Sustainability is one of the major concerns of the chemical industry today. The industry has taken cognizance of the severity of the issue and the global chemical fraternity is consciously aiming to incorporate product sustainability in their value chain. Applying green chemistry metrics to the chemical processes can play a pivotal role in minimising the discharge of hazardous substances in the environment. It enforces the substitution of these toxic chemical ingredients used in industrial manufacturing, with green (eco-friendly/biodegradable) materials.

Green chemistry reduces pollution to an extent at its source by minimising or eliminating the hazards of chemical feedstocks, reagents, solvents, and products. For greening of existing products and development of new products, chemical companies can take the following steps:

• Reducing the dependence on fossil fuels

Chemical companies in India and other countries have been relying on fossil fuel-based hydrocarbons to form dyes and develop almost every chemical or material within the marketplace. This dependence cannot continue for long if we want sustainable development of the industry without deteriorating our environment. Fossil fuels aren’t just used as a feedstock for the chemical reactions, they also supply the required heat and pressure to carry out the processes. One of the main downsides of this dependence is that the combustion of these naturally fossilized substances produces carbon dioxide (CO₂) and other waste products that are harmful to human health and the environment.

Using raw materials and feedstocks that are renewable rather than depleting will help in reducing the dependency on fossil fuels. These feedstocks are often made from products related to agriculture or the wastes of other processes. Depleting feedstocks are made from petroleum, natural gas, coal or are mined. 

• Formulating products with little or no toxicity to humans and the environment

One of the most important steps during formulating and developing a product is the selection of raw materials and manufacturing inputs. The selection of raw materials, chemicals, or substances that are used to manufacture a product can determine how consumers perceive a product and its impact on human health and the environment. Over several thousands of commercial products have been registered for use in India, which are of the foremost concern and require alternatives. 

• Designing chemical products to break down into harmless substances

Designing products for degradation is another principle of green chemistry. Chemical products should be designed in such a way that they could be broken down into innocuous substances after use, it will prevent them from getting accumulated in the environment. Products should be stable and not highly reactive for their intended use lifetime before being rapidly degraded once they enter the environment. To tackle the growing issue of chemicals in the environment, research is needed to study molecular triggers or chemical switches to activate the degradation of active ingredients following excretion into the environment after use.

• Importance of R&D in manufacturing Green Products: Researchand development plays a critical role in managing and reducing environmental impact across all activities, products, and programs right from their creation until disposal. It constantly reinvigorates companies to pioneer innovative processes which make efficient use of natural resources at their disposal.

Following the principles of sustainable chemistry will minimize the usage of unnecessary chemicals and reduce the amount of waste that is generated. This will allow for better efficiencies which in turn result in lower costs and higher profits that will definitely benefit the speciality chemical industry and propel us to the top!

Abstract

Sustainability has become the most important philosophy for success in business and industry, and a deciding cri­teria for customers and investors alike.. Several international energy and chemical companies have aligned their corporate sustainability goals with the UN’s SDGs. Many are making progress towards formulating and executing well-thought-out strategies to improve and manage sustainability proactively.

Introduced in 2015, the UN Sustainable Development Goals (SDGs) represented an agenda for sustain­able development. While very general, the goals outlined the aim to achieve a better and more sustain­able future for all. With UN Resolution 70/1, the UN General Assembly established 2030 as the target year for achieving the following sustainable development goals (Table 1).

United Nations Sustainable Development Goals

Across industry, sustainability is now front and center for customers and investors alike. Several inter­national energy and chemical companies have aligned their corporate sustainability goals with the UN’s SDGs. Many are making progress towards formulat­ing and executing well-thought-out strategies to im­prove and manage sustainability proactively. Leading industrial companies such as ExxonMobil, Dow, Saudi Aramco, and Shell have publicly announced some­what different sustainability approaches.

ExxonMobil, for example, has articulated a com­mitment to producing the energy and chemical prod­ucts that are essential to modern life, economic devel­opment, and improved standards of living and for pro­tecting people, the environment, and the well-being of communities near its operations; and to employ ad­vanced technologies to improve the sustainability of  its current businesses. Dow is collaborating with like-minded partners to advance the well-being of human­ity by helping lead the transition to a sustainable plan­et and society. Dow, one of the world’s leading materi­als science companies, has expressed a commitment to using science-based solutions and acting collaborative­ly to help lead the transition to a more sustainable so­ciety, employing a circular economy paradigm. Shell’s sustainability approach is built on a foundation of safe, efficient, responsible, and profitable operations. According to Shell, it will strive to produce and deliv­er energy responsibly, and in a way that respects peo­ple, their safety and environment. At the simplest lev­el, this means “doing no harm,” and involves a portfo­lio shift toward renewables.

Saudi Aramco’s approach involves pushing the limits of creativity and technology to drive down the carbon intensity of energy products. To this end, the company is increasing research into new, carbon-neu­tral feedstocks to provide meaningful solutions to the energy and climate challenges.

Sustainability Goes Beyond Environmental, Social, and Governance

People and organisations outside the industry want to better understand how the energy and chem­icals sectors are evolving. This includes the impact of these sectors’ activities on people and the environment and the associated risks, opportunities, and trade-offs. One of the ways companies respond to these requests is through corporate reporting, specifically non-finan­cial, environmental, social, and governance (ESG) re­porting. ESG criteria provide a set of standards for a company’s operations that socially conscious investors use to screen potential investments.

