The Roadmap
The natural thing to do when evaluating how a process is currently performing is benchmark it. In our case, when trying to understand how the chemical industry is doing regarding its emissions reduction outlook, we should put it in perspective and ask ourselves, how are the more CO2 emitting industrial sectors paving their way to net-zero? The electricity and heat generation together with the transport sectors generate more than 65% of CO2 emissions globally. Providing solutions and innovation in these value chains will tackle a big chunk of the emissions problem. Moreover, these industries are not operating isolated, but they intertwine with others, which can directly benefit from the actions taken.
Then, we are heading into an era where sector coupling becomes the main instrument for achieving emissions reduction goals. This shift will bring partners together in a never seen before climate of collaborative approach, or at least that is what one could fantasise about. Nonetheless, it must become reality in the near future if we aim to be successful in creating the flexibility needed to move into an energy sector arena with an important share of renewables in their portfolio. The lines between sectors will become blurrier than ever. Some even say that flourishing novel business models will eliminate completely cross-sectorial roadblocks.
What are the common characteristics that are shifting the public and private agendas towards developing a low carbon society?
This question is not only valid for the sectors facing more pressure to change but it is valid for all, emerging and traditional, they will have to go through a transition, which is not risk-free, in fact, financial risks are high.
First and foremost, having a clear vision is key when executing management of change. To that regard we can refer to the European Union ambitions to be climate neutral by 2050, this is also a vision which is in line with the Paris Agreement goal. Moreover, linking how the vision and the strategic milestones connect and contribute to the United Nations Sustainable Development Goals (SDG’s) give focus and strengthen the progression with performance indicators towards achievement. Although independently defined, targets within the Agenda 2030 on the Sustainable Development Goals (SDG´s) and the Paris Agreements are strongly linked, and the achievement of one can affect the feasibility of others.
The most effective way to drive any transformation is to define and execute well-crafted strategy roadmaps, which intent to make the vision come to fruition by achieving clear specific milestones of the specific value chain.
Starting with the energy sector, even though the European long-term vision for a prosperous, modern, and competitive and climate neutral economy was published in November 2018, it is built up on previous efforts. Among which, the roadmap for moving to a competitive low carbon economy in 2050 can be highlighted in 2011, and the energy roadmap 2050 that was published in 2012. Fast-forward to 2021, when reading the later, the challenges and uncertainties listed, as the ten structural changes for energy system transformation keep being recognized, and from an outsider point of view, breakthroughs are yet to happen, at a wider scale, almost a decade later.
At a global level, I should name a couple of leading institutions, such us the International Renewable Energy Agency, IRENA, and the International Energy Agency, IEA, which are publishing their own roadmaps in order to raise the necessary awareness. The energy transition is a global race, and while countries continue their progress in transitioning to clean energy, it needs to be firmly rooted in legislation, consumer awareness, infrastructure and investments.
“The Energy Transition Index, which benchmarks 115 countries on the performance of their energy systems, finds that while 92 of the countries increased their score over the past 10 years, only 10% of countries were able to make consistent gains, showing the need for renewed focus and resilience to meet the climate goals of the next decade.”
When it comes to the chemical sector, collectively it was decided in 2018 to focus on the United Nations Sustainable Development Goals (SDG’s) to articulate the joint vision on what the key impact opportunities to contribute to its most material SDGs and specific SDG targets are.
Although shortly 3 years later, in February 2021 the European Round Table for Industry, ERT, has published the following statement on Sectoral Approaches:
“ERT sees an opportunity to enhance the EU Climate Law as a framework for companies to invest in the green transition through the introduction of indicative Sectoral Roadmaps or Pathways to Net-Zero Emissions. Sectoral Roadmaps would provide a strategy and “soft” policy guidance”
This European Parliament proposal for sectoral roadmaps to net zero is seen as an opportunity to synchronize policy, creating platforms to collaborate in an open and transparent way and provides clarity to investors. Of course, checking what the The European Chemical Industry Council, Cefic, stands for is a referential point. Regarding the implementation of the Climate Law, we are perhaps witnessing a necessary strategic choice adaptation.
“Unlike other sectors that are facing a twin ‘digital and green’ transition, the chemical industry’s challenge is in fact quadruple. In addition to climate neutrality and digitalization, the chemical industry must also factor in circularity objectives and implementation of the Chemicals Strategy for Sustainability – all happening at the same time. That makes a coherent and consistent sectoral approach for the chemical industry a need-to-have. Therefore, we now look forward to work together with the Commission on a joint roadmap for the EU chemical sector. ”
It seems the chemical industry is on its way to join forces with the European Commission to define the strategic roadmap, which proves to be imperative in order to gain commitments and drive acceleration in the decarbonisation rate of the industrial sectors. Just in a reference to literature, industry would need to raise its rate of improvement of the carbon intensity of energy from −0.61% per year in the historical data to −1.65% per year in the decade 2020–2030, so the challenge ahead is quite significant.
