Governments and corporate net-zero commitments are pushing the petrochemicals industry to cut its emissions by 2050. Despite facing a more complex decarbonization path than any other sector, petrochemicals players’ net-zero targets cover more of the global manufacturing capacity than other heavy emitters like steel and cement. Electrification and carbon capture and storage are likely to play a central role in reducing emissions from the production of high-value chemicals, or HVCs, which are key feedstocks used to make plastics and many manufactured goods.
BNEF estimates that new clean capacity and retrofits for lower emissions will cost the petrochemicals industry an additional $759 billion compared to business-as-usual capacity growth. This is roughly 1% of the $172 trillion estimated by BNEF to be needed to decarbonize the global energy sector by 2050. Decarbonizing chemicals will be capex-intensive, but it is crucial for all new capacity and retrofits beyond 2030 to be net-zero, to avoid the risk of stranding assets over their long lifetimes.
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