How to clean up the dirtiest parts of chemicals manufacturing

You’d be hard-pressed to find an object within arm’s reach that didn’t require a carbon-intensive chemical process or oil-refining step on its path to appearing in your home, car or office.

Petrochemicals are the building blocks of our packaged, coated, molded, lubricated, stretchable, sealed and shipped civilization. They’re used in the production of paints, plastics, clothing, tents, medicines, fertilizer, pharmaceuticals, phones, and the fossil fuels that transport these items around the world. Their production also presents a significant problem for the planet, sending both toxic pollution into local communities and huge amounts of carbon emissions into the atmosphere.

When it comes to carbon emissions, industries such as cement, steel and hydrogen have a reputation for being hard to abate. But cleaning up those materials might be a walk in the park compared to decarbonizing the pervasive, complex and massive petrochemicals and refining industry.

This problem is especially acute for the U.S., which despite its ambitions to be a global leader on decarbonization is also one of the world’s largest producers of chemicals.

“The chemicals industry enables our modern economy and modern life, but it is one of the leading sources of industrial greenhouse gas emissions in the United States. The good news is there’s opportunity for us to do things to reduce those emissions. There are lots of…options available for companies and consumers,” said Brian Payer, senior principal in the Climate-Aligned Industries practice at clean-energy think tank RMI. (Canary Media is an independent affiliate of RMI.)

With the industry just starting on its decarbonization path, the U.S. Department of Energy issued a blueprint for how to tackle this problem economically and at scale in its Pathways to Commercial Liftoff report. It states that in order to remain on track with national decarbonization goals, the chemicals and refining sector must reduce emissions by 35% through 2030 and more than 90% by 2050. The report identifies the leading emitters in the U.S. chemicals industry and singles out the top strategies to maximize near-term emissions reduction.

Where do chemicals and refining emissions come from?

Approximately 80 percent of U.S. chemicals-related emissions are generated by these subsectors and processes. Here’s a breakdown of how much each process contributes to the chemicals sector’s emissions:

• Oil refining, 45%: These emissions stem from processes that remove impurities from crude oil or upgrade the crude into end products such as transportation fuels, industrial feedstocks and lubricants. The U.S. was both the world’s top oil producer and top oil refiner last year.
• Natural gas processing, 11%: This process entails removing impurities such as sulfur and CO₂ from raw fossil gas and extracting compounds such as ethane for use in ethylene production. The U.S. is also now the world’s largest exporter of liquefied natural gas. 
• Steam methane reforming, 9%: This is used to produce hydrogen. It can be combined with nitrogen in the Haber-Bosch process to make ammonia, which is primarily used in fertilizer.
• Steam cracking, 8%: The ​“cracking” process used to make petrochemicals such as ethylene makes use of giant furnaces brought to red-hot temperatures with fossil fuels in order to break or ​“crack” molecular bonds. It’s this cracking step that’s responsible for most of the CO₂ emissions connected to petrochemical production. 
• Chlor-alkali process, 5%: This produces chlorine and caustic soda by subjecting saltwater brine to electricity and mid-temperature heat. Chlorine is used extensively across industries, notably in plastics production, PVC pipe and disinfectants.
• Other chemicals, 22%: This grab-bag category includes the production of chemicals such as urea, formaldehyde, polyethylene, polypropylene, styrene and ethylene dichloride.

The levers for cutting carbon from chemicals production

Producing chemicals and refining fuels is a complex endeavor that involves hundreds of processes — but two of the primary carbon offenders in this industry are cracking furnaces and steam methane reformers, tried-and-true industrial processes that burn an enormous amount of fossil fuels. Achieving near-term emissions reductions in these two processes is one major near-term goal set forth in the DOE’s report.

For the first task — decarbonizing cracking furnaces — electrification holds some promise. The fossil-fueled energy that drives chemical production today can be replaced with carbon-free sources such as solar, wind or nuclear power.

Development of electric crackers or ​“e-crackers” has already begun. As Canary Media’s Maria Gallucci reports, Shell and Dow, two major chemical manufacturers, are working on an experimental electrically heated steam-cracker furnace. Meanwhile, another chemical consortium comprising Linde, BASF and Sabic is completing construction on a demonstration plant in Germany. In the U.S., LyondellBasell recently announced tentative plans to join these early e-cracker efforts.

Nevertheless, manufacturers are still in the research and development stage and years away from full-scale commercial electric crackers that can produce the extremely high temperatures needed to power these processes.

