Net Zero Industry Tracker 2024 Primary Chemicals

0.20.40.60.81.01.21.4Mt CO2/Mt chemicals BAU Net zero2023 2030 20502050 BAU scenario 1.27 Mt CO2/ Mt chemicals 2050 net- zero scenario 0.03 Mt CO2/ Mt chemicals1.27 1.271.27 0.92 0Readiness Emissions intensity trajectory for the primary chemicals sector FIGURE 59 Source: IEA Net Zero Scenario. Overall primary chemicals demand is expected to increase by 2.3 times488 by 2050. By this time, green ammonia will represent 60% of demand (a fivefold increase from 2022) and methanol 20% (a fourfold increase from 2022).489 Circularity can reduce demand by approximately 20%, saving $1 trillion490 of CapEx needed to abate the system. Production volumes will more than double491 overall by 2050, driven by new net-zero enabling chemical applications in other industries. Reducing demand is also essential to ensure that CCUS requirements remain manageable within current scaling limitations. The chemicals sector needs to decouple from fossil fuels and switch to renewable carbon feedstocks. As a feedstock, CO2 is another decarbonization lever for the primary chemicals industry. Capturing CO2 from industrial processes or the atmosphere and using it as a raw material to produce chemicals, fuels and materials (rather than simply storing it) aligns with the broader goals of carbon circularity, reducing reliance on fossil-based carbon sources. Its abundant availability, potential to close carbon loops and versatility in producing various chemicals make it an attractive alternative to both bio- and waste-based feedstocks.Scaling circularity, switching production from fossil fuels to renewable feedstock sources, retrofitting legacy infrastructure and abating end- of-life chemicals are key operational pathways for achieving net-zero goals. Clearer prioritization for deployment involves establishing a sequence of needs, starting with consistent global regulations to enable large-scale transformative investments. Next, political support for necessary infrastructure is essential, followed by customer willingness to pay, which helps secure the business case. Finally, case-by-case funding is needed to support implementation and manage associated risks effectively. Industry can start with the most cost-effective measures, using abatement cost calculations to ensure the transformation is feasible for society and customers. Energy transformation, being less expensive than material transformation in the chemical industry, is suggested to take priority. Additionally, using existing assets with renewable or recycled feedstock can accelerate deployment, as it is both cost-effective and less capital-intensive. While electrolytic hydrogen is costly for chemical use, blue hydrogen is a viable alternative, potentially reducing CO2 emissions by up to 90%, with minimal additional cost. Net-Zero Industry Tracker: 2024 Edition 5