The environmental criteria considers how a compa­ny performs as a steward of nature. Social criteria ex­amines how it manages relationships with employees, suppliers, customers, and the communities in which it operates. Governance criteria considers factors such as transparency of reporting on sustainability progress, embedding sustainability culture throughout an or­ganisation, reporting on how investor dollars are ap­plied, and how an organisation manages its data to pro­tect customers and minimise cyber risk. Sustainability, however, is broader than ESG and extends to meeting the business and other needs of the present, but with­out compromising the ability to meet the needs of fu­ture generations.

Parties in the supply chain – suppliers as well as customers – are also refining their expectations of transparency. Purchasing tenders now often integrate sustainability as a pre-qualification item. High quali­tyreporting can make the difference in gaining valu­able contracts from companies that have similar val­ues. Companies can also mitigate supply chain risks of poor social and environment practices by encouraging transparency throughout their procurement processes.

Based on ARC Advisory Group’s Research

During the first half of 2020, ARC Advisory Group conducted research to gain a better understanding of the current state of sustainability and “green initiatives” in the chemical and energy industries. Specifically, we wanted to learn where companies are focusing their ef­forts, what challenges they face, and ultimately, how they believe digitalisation and other technologies can advance their sustainability initiatives.

The research findings show that 90 percent of glob­al energy and chemical companies have sustainability initiatives in place. In general, the sustainability initia­tives at energy companies focus on the transition to a lower carbon future, while chemical companies focus these initiatives on producing more sustainable prod­ucts. In other words, products that meet the increasing customer demand for a more circular economy, with increased recycling and reuse of products and materi­als. For both industry segments, improving operation­al safety also plays a vital role, since for many compa­nies this is part of the license to operate.

Government regulation and mounting consum­er pressure are driving the investment in sustainable products and lower-carbon energy through carbon taxes, fuel standards, and a ban on single-use plas­tics. In addition, one of the world’s largest investment firms, BlackRock, with nearly $7 trillion under man­agement (including huge stakes in leading industrial manufacturing and energy companies), recently an­nounced that sustainability issues would be at the cen­ter of its investment strategies moving forward.

Key findings relative to sustainability initiatives in­clude:

• Lack of capital and resources and aging assets are top barriers to meeting sustainability objectives
• Customer buying preference drives company sus­tainability programs and access to capital
• Improving operational safety is a key element of most sustainability initiatives
• Digitalisation plays a key role in ensuring progress in meeting sustainability objectives

 Importance of Digital Transformation to Achieve Sustainability Goals

ARC believes digital transformation spans industri­al products, operations, value chains, and aftermarket services. It augments people and knowledge through expanded use of sensors, data, and analytics. Most in­dustrial process companies globally will undergo a dig­ital transformation to some degree or other, with ma­ny already actively using technology to improve both business and environmental performance and sustain­ability. Digital enablement of new business models and finding new ways to bring products or services to mar­ket is a key capability in sustainable manufacturing. Below are findings from ARC’s survey (Fig 1).

How Valuable Are These Digital Capabilities for Improving Sustainability?

Seventy-five percent of survey respondents believe digital transformation is extremely important or very important for achieving sustainability goals. The fol­lowing digital capabilities were ranked in order of their importance to improve sustainability:

• Supply chain optimisation to coordinate, man­age, and improve the transparency of connected processes across different organisational silos; and coordinate processes to improve supply chain de­mands or product customisation and satisfy cus­tomer needs for sustainable products.
• Advanced process control (APC) to reduce process variability, minimise costly product giveaway, opti­mise processes against constraints, and support au­tonomous operations (wherever appropriate). APC based optimisation can also coordinate multi-unit dynamic process optimisation to help close the gap between plan versus actual production.
• Energy and utility optimisation using process modeling and simulation technology to improve the process design, optimise energy efficiency andprocessing, and improve maintenance.
• Predictive and prescriptive maintenance to im­prove asset utilisation and return on capital by use of machine learning and advanced analytic s to shift maintenance operations to predict failures and avoid process disturbances and equipment down­time.

ARC’s interviews with industry leaders revealed that operations management systems are a high pri­ority. Human reliability and knowledge management through state-based control and other approaches have greater importance in the context of sustainability ob­jectives. Product waste and energy losses often occur when workers do not have a good grasp on procedures and operational competency. For example, performing process startups, shutdowns, or other critical activities require established procedures that tie back to the ex­perience level of workers and the operations manage­ment systems in place.

Barriers to Meeting Sustainability Objectives

In general, the larger the company, the better its ca­pability to pursue sustainability objectives aggressive­ly. Because hypothetically at least they have more re­sources to devote to those objectives. However, sever­al people we spoke with in­dicated that funding deci­sions are made at the board level at larger companies, and many board mem­bers might not have clear insights and visibility to properly address sustain­ability. This is especially true given the age of much of the asset base in the ener­gy and chemicals industry.

The majority of infra­structure for heavy indus­try was designed and builtwithout sensitivity to sustainability goals or the devel­opment of more recent business models. In fact, most facilities were built prior to digital technology, and are designed principally around operational philosophies that date back to the 1980s. Unfortunately, it is not rea­sonable to think that industry will somehow change overnight or be supple enough to react to even the sim­plest of outside pressures for sustainability concerns. Older plants or facilities typically lack the base of sen­sors, instrumentation, and digital systems needed to optimise efficiency. The justification for modernisa­tion can be difficult, and the conversion and installa­tion process usually must be completed during a turn­around or shutdown.

