Decarbonizing the Chemical Industry: Assessing Trends, Technologies, Challenges and Case Studies

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According to the IEA, the chemical industry is the largest industrial energy consumer and the third-largest industry in terms of direct CO₂ emissions. The industry is highly dependent on fossil fuels both as an energy source and a feedstock for chemical production. In addition, high energy requirements make chemical emissions hard-to-abate. Given that chemicals are in approximately 95% of manufactured goods, it is of the utmost importance to decarbonize the industry to achieve net-zero.

This report assesses the suitability of energy transition technologies and strategies, including process efficiency, electrification, alternative feedstocks, hydrogen, and CCUS, all of which have significant decarbonization potential for chemicals. Additionally, this report also presents an overview of emissions performance, as well as both interim climate and net-zero targets across key chemical companies. This provides an outlook on industry progress towards net-zero.
Technologies that can help the industry achieve decarbonization will become commercially viable at different times, influenced by varying levels of technological maturity, existing industrial applications, and market demand. Many energy transition technologies are still emerging and remain expensive. Even when technology costs decrease, scaling up production and developing the necessary infrastructure for industry-wide decarbonization may require significant time and investment. Challenging market conditions can exacerbate this.
The decarbonization technologies identified within this report can be broken down into strategies that provide near and long-term emissions reduction. Short-term emission reduction will focus on electrification to reduce emissions and on improving process efficiencies to reduce energy demand. However, decarbonization objectives cannot be met by simply increasing efficiency, and although some processes can be electrified, the majority of energy requirements for chemical production cannot rely on electrification alone. As such, long-term emission reductions will be achieved through CCUS, low-carbon hydrogen, and biomass and waste feedstocks.

Scope

Overview of chemical emissions, global chemical production, and what the net-zero scenario for chemicals looks like

Net-zero targets for selected chemical companies

Analysis of chemical companies’ interim emissions targets

Chemical companies’ Scope 1 and 2 emissions data

Analysis of different decarbonization technologies (process efficiency, electrification, CCUS, alternative feedstocks, hydrogen), including an assessment of their development stage and suitability for the chemicals industry

Macroeconomic challenges facing the decarbonization of chemicals

Case study examples of decarbonization technologies being used within the chemicals industry

Key Highlights

The industry is the largest industrial energy consumer and the third-largest industry subsector in terms of direct CO2 emissions.

According to the IEA, despite forecasted growth in demand for the industry’s outputs, its emissions must peak in the next few years and decline by around 15% relative to current levels by 2030 to get on track with the NZE Scenario.

Most chemical companies are targeting 2050 as the year to achieve net-zero. Notably, Reliance Industries has set an ambitious goal to become Net Carbon Zero by 2035.

Due to the industry’s dependence on hydrocarbons for feedstock and energy, CCUS is seen as a priority technology for the industry’s current decarbonization efforts.

As of 2024, CCUS capacity for the chemicals industry accounted for 1.8mtpa.

Similarly, low-carbon hydrogen, from renewable sources or through carbon capture, has the potential to decarbonize the chemical industry by replacing grey hydrogen as a feedstock or as an alternative energy source instead of traditional hydrocarbons.

The capacity of low-carbon hydrogen allocated to chemicals is predicted to grow at a substantial pace from 2025 to 2030, reaching over 2.3mpta

Reasons to Buy

Identify the market trends within the industry and assess what the biggest players in chemicals are doing to reduce emissions.

Develop market insight of the major technologies used to decarbonize the industry, including an assessment of their development stage and suitability for the chemical industry, alongside the drivers and barriers to their implementation.

Facilitate the understanding of what is happening within hard-to-abate industries as they look to become carbon neutral by 2050.

Air Liquide
BASF
Dow
ExxonMobil
Formosa Plastics
INEOS
LG Chem
Linde
LyondellBasell
Mitsubishi Chemical
PetroChina
Reliance Industries
SABIC
Sinopec
Yara
CEFIC
Evonik
Clariant
Econic Technologies
Citrine Informatics
Greenback Recycling Technologies
Enval
Technip Energies
Vattenfall
Ecolab
Low Carbon
China National Coal Group
Shaanxi Yanchang Petroleum
Lake Charles Methanol
Roskhim
BIA Energy
CF Industries
Mitsubishi Gas Chemical
OCOchem
Genomatica
Sumitomo Chemicals
LanzaTech
SEKISUI Chemical
OMV
Neste
Braskem
IEA
RMI
Enagas
Eni SpA
GazelEnergie
Terega
Cummins
EcoSolifer
European Energy
Meyer Burger Technology
Equnior
ADNOC
ENEOS
Mitsui & Co
Enertag
Nicholas Holdings
Allied Green Ammonia
Copenhagen Infrastructure Partners
Uniper

Table of Contents

Executive Summary

Chemical Emissions

– The chemical industry’s contribution to global CO₂ emissions

Chemical companies’ net-zero and emissions targets

– Net-zero targets for chemical companies

– Interim emission targets

– Scope 1 and 2 emission disclosures

Decarbonization strategies in the chemical industry

– Key decarbonization technologies in the chemical industry

– Assessment of the suitability of technologies for decarbonizing chemicals

Challenges to decarbonizing chemicals

Process efficiency

– Achieving improved process efficiency in chemicals

– Process efficiency case studies

Electrification

– The increasing electrification of the chemical industry

– Electrification case studies

Alternative Feedstocks

– The potential of alternative feedstocks for chemicals

– Alternative feedstocks case studies

Hydrogen

– The chemical industry as a key end-user of low-carbon hydrogen

– Low-carbon ammonia and methanol production is on the rise

– Key countries exploring low-carbon hydrogen for chemicals

– Largest upcoming low-carbon hydrogen projects targeting chemicals

– Hydrogen case studies

CCUS

– Role of CCUS in decarbonizing chemicals

– Largest carbon capture projects dedicated to the chemical industry

– CCUS case studies

Table

Net-zero targets of selected chemical companies

Select chemical companies' interim emission targets

Scope 1 and 2 emissions by chemical companies 2020-2024

Assessment of the suitability of the technologies for decarbonizing chemicals

Largest carbon capture projects dedicated to the chemical industry

Largest upcoming low-carbon hydrogen projects targeting chemicals

Figures

Direct CO2 emissions from primary chemical production in the Net Zero Scenario 2015-2030

Growth in primary chemical production in the Net Zero Scenario 2015-2030

Process energy for primary chemical production 2015-2030

Leading chemical companies by percentage of electricity consumption from renewable sources in 2024

Select chemical companies' renewable energy capacity by technology as of October 2025

Carbon capture capacity with chemicals and petrochemicals as facility industry as of October 2025

Net low-carbon hydrogen capacity allocated to the chemical industry 2022-2030

Net low-carbon ammonia capacity allocated to the chemical industry 2022-2030

Net low-carbon methanol capacity allocated to the chemical industry 2022-2030

Top 10 countries by net low-carbo hydrogen capacity allocated to the chemical industry by 2030

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