But the technology to electrify low- and medium-heat applications, using equipment such as heat pumps, e-boilers and electrified compressors, is available today, according to the DOE report. Electrification of these processes with renewables could account for approximately 25 percent emissions reduction for the industry by 2050, but it would require long-duration energy storage or thermal energy storage to help deliver firm power for the 24/7 operational demands of chemical and refining facilities.

The sheer volume of clean firm power needed to electrify these processes is bound to become a limiting factor. Up to 180 terawatt-hours of clean firm power would be required by 2030 to support the electrification of the chemicals and refining industries, as per the report — for context, the U.S. used 4,050 terawatt-hours of total electricity in 2022.

The second major carbon offender in this sector, steam methane reformation, subjects methane to high-temperature, high-pressure steam and produces hydrogen, along with a concentrated stream of carbon dioxide. The presumed solution is using ​“green” hydrogen made with renewable or nuclear energy as a drop-in replacement feedstock instead of hydrogen produced with fossil gas. But for now, clean hydrogen is found mostly in PowerPoint presentations. Almost all of the hydrogen used today for ammonia production and oil refining is made with fossil gas using the steam methane reformation (SMR) process.

Billions in tax incentives from the Inflation Reduction Act could help shift steam methane reformers to clean hydrogen, which can also be directly combusted in existing equipment or converted to electricity by a fuel cell. (Whether these incentives will actually lead to lower emissions is a question mark at the moment, as the government has yet to finalize guidance on what constitutes genuinely ​“clean” hydrogen. More on that here.)

Refineries switching hydrogen production from SMR to electrolyzers could abate millions of tons of CO₂ by 2030, but just like electrifying the cracking process, that would require significant new clean electricity infrastructure.

Working out how to cost-effectively electrify crackers with renewable energy and scaling up truly clean hydrogen production are the two most impactful ways to decarbonize chemicals and refining. But the DOE points out a handful of other approaches as well.

Implementing energy-efficiency and operational upgrades at facilities can simply lower their demand for dirty energy. Carbon capture and storage technology installed on concentrated high-purity streams of CO₂ at fossil gas processors can mitigate hard-to-abate emissions by capturing CO₂ and storing it long-term; the historically dubious economics of CCS are vastly improved by incentives in the Inflation Reduction Act. Using lower-carbon feedstocks such as industrial/​consumer waste products, including plastics, biochemicals and biofuels, to replace fossil fuels for heat sources and materials could reduce emissions in the chemicals and refining industry.

This industry could lower its emissions by about 20 percent through the mid-2030s ​“without further government support” by applying a mix of these solutions, according to the DOE report.

Innovation will shine through

It’s been almost 200 years since the first oil well was successfully drilled, setting the stage for refined petroleum fuel and byproducts to fill our lives with both technological wonders and ecological tumult. Confronting the carbon content of this deeply embedded and integral industry is going to require a concentrated effort by private, public and consumer forces — and the stakes couldn’t be higher. DOE points out in its report that ​“reducing emissions in the chemicals and refining sectors is critical to bolstering American competitiveness, retaining the ability to sell in global markets, and achieving U.S. emission reduction targets in the decades to come.”

It’s still early days for decarbonization in the chemicals and refinery world. Most firms are currently focused on efficiency measures and circular economies, with a few instances of market pioneers investing in decarbonization pilots such as electric crackers.

Many large chemical companies have made good-faith decarbonization commitments, but absent a regulatory mandate, these firms are more responsive to market forces like incentives, price premiums and consumer preferences than carbon accounting.

And though the DOE report focuses mostly on the carbon impact of the chemicals production and refining processes, these are not even the most carbon-intensive part of the industry’s value chain. That distinction goes to end-market use — largely from the burning of fossil fuels. On the other end of the chain, upstream extraction, transport and storage are notorious leakers of methane, a gas more climatically threatening than CO₂.

In other words, the more we decrease reliance on fossil fuels, the easier it will be to cut the carbon footprint of chemicals and refining, too. 

RMI’s Payer foresees economic solutions developing rapidly over the years and decades to come, boosting the market incentives for companies to decarbonize.

“What I think gets missed here is people just constantly miss the pace of technological change and innovation. We completely whiffed on solar and wind. It’s expensive, it’s more expensive, more expensive, more expensive, and then all of a sudden it’s a market winner.” He thinks it’s likely that technology breakthroughs will follow a similarly surprising trajectory in the chemicals and refining space.

“These are the types of manufacturing processes that can benefit from learning curves and economies of scale. Innovations in the heavy-process industries happen at a different pace and different scale than software. It may look slow relative to the product cycle of your iPhone — but innovations will come through.”