The economics of driving complex change into highly energised and potentially dangerous assets that need to run at high levels of reliability are challeng­ing. Owner operators in general, and field operations, are often very resistant to change, whether upgrading manufacturing assets or introducing digitalisation, be­cause when they introduce change, they also need to go through a rigorous engineering design process to ensure integrity.

Management of change (MOC) processes tend to stifle innovation for sustainability, creating a huge gap between what the head office people think is possi­ble and desirable versus what field operations people think is possible and desirable. Head office staff such as IT, central engineering, or other centralised project or improvement type roles are constantly exposed to vendor conferences and information sources that form their perspective about what is possible. Workers in the field, however, often do not receive that same ex­posure to information. This gap between what field personnel understands about digital innovation, ver­sus what the home office understands creates an addi­tional barrier to improving sustainability.

Chemical companies are preparing for a customer driven trend for stronger and more sustainable mate­rials for the auto industry. This changes market strate­gy with differentiating products. The physical proper­ties of what is sold is of greater importance now; spe­cifically, how physical properties satisfy the need for re-usable products and products which are ‘circular’ in their ability to be re-used in a supply chain. The in­creased use of recycled resins can create a dilemma for automotive designers. There is a growing initiative to increase recycled materials content in products global­ly, and traditional methods of recycling polymeric ma­terials in both thermoplastics and thermosets can lead to degradation of engineering, mechanical, processing, and/or aesthetic properties of the resin. In an era where product quality rules, this situation forces designers to accept a much lower percentage of recyclate than they might otherwise wish to use or risk unacceptable prop­erty loss in molded parts. This is something no auto­maker can afford. Hence, a valuable feed stream of ma­terials (polymers) often ends up destined for a landfill once many consumer products are broken down and more easily reusable or recyclable materials are repur­posed.

To help address the increasing pressure they face from the investment community and energy consum­ers, energy companies, in turn, are focusing on how they can continue to meet the world’s energy de­mands, while transitioning to wind, solar, geothermal, hydro, and other renewable and non-polluting energy sources.

Conclusion

Clearly, sustainability within the global energy and chemical industries is a multi-faceted concept that en­compasses more than just environment, safety, and governance. Overall business sustainability through operational excellence and margin optimisation re­main important objectives. In addition, due to the dif­fering challenges each of those industries face, each has a somewhat different objective and focus for its sustainability initiatives.

While the vast majority of global energy and chem­ical companies have sustainability initiatives in place, based on ARC research, it appears that the sustainabil­ity initiatives at energy companies focus largely on the transition to a lower carbon future via increased use of wind, solar, hydro, geothermal, and other renewable energy sources; while chemical companies tend to fo­cus their sustainability initiatives on developing and producing more sustainable, circular products charac­terised by low-carbon footprint and extensive use of renewable and/or recycled raw materials that can sup­port reusable and/or recyclable end products for cus­tomers. For both industry segments, improving oper­ational safety also plays a vital role, since, for many companies this is part of the license to operate. And for both industry segments, digital transformation is seen as an important enabler for business and ESG sustain­ability. A combination of regulatory pressures, cus­tomer pressures, and pressures from the investment community are forcing energy and chemical compa­nies to move forward with their respective sustainabil­ity initiatives.

Abstract

The pressure on companies in the European Union is increasing, to become part of the European Union Green Deal. Chemical companies in Europe often implemented programmes, which are even more aggressive, and outlined concrete plans on how to become climate neutral even long before the deadlines set by the European Union. As European chemical companies started inviting their Asian supplies to be part of the programme, it is just a question of time till the same requirements will apply to Indian chemical manufacturers as well, directly or indirectly. Instead of waiting till they cannot avoid anymore the unavoidable, Indian chemical companies should consider to be at the forefront of this movement and benefit from the increasing importance of being sustainable to improve their image in the perception of their European customers, and as a result their market position in Europe

Indian chemical companies, which supply to Europe understand that doing business with European companies is more than offering the right quality at an attractive price. Without a EACH registration, the potential customer will not even test a product. And even if a company passes this hurdle, it is necessary to create enough confidence during lab and plant trials, that the customer is sure of the technical capabilities. In addition, the supplier needs to prove over a longer period of time his logistical performance, and he needs to have a good partner in Europe, who is capable of answering customer queries and complaints in a satisfactory way, so that the company is seen as a reliable partner which European customers trust. Nevertheless, not even this will be sufficient in the future. The global challenges resulting from climate change made us all aware, that the way we live our life and how we do business needs to change. For Europe, the European Union decided that they want to implement a number of measures to make our life greener and summarises this bundle of measures in a plan called the European Union Green Deal. There are a number of points which are addressed in this European Union Green Deal.

The policy areas which are in focus are:
1. Biodiversity: Measures to protect the fragile ecosystem
2. From Farm to Fork: Ways to ensure more sustainable food systems
3. Sustainable agriculture
4. Clean energy
5. Sustainable industry: Ways to ensure more sustainable, more environmentally respectful production cycles
6. Building and renovating: The need for a cleaner construction sector
7. Sustainable mobility: Promoting more sustainable means of transport
8. Eliminating pollution: Measures to cut pollution rapidly and efficiently
9. Climate action: Making the European Union climate neutral by 2050

As it is the most time critical issue currently, the major discussion is around the topic of climate neutrality. As key milestone of the European Union Green Deal the European Union decided to become climate neutral by 2050.

