in the chemical industry. With the development of chemical products towards high-end, differentiation and customization, in addition to technological innovation, how to effectively combine the advantages of biology, physics, materials science and other disciplines, and how to effectively couple applications with green technologies (such as electrochemistry), digital technology and artificial intelligence have also become the key to the transformation and upgrading of the chemical industry.
Six pathways to decarbonization in the chemical industry
Improve the energy efficiency of the whole process of chemical reactions. Chemical production from raw materials to products needs to go through physical and chemical processing, which includes the coupling of material flow, energy flow and information flow. Chemical reactions mostly require high temperature and high pressure catalyst conditions, and the application of vapor recompression and new catalysts can effectively reduce the chemical reaction conditions, so as to achieve consumption reduction and emission reduction. For example, Linde's EDHOX technology reduces the reaction temperature of steam cracking of olefins from 870 degrees Celsius to less than 400 degrees Celsius and is being piloted in Germany.
Vigorously implement green electricity energy substitution. Green electricity substitution is a necessary way for the chemical industry to cope with the goal of carbon neutrality. Actively participating in green power trading, effectively participating in energy production cooperation, and accelerating the implementation of green electricity substitution are the low-carbon strategies of leading chemical enterprises. BASF, for example, has become the second largest purchaser of green electricity in China in recent years through large-scale participation in green power trading, with 330 million kWh per year. In September 2023, BASF signed a 20-year power purchase agreement with to ensure a stable supply of green electricity in the long term.
Advance the layout of hydrogen energy and biomass resource utilization scenarios. Hydrogen energy and biomass energy are ideal clean energy, but at present, their scale, application path, and market share are not high. In terms of hydrogen energy, the future chemical industry will mainly focus on scenarios such as high temperature demand in the reaction process and low operating efficiency of electric heating furnaces, and biomass energy, such as the conversion of biomass into bio-natural gas (biogas), biomass liquid fuels such as fuel ethanol, biodiesel, bio-jet coal, etc. The advanced layout of biomass energy and hydrogen energy resource utilization is conducive to the transformation and development of the chemical industry.
Promote the application of carbon capture, utilization, and storage (CCUS) technologies. From a global perspective, CCUS technology has entered a window of rapid development. Chemical enterprises such as chemicals and fertilizers are high-concentration carbon capture sources, among which the chemical solvent absorption method has been used in the chemical industry for many years, and the technology is mature and widely used. Chemical enterprises should actively give full play to their advantages, continue to promote the integration and utilization of CCUS technology, promote the efficient connection between the upstream and downstream of CCUS, and play a role in the regional source-sink matching mechanism.
Continue to improve the level of electrification of chemical processes. With the promotion of new energy applications and the continuous improvement of the green electricity trading market, the green transformation of the chemical industry requires supporting end-use energy technology and low-carbon energy equipment. For example, the electric cracking furnace is used as a reactor for olefins, and new electrification transformations are continuously carried out in the corresponding infrastructure, process flow and equipment to improve the level of electrification application.
Build a green, circular and low-carbon development system for the chemical industry. Promoting the reuse of waste chemical materials is an effective measure to promote the "reduction" of waste in the chemical industry at the source, which has a direct effect on reducing carbon emissions. Under the goal of "double carbon" and the development trend of circular economy, it is of great significance to accelerate the breakthrough in the recycling and utilization of waste chemical materials and build a green and low-carbon development system.
Contact: 010-64523406 Submission email: [email protected]
Editor: Zhang Rui
Proofreading: Liang Guohua
Review: Chang Fei Lu Xiangqian