Technological breakthroughs

Under growing pressure from environmental regulations and the demand for sustainable development, chemical companies worldwide are implementing a range of breakthrough solutions to reduce carbon emissions and move toward the goal of carbon neutrality by 2050.

Urgent challenges facing the chemical industry

The chemical industry currently accounts for approximately 18% of total global industrial emissions, ranking behind the cement industry at 27% and the steel industry at 25%. According to recent estimates, direct CO₂ emissions from the production of basic chemicals amount to around 925 million tonnes, an alarming figure in the context of increasingly severe climate change.

In particular, the chemical sector consumes nearly 90% of the coal, more than 70% of the oil, and about 55% of the natural gas used in industrial activities. High-temperature processes such as steam cracking, reforming, and gasification—used to produce key chemicals such as ethylene, ammonia, and methanol—require enormous amounts of energy and release significant quantities of CO₂. This presents a major challenge for the transition to clean energy and calls for a fundamental transformation in production methods.

Five key strategies for reducing emissions

A recent study by experts from Kyushu University in Japan has identified five main groups of solutions that chemical companies are deploying to progress toward carbon neutrality. These strategies not only help reduce environmental impacts but also create opportunities to enhance competitiveness in the green economy.

The first strategy is optimizing production processes and improving energy efficiency. Companies are making substantial investments in waste heat recovery technologies, including Organic Rankine Cycle (ORC) systems that significantly improve energy efficiency by converting low-temperature waste heat into electricity. Microreactor technology and advanced catalysts are also being widely adopted to reduce energy consumption and increase reaction efficiency by up to 30–40%. In particular, the electrification of chemical processes is gaining momentum. “E-cracking” technology, which uses electricity from renewable energy sources instead of burning fossil fuels, has the potential to reduce CO₂ emissions by as much as 80–90%.

The second strategy involves the transition to renewable energy, which is becoming inevitable. Leading chemical companies are actively shifting to solar, wind, and biomass energy to replace fossil fuels. Advances such as nano-enhanced photovoltaic technologies and floating solar panels are opening up new possibilities with higher efficiency and lower costs. LG Chem of South Korea has committed to sourcing 100% renewable energy for its overseas facilities by 2030 and for its domestic facilities by 2050, while also minimizing fossil fuel use in naphtha cracking furnaces and converting coal-fired boilers to biomass.

The third strategy focuses on shifting from fossil-based feedstocks to sustainable alternatives such as biomass, recycled CO₂, and chemically recycled plastics within the framework of the circular economy. Research from the University of Warwick shows that chemical recycling via pyrolysis can reduce global warming potential by up to 80% compared with incineration for disposal, and by 50% compared with incineration for energy recovery. Bio-naphtha derived from biomass, CO₂ converted into methanol and polycarbonate, and advanced plastic recycling processes are all contributing to significant reductions in carbon emissions from chemical production.

The Pivotal Role of CCUS Technology

Carbon capture, utilization, and storage (CCUS) technology is considered pivotal to achieving carbon neutrality goals, especially for processes that cannot be fully electrified. Currently, there are three main methods being deployed: pre-combustion capture which treats fuel before combustion to create hydrogen-rich syngas, post-combustion capture which removes CO₂ from flue gas using amine solvents, and oxy-fuel combustion which uses pure oxygen instead of air to create a concentrated CO₂ stream.

BASF, the world's leading chemical group, is developing the world's first large-scale electric steam cracking plant with the goal of reducing CO₂ emissions by 90% in core chemical processes. The company is also implementing innovative methane pyrolysis technology and proven water electrolysis to produce clean hydrogen. Tata Chemicals of India has put into operation the first large-scale CCU facility in the UK, demonstrating a strong commitment to applying advanced technology to reduce emissions.

However, CCUS technology still faces significant economic and technical challenges. The cost of CO₂ capture currently ranges from 50 to 200 USD per ton of CO₂ avoided, depending on the method and scale of deployment. High energy demand during the capture and regeneration processes, especially in post-combustion capture and direct air capture systems, can partially reduce environmental benefits if not integrated with low-carbon or renewable energy sources. Furthermore, the construction of infrastructure to transport CO₂ via pipelines and storage facilities poses major challenges in terms of logistics and finance.