But some of the member states are even more aggressive. The parliament in Germany has decided that the country should become climate neutral by 2045. One consequence of this court ruling is also that measures have to be defined for the entire period until the target is achieved. So, it will not be an option to just set the target and after 10 years to postpone the end date.

Naturally, the pressure on companies in the European Union is increasing to contribute as much as they can to the European Union Green Deal and in particular to reduce CO2 emissions. At a first glance it might look as though 25 or 30 years are a long time to get things done, but especially for the chemical industry, and also for other industries driven by long investment cycles, this period of 25 or 30 years until the target has to be achieved is not very long. In particular, for companies with a capital intense product portfolio, the implementation of climate neutrality will be a huge challenge. Nonetheless, in spite of these challenges some companies are even more aggressive. Lanxess for example committed itself to becoming climate neutral by 2040.

Due to the political targets most of the European chemical companies started focused programs to accelerate the reduction of CO2 emissions. That this is a major challenge, not only because of the capital intensity, becomes clear when you know that the industry in Europe is under pressure to reduce CO2 emissions for some time already, particularly in Germany, which is also driven by high energy costs, and there are not many low hanging fruits anymore. This means, European companies must look into each and every detail of their activities. They need to look for options to reduce and/or compensate CO2 emissions, also along the input side of their value chain, and this does not only mean the energy consumption, but also the raw material procurement.

From an Indian perspective one might now argue that these are all only long term initiatives, and companies can wait and watch as their business will not be impacted in the next 5 years. However, unfortunately, this is not the most likely scenario. As I am also the European representative for some chemical products of one of the largest Indian business houses, I was recently invited by one of the major European chemical companies to attend a virtual conference on how this company wants to achieve climate neutrality and what the European company expects from their Asian suppliers on this journey. The message was very clear: if you want to continue to supply long term you will have to contribute to this target. How much and by when is certainly depending on how the purchasing market for the concerned products look like, but, to wait and watch is a strategy, which will for sure weaken the competitive position. From my point of view, it is just a question of time until the stricter requirements will apply to Indian chemical manufacturers as well, be it because more and more customers will push for it or because India will set itself targets to become climate neutral sooner than expected as of today.

As a supplier to European customers, Indian companies thus have two options:
1. Only follow the requirements of their customers and wait till they cannot avoid the unavoidable with the risk that their position vs competition is weakening or
2. Be at the forefront of this movement and implement sustainability measures ahead of competition to improve their image in the perception of their European customers and as a result their market position in Europe.

But, I personally feel there is really no choice, as an additional risk is already on the horizon: During the federal elections in Germany in September this year most likely the Green Party will gain a lot of votes and might even become the strongest party in Germany. In this case we will see even more pressure on the industry. But as the Green party also cannot afford to risk millions of well paid jobs in Germany, they will certainly fight for a regulation in the European Union to allow only imports of products, which are produced as per European Union climate standards. And especially for products where the competitiveness in Europe will not be given anymore after implementation of drastic measures (e.g. steel production based on H2 technology) the EU might finally decide to only allow imports of climate neutral manufactured products.

As the topic of climate neutrality cannot be avoided anyway, it will be therefore the more promising strategy not to wait till competition has gained the competitive advantage, but to be proactive in addressing the challenges and gain the competitive advantage itself. But, how to reach the target of climate neutrality or at least a significant reduction in CO2 emissions? To ensure a faster and stringent implementation in the companies, it will be very important to set aggressive targets from the top management and to involve the whole company in the implementation. Each Manager needs to see the importance of the CO2 reduction in their targets, and their variable compensation, and each and every employee should understand the importance, not only for the survival of the company, but also as part of their efforts to make our planet and the population suffer less from natural disasters resulting from climate change.

Concerning the detailed approach for the reduction of CO2 emissions this is strongly dependent on the product portfolio of each company, but here are some general ideas I would like to outline:

1. Energy consumption: The cheapest and most efficient way to reduce CO2 emissions is to reduce power consumption. This means avoid power losses and look for more efficient equipment. You will sometimes be surprised how fast the pay-back for such measures is. Where all these options have been leveraged already the next step is to look for efficiency increase within the verbund of your site. Some units might generate heat, others might require it. The usage of efficient heat exchangers and also heat pumps where it makes sense will bring down CO2 emissions further.

2. Source of energy: Even though natural gas is available and more environmentally-friendly, in many places of the world coal is still the preferred way to run boilers, to generate electricity or to run co-generation plants. Because coal is globally very cheap this is a very cost-efficient way to produce heat or electricity. Unfortunately, from a CO2 perspective this is the worst choice.

But, with the increasing purchasing cost of CO2 credits or surcharges on the procurement cost of coal this advantage of coal will disappear sooner or later. This means not only from an environmental point of view the replacement of a coal fired against a gas-based boiler or co-generation plant will be attractive, but also financially it will be beneficial soon. But even though the use of this bridging technology will result in CO2 savings, it is not a long term solution and will not bring down CO2 emissions to zero.

A much better option would be to run a chemical plant with heat generated by a biomass based boiler and electricity generated from windmills and solar panels. This concept will work well if your plant has access to cheap agricultural waste, and if your energy requirement is not too big. Otherwise, to manage the procurement, and handle the required volumes of biomass will be too challenging. Concerning the supply of renewable electrical energy this can be done through own investment in solar power plants and windfarms, work with an energy supplier who guarantees that he supplies only power from renewable energy sources or a combination of both.

