CERAWeek India: LyondellBasell preparing decarbonization toolkit for 2050 net-zero target

Chemical producer LyondellBasell is taking a diverse approach to reducing GHG emissions in its operations for the next 30 years, according to CEO Bob Patel.

In late September, the New York-listed company pledged to reduce its Scope 1 and 2 emissions by 30% from 2018 levels before 2030 and achieve net-zero emissions by 2050.

LyondellBasell had previously only targeted cutting its GHG emissions per metric ton (mt) of output by 15% from 2015 levels by 2030.

"We took great care in thinking through a path to net zero," Patel told the India Energy Forum by CERAWeek, an IHS Markit event.

"I think it's going to take a lot of different actions to get to net zero," he said during a panel discussion.

LyondellBasell's decarbonization toolkit includes more use of renewable energy, increased plastics recycling, flare minimization, process electrification, enhanced energy management, more usage of low-carbon fuels, and carbon capture and storage (CCS).

"There will be continued work on energy optimization within our assets, so they consume less energy to produce a ton of output," said Patel, whose company has 94 manufacturing sites in 32 countries.

The chemicals major aims to increase the share of renewable energy in its electricity mix to at least 50% in 2030 from just 1.1% last year.

LyondellBasell estimated this would require the company to procure 4.9 million MWh per year from renewable sources by 2030. The shift can reduce its CO2 emissions by 2 million mt.

Company data showed its GHG emissions amounted to 24.1 million mt of CO2-equivalent (CO2e) last year, up from 24 million mt in 2019. Patel admitted LyondellBasell's decarbonization goals are "quite ambitious."

The company said it planned to secure more electricity generated from wind and solar in the US and Europe via some corporate power purchase agreements, without elaborating.

Separately, LyondellBasell will phase out coal usage at the power plant that supplies electricity to its olefin and polyolefin production facility in Wesseling, Germany by December 2023. The company has signed a deal with Evonik to buy high-pressure steam generated from natural gas as replacement power.

"We will be using lower [GHG] emitting fuels, switching from coal to natural gas and eventually to renewables," Patel said.

Beyond 2030, CCS, carbon utilization, and green hydrogen are expected to come into play for LyondellBasell to reach its goal.

"There is no one single action that will take us to net zero. It is going to take a series of actions to get there," Patel said. "But we really believe that there is a path to net zero by 2050."

Peer pressure

Aside from LyondellBasell, Dow, BASF, Orbia, Braskem, Sinopec, Sumitomo Chemical, and Mitsubishi Chemical are among the major chemical producers that have committed to either carbon neutrality or net-zero GHG emissions by 2050.

As the largest industrial customer of oil and gas, the chemical sector has been under scrutiny amid global decarbonization efforts.

The downstream plants are highly energy intensive. According to a study by Bennington College's Beyond Plastics project, US plastics producers are emitting at least 232 million mt of CO2e per year—the equivalent of 116 average-sized coal power plants.

In the scenario of a net-zero world in 2050, the International Energy Agency (IEA) said CO2 emissions from chemical plants globally will initially need to be reduced from 1.3 billion mt in 2020 to 1.2 billion mt in 2030.

With plastics being key materials in producing power storage systems and green energy equipment, many analysts expect chemical producers to continue increasing their output and consuming more energy in the coming decades.

The IEA expects the sector's oil demand to increase from 12.5 million barrels per day (b/d) last year to 14 million b/d in 2030. But the Paris-based energy watchdog said the decarbonization target can still be achieved if chemical producers use energy and nitrogen fertilizers more efficiently, and recycle and reuse more plastics.

According to the IEA, global average plastic recycling rates will have to rise to 27% in 2030 from 17% today.

"The biggest challenge today, as we think about scaling our recycling operations, is the availability of waste," Patel said. "We've got to get the waste to be collected, get it out of the landfills and into recycling plants."

LyondellBasell formed the Alliance to End Plastic Waste with about 80 chemical and plastics makers, converters, consumer goods companies, retailers, and waste management firms in a bid to enhance recycling operations.

"To address this issue of plastics waste, we must collaborate across the value chain and innovate," Patel said.

"We would provide catalytic capital to allow for this innovation" in waste collection and management via this alliance, he added.

In May, LyondellBasell also set up a $25-million fund with Dow and Nova Chemicals to invest in scalable recycling technologies, equipment upgrades, and infrastructure.

Separately, the company aims to produce and market nearly 2 million mt of recycled- and renewables-based polymers annually by 2030.

"Only about 70% of the [plastics] waste is recovered [now]. And, of that recovered waste, only 15% is recycled," Patel said. "I think that 15% could easily be doubled by the end of the decade."

Future technologies

However, to achieve the midcentury target of net-zero emissions, the IEA said CO2 emissions from the chemical sector need to decrease to 66 million mt in 2050 from 1.2 billion mt in 2030. This sharp fall, 11 times more than the required reduction in the next decade, will call for widespread adoption of CCS and more hydrogen-based production—the technologies for which remain under development.

For the long run, Patel expects oil and gas to remain important feedstocks for chemical plants as new low-carbon and abatement technologies develop.

"There's still more innovation to be done. A lot of these technologies are not yet proven, or they are capital intensive," he said.

Patel, who will exit the top spot at LyondellBasell at the end of 2021, stressed that he is nonetheless optimistic about the industry's decarbonization process.

"Energy transitions happen over decades. They typically don't happen over a year or two, partly because there's so much investment required in infrastructure…But as we've seen with other changes in our industry, as innovation takes hold, the economics tend to come into our favor," he said.

"The transition will occur over the next 10, 20, 30 years. But there's no doubt that it will occur, and the pace will become faster as Innovation takes hold," said Patel.

Posted 25 October 2021 by Max Tingyao Lin, Principal Journalist, Climate and Sustainability