Green Hydrogen - The Key for the Future

Green hydrogen, produced by water electrolysis using renewable energy, is becoming an important solution for reducing carbon emissions in the chemical industry. It can replace fossil fuels in the production of ammonia through the Haber-Bosch process, methanol, and many other chemicals, while also serving as a reducing agent in sustainable steel production. Mitsui Chemicals is deploying a high-efficiency gas turbine system to self-supply energy and reduce 70,000 tons of CO₂ per year at its Osaka plant, while also researching the conversion of naphtha cracking furnaces to use alternative fuels such as ammonia.

However, the cost of green hydrogen production is currently still 2-4 times higher than traditional fossil fuels, requiring strong support from policies and carbon pricing mechanisms. The International Energy Agency (IEA) forecasts that the demand for low-carbon hydrogen will increase sharply, especially in heavy industry and transport, with the expansion of production after 2030 being necessary to achieve long-term climate goals.

Notable Success Stories

Dow Chemical of the US is building the world's first carbon-neutral ethylene and derivatives complex in Louisiana, expected to decarbonize 20% of the company's global ethylene capacity and increase polyethylene supply by 15%. This project uses advanced propane dehydrogenation technology to improve efficiency, combined with techniques to convert off-gas from cracking furnaces into hydrogen and capture CO₂ for storage or use.

BASF is committed to achieving net-zero emissions by 2050, investing heavily in renewable energy production and infrastructure to cut at least 90% of CO₂ emissions in major chemical processes. The company has developed an environmentally friendly methanol production method by using syngas from the partial oxidation of natural gas or biogas, combined with oxy-fuel combustion, gas scrubbing, and CO₂ -free hydrogen. BASF's Energy Verbund system and combined heat and power plants saved 19 million MWh and reduced 6.2 million tons of CO₂ in 2022 thanks to optimizing energy use and recycling waste heat.

Tata Chemicals of India aims to reduce its carbon footprint by 30% by 2030 according to the Science Based Target initiatives (SBTi), while putting into operation the first large-scale CCU facility in the UK. At the Mithapur manufacturing complex, initiatives such as the FBD MUW system, vacuum system adjustments, along with increasing renewable energy production and bicarbonate production, have significantly reduced emissions.

LG Chemical of South Korea aims for "Carbon Neutral Growth" by 2030 and "Net Zero" by 2050, with plans to transition 100% to renewable energy for overseas facilities by 2030 and domestic facilities by 2050. The company is expanding plastic and waste battery recycling, promoting a Zero Waste to Landfill policy across all operations, and collaborating with Taekyung Chemical to convert CO₂ byproducts from hydrogen production into dry ice.

Cosmo Energy Group is implementing many initiatives to reduce Scope 1 and Scope 2 emissions by applying lower-emission fuels such as LNG, hydrogen, and ammonia, integrating renewable energy, and improving energy conservation. The company has partnered with the Abu Dhabi National Oil Company to explore carbon reduction technologies and conduct feasibility studies on CCS/CCUS in Abu Dhabi, while developing a biofuel supply chain from used cooking oil with plans to start full-scale supply of sustainable aviation fuel by 2025.

Challenges and Opportunities Ahead

Despite the huge potential, the chemical industry still faces many significant challenges on the path toward carbon neutrality. High initial investment costs for new technologies such as CCUS and green hydrogen remain the biggest barrier, especially in the context of the chemical industry's low profit margins and fierce international competition. The 40-year lifespan of heavy industrial assets such as blast furnaces and cement kilns emphasizes the urgency of transitioning to cleaner technologies to meet the 2050 carbon neutrality deadline.

Large-scale CO₂ transport and storage infrastructure needs to be built to support the widespread deployment of CCUS technology. Developing a comprehensive CO₂ network, capable of transporting CO₂ from many different sources to storage and utilization sites, is a major challenge due to current shortages. Sustainable feedstock sources such as biomass are also limited, which could hinder the widespread adoption of negative emission technologies like BECCS in the aviation and chemical industries.