The highest standard from an environmental point of view will only be to run the full plant on renewable electricity, which also means the heat generation will be done electrically from renewable energy sources. This is what BASF for example is planning to do for significant parts of their main site in Ludwigshafen. In a recent announcement BASF explained that they want to invest together with a large power company in the largest offshore wind park in the world. The investment volumes will be €4 billion and 80 percent of the power generated in this wind park will be directly supplied to the Ludwigshafen site in which even crackers are planned to run on renewable electrical energy. Just to underline the magnitude of this conversion: It means the demand of electricity in BASF’s Ludwigshafen site will at least triple from the current 20 Terawatt hours, which will be as much as 15 percent of all electrical energy generated by windmills today in Germany. Additional CO2 savings potential will be realised using green hydrogen.

Unfortunately, it has to be accepted that in general the usage of green hydrogen will be limited to areas where there is surplus of electrical energy or a strong political support and subsidies to compensate for the high energy consumption of H2O hydrolysis. Under normal conditions the process is just too inefficient and costly although from an environmental point of view the production of Hydrogen from water and electricity from windmills is just perfect.

3. Product portfolio adjustment: Active portfolio management under the aspect of reduction of CO2 emissions is an additional way to improve the CO2 balance for the company. By looking at the product portfolio along the two dimensions profitability and CO2 impact you might identify candidates with lower profitability and high CO2 impact you might want to shut down or sell. Equally important can be the sale of production facilities which generate byproducts with high CO2 equivalents if these cannot be avoided.

4. Research and development: It is also important to not ignore the chances, which can result from focused research and development efforts. Looking for more efficient production processes, the avoidance or reduction of unwanted by-products or the reduction of water consumption are targets which will help to make the company consume less energy and thus, greener.

5. Measures to compensate CO2 emissions: If all other activities did not solve the CO2 problem the company faces, this needs to be considered. Investments in climate protection projects are one way of doing this. It is just important to ensure that these are additional projects to have a net effect on the climate.

These efforts will certainly have major financial challenges for companies, and so it is also up to the political decision makers to financially support this transformation or at least create the right framework that these investments will pay off faster. But independent of this aspect it should not be forgotten that a company, which is doing such an effort faster has a major competitive advantage in this new normal and certainly also a major image gain. And very often these projects will finally turn out to be financially positive, be it through the avoidance of buying carbon credits or lower running cost and/or maintenance. But at least equally important is that our children and grandchildren will be thankful to us for having had the far-sightedness to keep the planet as livable as it is today in spite of all the challenges we faced.

Abstract
This article is compiled from a report conducted by nova-Institute and commissioned by Unilever. In this report the total global amount of embedded carbon in products from the chemical and derived material sector is examined.
It shows how this demand is met today and recommends the strategies to meet the embedded carbon needs by 2050 in the transition from fossil to renewable carbon sources. In this report, a comprehensive policy framework for carbon management is discussed, which is necessary to realise the revolutionary transformation of the chemical industry, within a timeline that is in accordance with our climate targets.
Edited excerpts of a few important aspects from the report “Turning Off the Tap for Fossil Carbon” are presented here.
The full report can be downloaded for free:
www.renewable-carbon.eu/publications/product/turning-off-the-tap-forfossil-carbon-future-prospects-for-a-global-chemical-and-derived-material-sector-based-on-renewable-carbon/

Introduction
The climate crisis is accelerating at an unprecedented rate, with global warming,  greenhouse gas emissions and deforestation causing food insecurity, global health concerns and biodiversity loss.

Greenhouse gas emissions linked to the use of fossil- based energy  sources such as oil, coal and natural gas are the main factors contributing to climate change. It has become evident that we can no longer ignore the consequences that the current production methods we have on our planet. Increasing pressure from governments, investors and other stakeholders to transition to renewable energy sources has accelerated the development of solar power, wind farms and hydroelectricity, and of new technologies such as electromobility and green hydrogen. These innovations, however, are not being implemented fast enough. To decarbonise the energy sector by 2050, and ensure the achievement of the goals set out under the Paris agreement, it is essential for the industry to completely phase out its use of fossil fuels.

The chemical industry today relies almost entirely (85%) on virgin fossil carbon as a building block for its products. 92% of global warming impacts are caused by carbon-containing greenhouse gas emissions. Out of these, 80% are of fossil origin. In total, 89% of the carbon extracted from the ground is utilised for energy and fuels, whilst 11% is employed for cement, chemicals and derived materials. The latter will rise tremendously by 2050. The process of “decarbonising” the energy sector and expanding the use of renewable energies is ongoing in many countries.

Carbon Consumed in Chemical and Allied Products
Currently, the chemical sector consumes 14 percent of global oil and 8 percent of global natural gas supply, that represents 723 megatons (Mt) of pure carbon (equivalent to 2,655 Mt of CO2) 5. The largest share of the chemical manufacturing industry, be it plastics or detergents, is still fed by virgin fossil resources. However, decarbonising chemicals is not possible, as carbon is a key element of any chemical compounds. Therefore, the future share of the global oil and gas demand for carbon-based products will sharply increase.

