A chemical industry guru points out that the chemical industry will play an essential role in tackling climate change and co-creating a decarbonized and sustainable society. While needing to address challenges, petrochemical companies will also discover substantial business opportunities and sources of growth in this transformative era.
Recently, at an event entitled “The Fast Track to Net Zero,” co-organized by Bangkok Biz News and Dow Thailand Group, Rafael Cayuela, Chair of the European Chemical Industry Association’s Mid Century Vision – Molecules Manager, International Advisory Board of the World Energy Council, Chair of the Industry Advisory Panel of the Energy Charter Treaty, and author of the book “The Future of the Chemical Industry by 2050,” gave the presentation “Global Perspective: Challenges and Opportunities for Business from Net Zero.”
Cayuela said, “This is actually the biggest ever business opportunity in human history—tackling climate change. Decarbonization is not only a scientific issue but a huge business opportunity and the source of growth.”
He explained that there is already growth in some industries related to decarbonization and sustainable development. For example, over the last five years, renewable energy has been growing by 50% annually, while the protein substitution business grew by around 85%. Sustainable finance and many other industries have also recorded significant growth.
Chemical industry success implies humanity’s success
Since a large number of emissions come from the chemical industry, this industry is the key to reaching a net-zero carbon emission target.
According to Cayuela, “The chemical industry is critical for other industries as it contributes to 77% of emissions in the electronics industry, and 80% in infrastructure, automotive, food, fashion, and packaging industries. Therefore, if you want to decarbonize our society, chemical industry is the key to transforming every industry in the value chain. The chemical industry’s success implies humanity’s success.”
He concluded that the chemical industry played a crucial role in creating major innovations over the last century. In this 4th industrial revolution, the industry will restore the balance between nature and humans and co-create and design a sustainable future for everyone.
Tackling sustainability challenges requires innovations
The chemical industry is on a journey of transformation, starting with carbon neutrality. It is moving into more circular and fully circular products and safer and healthier materials, to a point where they should be entirely benign for the environment.
Cayuela says, “Ultimately, we are going into a new space of molecular discovery and design for sustainability. There is a massive growth business model opportunity when you put all this together. It is up to all of us to collaborate to make the most of it.”
Prioritizing climate change and decarbonization is key to future success
Cayuela pointed out that the companies, industries, and nations that can manage the transition will be the winners of the future. In contrast, companies, industries, and nations that do not manage the change will simply disappear.
“Last year, governments of many countries, including the European Union nations, the United States, and China, made the significant commitment to become carbon neutral nations in 2050 and—in the case of China—by 2060,” he said.
The transformation on the regulatory side is moving from the supply side to the demand side. Consumers are taking the lead and providing the premiums and the markets for the companies, industries, and nations that provide the transformation. The financial system is also starting to reward the companies, industries, and nations enabling this transformation—and obviously penalize ones that aren’t,” he added.
Europe has the most comprehensive package for net-zero carbon target
Since countries worldwide have prioritized solving climate change problems, Cayuela said that Europe already has one of the most comprehensive transformation packages in the world, called the European Green Deal, which focuses on sustainable and digital growth.
He said, “You can see all the different kinds of legislation to enable and accelerate the transformation to achieve a carbon neutral target by 2050 and 55% emission reduction by 2030.”