Electricity demand is expected to double from 2020 to 2050, with the industrial sector, including chemicals, experiencing the most significant increase, rising by more than 11,000 TWh. This requires a sharp reduction in dependence on fossil fuels and the development of smart grid systems and AI-based energy forecasting to support better and more efficient energy distribution, creating conditions for the transition to fully electrified processes in industry.

However, with the support of policies, carbon pricing mechanisms, and financial incentives, the chemical industry is step-by-step overcoming these barriers. The European Union has established the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM) to manage energy-intensive industries such as chemical production. The U.S. Inflation Reduction Act (IRA) provides extensive funding for industrial decarbonization, including tax incentives for hydrogen production and carbon capture projects.

Policy Recommendations for the Future

To accelerate the transition, experts propose several key recommendations. First, it is necessary to establish a comprehensive economy-wide carbon pricing mechanism to drive emission reductions while ensuring fairness across industries. Carbon border adjustment mechanisms like the EU's CBAM are crucial to prevent carbon leakage and support global emission reduction efforts. International agreements focusing on key sectors like chemicals are necessary to promote international cooperation and technology exchange.

Second, investing in CO₂ transport and storage infrastructure is essential to support CCS technology and integrate it into existing workflows. Building infrastructure for low-emission hydrogen production and distribution is also critical for the chemical industry's transition to net-zero emissions. Advanced data collection and coordination also need to be improved, encouraging industry participation in tracking emissions and promoting data sharing among stakeholders.

Third, there is a need to increase investment in research, development, and technology demonstration. Developing financial mechanisms such as green bonds and innovation funds is essential to stimulate private investment in low-carbon technologies. Investments should focus on key areas such as hydrogen production, CCS, and advanced recycling techniques to drive innovation and accelerate the transition to a sustainable future.

Fourth, create a market for low-emission products through the implementation of carbon contracts for difference to provide financial support for the creation of near-zero emission products, while encouraging public procurement to stimulate demand and accelerate the adoption of sustainable technologies. Promote energy productivity by establishing mandatory energy audits and efficiency standards for industrial equipment, complemented by incentives for recycling and efficient material use to drive sustainable practices.

Finally, manage the transition of existing assets by requiring upgrades to current facilities to integrate advanced low-emission technologies, reducing the risk of stranded assets and ensuring a smooth transition to sustainable operations. The recommendation emphasizes that the chemical industry must adopt supply-side measures while adapting to reduced demand driven by the circular economy.

A Promising Future Outlook

According to the Net Zero scenario of the International Energy Agency (IEA), the global chemical industry is expected to reduce emissions by 20% by 2030 and 93% by 2050, mainly through efficiency improvements, integration of advanced technologies, and improved material efficiency. By 2030, about 80% of emission reductions in the global chemical industry will come from existing technologies such as plastic recycling and reuse, more efficient use of nitrogen fertilizers to reduce the demand for basic chemicals, and the implementation of various energy-saving measures.

After 2030, emission reductions are expected to come from the deployment of emerging technologies such as specialized CCUS methods and electrolytic hydrogen production using intermittent renewable energy sources. This transition involves ensuring 90% of electricity generation is derived from renewable sources, doubling nuclear power capacity, and electrifying half of global energy consumption. The plan also includes implementing technologies to remove 1.7 gigatons of CO₂ annually from the atmosphere through BECCS and DACS.

Artificial Intelligence (AI) is emerging as an excellent tool to support the transition to renewable energy systems. AI has immense potential to make energy systems more efficient, improve solar and wind performance, predict energy demand patterns, and stabilize the grid. AI-based methods also allow for more efficient integration of renewable energy into the power system, predictive maintenance of energy systems, and resource optimization to manage intermittency and storage challenges.

The journey toward carbon neutrality is not only an environmental responsibility but also an opportunity for the chemical industry to reposition itself and enhance competitiveness in the global green economy. This requires close coordination between businesses, governments, and stakeholders, along with a strong commitment to continuous improvement, close progress monitoring, and advanced data collection and analysis. Only through these continuous efforts can the ambitious goal of carbon neutrality for the chemical industry by 2050 be achieved, setting a solid example and paving the way for a sustainable and prosperous future.

Source: "Strategies for achieving carbon neutrality within the chemical industry", Renewable and Sustainable Energy Reviews,  217, 2025