Most of the carbon consumed by the chemical and derived material sector is made from fossil fuels – as is the case for the energy and fuel sectors. This poses a large issue, as the fossil carbon extracted from the ground (oil, gas and coal) eventually ends up in the atmosphere, contributing heavily to global warming. More than 50% of the extracted fossil carbon is released into the atmosphere as CO2 within a short amount of time; this includes plastic and rubber products that are incinerated, or detergents and cleaning agents that simply biodegrade. The remaining percentage initially remains in the technosphere in the form of products, and, depending on logistics and infrastructure, will later also be incinerated or biodegrade (in the environment and landfills) over decades to centuries. In the context of the circular economy, ever larger parts will be recycled in the future. Only then will the influx of emissions into the atmosphere end.

The demand for carbon embedded in organic chemicals and their derived materials is 450 million tons (Mt) per year. 85 percent of this demand is generated by fossil-fuel-based resources, 10% by biomass and only 5 percent by recycling. To create long-lasting and sustainable change, three sources of renewable carbon have been identified that can substitute the utilisation of fossil carbon that is extracted

from the ground: biomass, recycling, and CCU (Carbon Capture and Utilisation; captured CO2, from industrial processes or the atmosphere).

The demand for embedded carbon is set to rise. Increasing population, higher incomes and a growing middle class will drive the need for products and thus also for carbon. By 2050, nova-Institute estimates that the demand for carbon embedded in organic chemicals and derived materials will increase to 1,000 Mt per year. This would necessitate renewable carbon production to be increased by a factor of 15 by 2050. To achieve this demand sustainably, sharing, reusing and recycling will play the main role in keeping carbon in a closed loop, in line with the Circular Economy. Chemical and mechanical recycling industries will be largely responsible for innovating their processes to better reuse and recycle carbon. Since keeping the entire carbon in a cycle is technologically not possible, additional renewable carbon sources such as biomass and CO2 capture and use become necessary. For both options, sufficient land is available for either cultivation of biomass or the production of the required renewable energy for CCU. With these three renewable carbon sources (recycling, biomass and CCU) combined, it will be possible to keep using all the products we are used to without the need for any additional fossil carbon sourced from under the ground.

For the first time since the beginning of the industrial revolution, which was only possible due to the access to cheap fossil carbon sources, we are able to completely decouple the chemical and derived materials industries from virgin petrochemicals. Technologies, as well as investment capital, are available for the transformation from fossil to renewable carbon of the entire economy.

The renewable carbon family is the only pathway to a sustainable future for commonly used materials such as plastics, fibres, surfactants and other materials based on organic chemistry, and the industries that produce them. Adequate carbon management can aid companies in achieving their emission targets and allow them to resolve potential questions such as:
• In a given situation, what is the best choice from the renewable carbon family? Biomass, CO2 capture or recycling?

• Which renewable carbon source is the most sustainable, efficient and socially acceptable solution for a certain application in a given region?

• Is it biomass from wood, sugar beet or metropolitan biogenic waste?

• Is it captured CO2 from fossil power plants, from fermentation or from the atmosphere (direct air capture)?

• Or is it recycled carbon from old plastics via mechanical or chemical recycling?

Once the need for transitioning the entire economy towards the use of renewable carbon is established, these are the questions to be addressed on a case-bycase basis taking into account the desired use and available infrastructure.

The exclusive use of renewable carbon as feedstock is a key condition for the chemical industry to achieve climate neutrality. The use of renewable carbon in the chemical and derived material industry is what decarbonisation is in the energy sector.

Fossil Carbon Strategies
Fossil carbon comes from oil, natural gas or coal, and eventually ends up in the  atmosphere, contributing heavily to climate change. The largest challenge for the chemical industry is to convert its feedstocks from virgin fossil based to renewable-carbon-based.

The chemical industry is a key for a variety of other industries and products. It is a highly interconnected, integrated industry and has been optimised in many ways over decades.  If this system is to be fundamentally changed, well considered strategies are required.
Comprehensive carbon management needs to take full account of the structure of today‘s chemical industry, preserve or repurpose industrial assets where possible, and replace those that have no future in a renewable carbon world.

There are therefore two different strategies for replacing virgin fossil-based products, both of which are important for the transformation and should be developed in parallel.

Strategy 1: Drop-in
The drop-in strategy uses existing structures of the chemical industry, such as refineries
and chemical parks, to initiate the raw material transformation at the feedstock level. Instead of naphtha, methane, ethane, propane methanol (see Figure 9) from fossil sources such as oil, natural gas and coal, the raw materials could be obtained from biomass, CO2 and chemical recycling. The end product stays the same, while the feedstock becomes renewable, and the existing processes and infrastructure largely remain in place. In this case, large amounts of virgin fossil carbon can be substituted quickly.

Strategy 2: Dedicated
The dedicated strategy cares little for existing structures of the large-scale chemical industry. Instead, it builds entirely new structures with new processes to create new raw materials, through biotechnology, wood or electro chemistry. These products often use biomass or CO2 more efficiently and show properties that are not found in any petrochemical counterpart. However, this would require a large amount of time and resources for building up production capacities, and place the products on the market. Dedicated strategies include replacing petrochemical plastic packaging with paper, cellulose or natural fibre packaging.

Both strategies are necessary to achieve the transformation. While the first is mainly suitable for bulk chemicals, the second could be deployed for small-volume special applications. The first strategy would entail adapting the plants of the large-scale chemical industry, chemical parks, integrated sites and oil refineries, that have been optimised over decades, to the new raw materials and intermediate products of renewable carbon.

