How Can the Chemicals Industry Capitalize on Carbon Reduction Opportunities?

NORTHAMPTON, MA / ACCESSWIRE / August 21, 2023 / SAP

Foto: Accesswire

The chemicals industry is a $4 trillion business employing upwards of 20 million people. While a consumer of high volumes of energy and resources, it is also at the forefront of developing energy efficiencies, low carbon and renewable raw materials and fuels, chemical energy storage, and materials from CO2 capture. It is also uniquely positioned to pioneer and promote circular economy models by innovating for the easier reuse and recycling of materials.

It is simultaneously the third highest contributor to carbon emissions in the industrial sector and the best placed industry to decarbonize products across a multitude of industries.

As a result of its position high upstream in the supply chain, the chemicals industry can often seem invisible. Its products sit in the value chain of key industries including agriculture, pharmaceuticals, and consumer goods, making up a significant proportion of their Scope 3 emissions. But change is coming that will make companies more accountable for these previously hidden emissions. New legislation such as the European Corporate Sustainability Reporting Directive (CSRD) will reveal the carbon footprint of the chemicals industry as companies with more than 250 employees will be required to report their GHG emissions, including those that lie in Scope 3.

A Vision for the Chemicals Industry

In order to meet new legal requirements and identify opportunities for emissions reduction, the chemicals industry needs to look beyond its current tools and collaborations to upgrade the quality of data - based on primary information rather than averages and estimates - and share access to it. Aligning data structures and using the same semantics will encourage competition among suppliers, galvanizing them to manufacture chemical products with ever lower carbon footprints, benefiting all downstream customers as well as the climate. To realize this vision, the solution will receive actual data from suppliers upstream, using a standardized methodology, allowing companies to calculate their own product carbon footprint so it can then be shared with downstream customers. For broad adoption, this carbon data exchange tool needs to be relatively simple while allowing for secure data exchange.