New US, Canada emission goals may raise chem demand from EVs, buildings

HOUSTON (ICIS)–Ambitious emission targets announced by the US and Canada could increase demand for plastics and chemicals used in renewable energy, efficient buildings and electric vehicles.

These new materials will come at a cost that could be borne by consumers. And chemical companies could bear some costs of their own as they search for ways to reduce their own greenhouse-gas emissions.

THE TARGETS
During the Leaders Summit on Climate, US President Joe Biden announced a goal to reduce US greenhouse-gas emissions by 50-52% below their 2005 levels by 2030.

By 2035, he wants a zero-carbon power sector. By 2050, he wants the US to reach net-zero emissions of carbon dioxide (CO2). Other goals include electrification of buildings as well as lower carbon emissions from transportation and industrial processes.

Canada also announced new targets for cutting greenhouse gas emissions. By 2030, these would fall by 40-45% from 2005 levels. The previous target was 30%.

OPPORTUNITY FOR CHEMICALS
Chemical companies have long identified sustainability as a source of new demand.

Wind turbines are made with epoxy resins. Solar panels use ethylene vinyl acetate (EVA) and polyvinyl butyral (PVB).

Stricter emission standards could speed up the adoption of electrical vehicles (EVs). These consume more plastics and chemicals than those powered by internal combustion engines.

Already, Dow and Celanese are anticipating larger demand for their products if electric vehicles become more common.

Adhesives producer HB Fuller expects to benefit from both electric vehicles and renewable energy.

Buildings and homes could require more insulation to reduce energy consumption. That could increase demand for sealants, polyurethane foam and expandable polystyrene (EPS).

Appliances such as freezers and refrigerators may also require better performing insulation.

PRESSURE TO CUT EMISSIONS
Chemical companies will fall under more pressure to find ways to reduce the emissions that come from their plants.

Chemical manufacturing represents 3-4% of all US greenhouse gas emissions, according to the American Chemistry Council (ACC).

Reducing these could be a challenge because a lot of these emissions are connected to generating process heat.

Companies could turn to electricity to generate this heat.

Recently, BASF, SABIC and Linde have signed an agreement to jointly develop electrically heated steam cracker furnaces.

Dow and Shell are also researching ways to electrify steam crackers to reduce CO2 emissions.

Longer term, plants could rely on hydrogen for a fuel.

Chemical plants and refineries could rely increasingly on carbon capture and storage to reduce their net emissions of CO2.

For its part, the ACC has put forward a three-point plan centred around developing and deploying clean manufacturing technology, pricing carbon and promoting the adoption of emission-reducing solutions, such as carbon capture utilisation and storage (CCUS).

For refineries, stricter emission standards could speed up a transition away from fossil-fuel production. Many are already converting units to produce renewable diesel from vegetable oils and animal fats.

Others may focus output on petrochemicals if demand declines for petroleum-based fuels.

Additional reporting by Stefan Baumgarten, Joseph Chang, Jonathan Lopez, Janet Miranda and Graeme Paterson

Thumbnail image shows electric vehicles. Photo by Imaginechina/REX/Shutterstock

Focus article by Al Greenwood