This requires considerable investment in structural changes, as well as the development and integration of new technologies (e.g. electrochemistry).

The second scenario is heavily influenced by research and innovation, as it often involves the creation of production routes (e.g. biotechnology) for products with different new, and improved properties. This is especially true for fine chemicals with lower volume, but that allow for higher quality products.

While chemical recycling and large-volume CO2 utilisation are usually more suited to the first pathway, biomass (e.g. for fermentation) is often  redestined for the second pathway. The reality, however, is not as black and white as it seems, and one can find any combination between renewable carbon source, process and application that makes sense under certain conditions.

Only Together
What is clear is that this transformation must be worked upon and implemented with high levels of collaboration, all along the value chain: from renewable raw materials via new processes and intermediate products, to final outputs and how to treat them at the end of their lifecycle. From the raw material supplier to the brand manufacturer and trader, the entire value-added chain must be implemented, physically, but also on a political, social and economic level, and supported by marketing. It should be noted that the renewable products will be more expensive. Carbon will never be as cheap as it was in the fossil fuel age, as fossil carbon did not have to bear its external costs. Carbon products will increase in value, meaning that it will be worthwhile to use them for longer time frames; share and re-use them where possible; and to collect and recycle them where not.

Recycling
Developing technologies to share, re-use and recycle products will be essential to keep carbon in the loop. Today, mechanical processes are predominant in recycling. However, these have limitations in terms of what types of waste-streams they can recycle and the
quality of the recyclates. The full potential of recycling can only be unlocked with additional innovative processes such as chemical recycling. In this way, practically all waste fractions, especially mixed ones, can be recycled and turned into high quality feedstock. First, however, large investments need to be made to implement the necessary capacities of chemical recycling plants. With mechanical and chemical recycling, large parts of the carbon (but not all) remains in the cycle. In addition to recycling, other sources of  enewable carbon are needed to close gaps in the cycle and minimize the losses. These sources are biomass and direct CO2 use.

Biomass
The biomass breaks down into either primary biomass from fields and forests, or secondary biomass derived from biogenic waste and side streams (e.g. generated by the agriculture and forestry sector, the food,feed and chemicals industries, the production of wood and paper, and private households). Utilising this kind of “organic waste” will be key in transitioning to a biobased circular economy.

The utilisation of biomass makes particular sense wherever functional and complex  molecular units of the biomass remain intact after chemical conversion, so they can be used further. For instance, oleochemical, natural rubber and lignin applications qualify in this respect as do numerous novel biobased components such as organic acids and furan based products. Washing, cleaning and care agents, as well as polymers based on these new components, frequently outperform existing products with regards to health and environmental benefits. Additionally, industrial biotechnology may aid in manufacturing complex molecules, using short and gentle processes and made-to measure production organisms. Lignin, for instance, a by-product of wood processing, has been little used to
date, however, in the future it could be used in the production of aromatic compounds and asphalt.

Already today, significant quantities of chemicals – between 10 and 15% depending on the world region – are produced on the basis of biomass. Of course, any further expansion of biomass production must pay strict attention to food security and biodiversity loss. Still, experts see potential for sustainable expansion and, above all, prospective yield, efficiency and storage improvements. Despite sometimes unfavourable public perception, food crops are often a good choice for industrial utilisation. This is due to the fact that they produce very high yields per hectare, and often provide protein-rich by-products, therefore, they make for highly efficient and potentially sustainable land-use solutions. Another option is to use the land and facilities that are currently used for biofuel production, as the demand for liquid fuels is set to dwindle over the next few decades due to the rise of electric cars and hydrogen drives. Advanced biodiesel (HVO) is almost identical to naphtha and ethanol, and canfor PE and PET.

There are also some promising approaches for the use of marine biomass, such as micro and macro algae. These have not yet penetrated mass markets, however, they are used for products such as cosmetics and food supplements. Today, the total volume of marine biomass lags far behind agricultural and forestry systems.

Overall, biomass will not be sufficient to provide enough renewable  carbon on its own. Therefore, it is a good thing that biomass is not alone. Which brings us to the third source of renewable carbon: CO2.

Direct Utilisation of CO2
An almost endlessly available source of renewable carbon is carbon dioxide (CO2) and other carbon oxides (e.g. CO) contained in exhaust gases, waste air and the atmosphere. Each of these may be utilised as a raw material for the chemical industry through a number of different technologies.

The field of Carbon Capture and Utilisation offers a wide range of applications, where CO2 can be used as feedstock for chemicals, polymers, fuels, minerals and even proteins. By combining CO2 with green hydrogen, several intermediates and end-products can be produced, such as methane and methanol. In combination with CO2 based formic acid, these can be used as a base feedstock for all kinds of chemicals, polymers and fuels. Synthetic naphtha, for example, can directly replace crude oil naphtha in existing refineries, and can be produced from CO2 and hydrogen through the Fischer-Tropsch reaction. Synthetic naphtha also allows to derive basic chemicals for the production of
higher-grade chemicals and polymers, as well as longchain waxes with high purity levels and value. Some chemicals are by default directly synthesised from CO2, such as urea and other diverse polymers (e.g. polyurethanes and polycarbonates).

