2023, the year to frame the visions
2023 is a year of headwinds for the chemical industry, which will continue through 2024 if the macroeconomic indicators continue to be soft. A time to reflect and prepare for the turning point when companies emphasize the long-term viability of product portfolios in the context of sustainability. With the short-term pressure on cost reduction being so present, being able to set up the framework, milestones and proper indicators to monitor progress is fundamental to achieving long-term success.
In January 2023, the European Commission published the transition pathway for the chemical industry. The outcome of the Transition Pathway is a three-part roadmap with the following components.
1. An action-oriented component grouping the topics under three cross-cutting themes: collaboration for innovation; clean energy supply; and feedstock diversification.
2. A technology component identifying electrification, hydrogen, biomass, waste, Carbon Capture and Utilization (CCU) & Carbon Capture and Storage (CCS), as well as process efficiency.
3. A regulatory component that collects the existing legislation, including major research and innovation (R&I) initiatives, influencing the digital and sustainable development of the chemical industry.
It is now time for the plastics industry to make its move. With The Plastics Transition, the European plastics manufacturers have agreed on a roadmap to accelerate the transition to make plastics circular, drive lifecycle emissions to net zero, and foster the sustainable use of plastics.
Similarly to the Transition Pathway, the Plastics Transition roadmap consists of 3 pillars.
Making plastics circular relies heavily on mechanically and chemically recycled plastics as well as plastics made from biomass, including a shy contribution of carbon capture and utilization-based plastics. Carefully ending up in a gradual projected 65% substitution of fossil-based plastics in a so-called ambitious scenario.
Helping to drive the plastics life cycle to net zero. Plastic production needs to reduce 55 mt of GHG emissions. The four levers necessary to abate these remaining emissions and achieve net zero are energy efficiency, use of renewable and low-carbon fuels, electrification of heat, and utilising carbon capture & storage (CCS).
Fostering the sustainable use of plastics means safe production and use of chemical additives, and includes sharing data across the value chain. I believe this last one has a lot of similarities with the regulatory component of the Transition Pathway for the Chemical industry.
At the end of the day, it is still up to the members to take action, I will be very interested to read the immediate approach being realized and transparently reported a year from now, after another year of expected headwinds.
