HomeLow carbon futureCould the chemical industry become a net zero hero?

Could the chemical industry become a net zero hero?

This post was originally published by Business Green.

The chemical industry underpins modern life more than most of us know. From paints and plastics to soaps and shoes, over 90 per cent of consumer products involve chemicals in some way. It is also critical in the transition to a net zero carbon economy. Heat pumps, wind turbines, batteries and insulation all rely on it.

But, although vital, this industry is also a major emitter of greenhouse gases and consumer of fossil fuels. It needs to do much more to play its part in a greener economy.

The sector is one of the two largest contributors to industrial emissions in the UK, alongside steel production. Emissions from chemical manufacturing are roughly four times those generated by domestic aviation, so it is surprising how it has been overlooked in climate conversations.

This might be, in part, because it is so diverse and complex, encompassing thousands of different products and processes. There are few perfect and easy climate solutions that will work right across the industry. Indeed, some experts understandably baulk at the term ‘decarbonisation’ because carbon is a component of most chemicals. But however it is described, the chemical industry is not on track to net zero.

Some companies, like BASF and Croda, are taking climate action seriously, and their ambition should be celebrated. A few have set science-based targets with emissions reduction goals in line with the Paris Agreement. Some are buying into carbon capture and hydrogen clusters which will help to bring emissions down, though at significant cost to the taxpayer. But there is little outward sign from most of the industry that it understands the need for climate action, and the sector as a whole lacks a detailed vision for the future. To change this, the government will need to do more to support early movers and speed up the laggards.

Our research has identified three areas where swift action could be achieved. The first is the electrification of the heat needed for chemical industry processes. This has the highest potential for emissions savings, but has been largely ignored as a solution. The capital costs of replacing equipment like gas boilers with heat pumps, as well as exceptionally high electricity prices – higher than in competitor countries – are partly to blame. The government has offered very little support.

Unlike moves towards industrial carbon capture and storage, where loans are being made available, there is limited capital backing for onsite changes in this sector. And there are price barriers, with no prospect of electricity being supplied at the same price as gas, as will be the case for hydrogen.

If the government were instead to guarantee cheap renewable electricity supply to the industry through a mechanism like a green power pool, it would instantly make electrification viable for the industry. The government says it wants to attract global investment, cut emissions and maintain a thriving industrial base, lowering electricity prices could be the key to that. The recent announcement of a ‘British Industry Supercharger’ scheme is good news, but it is not going to cut electricity costs by enough for the needs of the chemical industry.

Chemical manufacturers need to consider their emissions from upstream and downstream processes as these are significant. Often they are 60 to 70 per cent of the total lifecycle emissions of a chemical product. But a circular economy for chemicals would make a big difference to this. New circular business models can extract much more value from the more efficient use of chemicals. Rather than continuing to maximise production, greater circularity – keeping resources in the system – would help to minimise it, bringing down emissions in the process. Chemical leasing schemes, optimising fertiliser application and better design for reuse and recycling are some good examples of what could be done.

The chemical and fossil fuel industries have been intimately entwined for years. But changing the dominance of fossil fuel as the industry’s primary feedstock will be crucial. For decades, we have produced chemicals, especially plastics, from fossil fuels. But, as demand for fossil fuels in other areas of the economy declines, their affordability and availability for chemical production cannot be guaranteed. And, if fossil carbon is used to make chemicals, it is another source of emissions, as it is often released to the atmosphere at the end of a product’s life. Fortunately, there are alternative sources of carbon and hydrogen, such as plant material, green hydrogen and captured carbon dioxide. But all them have environmental and economic trade-offs, for instance pressures on land and technology costs, so there is no simple substitute. This is why resource efficiency should be the first consideration for this sector.

The conversation around the choices facing the chemical industry needs to start now. Getting to a net zero carbon economy means no sector can avoid the need to make a clear and ambitious plan to get there. And that includes the chemicals industry.

Written by

Liam Hardy is a policy analyst at Green Alliance, working across various topics including power sector, methane emissions, hydrogen, chemicals and transport. He previously managed an online course on climate change at, and was a data analyst at Good Things Foundation. Before that he taught physics and astronomy at the University of Sheffield.