In order to make the carbon contained in CO2 reusable, it must be chemically reduced, which requires large amounts of energy, mostly in the form of hydrogen. From an ecological standpoint, this means that only renewable energies or existing process energy can be used for CCU processes to ensure they are sustainable. For this reason, looking ahead, there must be massive, worldwide growth in renewable energies such as solar and wind energy, hydropower and geothermal energy. Based on current trends it is possible to say that this transition is achievable, as many energy systems around the world are already shifting towards renewable options. As shown in the previous chapter, only 0.4 percent of the area of all subtropical deserts would be needed to provide photovoltaic energy for the carbon supply in the depicted 2050 scenario.

The big advantage of CCU technologies over biomass is their high land efficiency and ability to utilize inarable land types like deserts. Disadvantages of CCU include: high investment costs; energy requirements; and the need for construction of new infrastructure. On one hand, the right incentive systems must be created and, on the other, awareness should be fostered that CO2 utilisation, while principally feasible for any application, is especially suitable for the production of bulk chemicals.

According to a Nova press release, there is currently a lot of interest in renewable and green chemistry, bio-based chemistry, CO2 Capture and Utilisation and chemical recycling. Refineries and verbund sites of large-scale chemicals are under considerable pressure; the biofuel industry is looking for new markets in chemistry and start-ups are looking for investors.

Producers of ethanol from biomass or CO2 rich off gases together with plastic producers and refineries are increasingly interested in efficient ways of ethylene production and existing technologies. Producers of HVO advanced biodiesel can also supply bio-naphtha with a few modifications and need to find markets. Newly developed and dedicated chemicals and polymers like PEF need to find their way to the markets, and companies want to know how these will develop in future. Brand owners are not only interested in the immediate polymer procurement intelligence, but also in a secure upstream supply chain for various chemical building blocks. Producers of packaging materials and consumer goods are looking for more sustainable and renewable carbon-based solutions for their products with the same or better properties. Companies with potential feedstocks like bio-wastes or CO2-rich
off-gas streams are looking for technologies to valorise these and need to know about available technologies, costs and potential markets.

Conclusion
Since the beginning of the industrial revolution, humanity has almost exclusively relied on cheap virgin fossil carbon sources such as coal and crude oil for its development. Today, for the first time, we can now decouple the production of chemicals and derived materials
from the use of virgin fossil carbon. All of today‘s chemicals and derived products can be made with renewable carbon from biomass, captured CO2 or recy-able for the transformation from fossil to renewable carbon for the entire industry. The renewable carbon family is the only pathway to a truly sustainable future for the chemical industry.

Renewable carbon reports available from Nova:
1. The need for bio-based carbon in a sustainable future – http://nova-institute.eu/press/?id=271

2. How to meet the global need for carbon as a feedstock in the chemical and derived materials sector in the future? – http://nova-institute.eu/press/?id=259

3. Minimising investment risks in renewable chemistry – http://nova-institute.eu/press/?id=276

4. Carbon economy – http://renewable-carbon.eu/publications/

Some examples of carbon dioxide utilisation which won awards at the 9th conference on CO2 based fuels and chemicals (Excerpted from a Nova press release)

First Place : Carbon Recycling International (Iceland): Emissions-to- Liquids Technology

Carbon Recycling International (CRI) has been developing its Emissions-to-Liquids (ETL) technology since 2006. CRI’s first industrial demonstration plant was commissioned in Iceland in 2012. It has a capacity of 4,000 tonnes methanol per year. ETL converts CO2 and hydrogen into methanol in a one-step reaction. In 2020 the company moved from industrial demonstration scale to full commercial scale with a project in Anyang, Henan province, China. The plant, which will have a capacity of 110,000 tonnes methanol per year, will be commissioned in 2021. This represents an important step for CO2 hydrogenation projects worldwide. The CO2-based methanol is used for gasoline blending, biodiesel esterification, fuel cell operation, waste-water denitrification and chemicals production. More information: http://www.carbonrecycling.is

Second Place: LanzaTech (USA): CarbonSmart Ethanol
The CarbonSmart Ethanol technology allows to capture carbon dioxide and to creating value from waste; effectively turning pollution into products. LanzaTech uses microorganisms to make ethanol from the CO2 and CO emissions of industrial processes like steel, syngas from municipal solid waste, waste wood or waste plastics. Ethanol is a chemical building block that can be used to produce a broad range of everyday products from household cleaning products, plastic shampoo bottles, furniture and toys, to fine fragrances and sporting goods. With a commercial plant in China that has produced over 20,000 tonnes of ethanol and mitigated over 100,000 tonnes of CO2 since 2018, the technology is rapidly gaining traction in the market. The steel company ArcelorMittal (Luxembourg) licensed LanzaTech’s technology and is building the first European plant to convert steel off-gases into CarbonSmartTM Ethanol in Ghent (Belgium). The plant is estimated to have a capacity of 62,000 tonnes of ethanol per year and to mitigate over 350,000 tons of CO2 per year.
More information: http://www.lanzatech.com

Third Place: Covestro (Germany): Washing with CO2-Technology – Surfactants based on CO2
CO2 instead of petroleum – Covestro is pursuing new avenues for turning the waste gas into a useful raw material. The goal is to use CO2 as resource in as many applications as possible. And the next scope is here to come: Surfactants based on CO2. First application
tests have shown that these CO2-based surfactants can be used in a standard detergent formulation. The product development process is still in progress and the boundary conditions are already set: less fossil- based, less global warming potential, readily biodegradable and comparable washing performance – a new class of more sustainable surfactants for the everyday businesses.
More information: http://www.covestro.de