TowardsaNet-ZeroChemicalIndustry:AGlobalPolicyLandscapeforLow-CarbonEmittingTechnologiesWHITEPAPERMAY2022IncollaborationwithAccentureContentsForewordExecutivesummary1Introduction2Methodology3LCETpolicyanalysisbyjurisdictionChinaEuropeanUnionJapanSaudiArabiaUnitedArabEmiratesUnitedKingdomUnitedStatesofAmerica4Ataglance:thecurrentstateofLCETsupportConclusionAppendix:AbbreviationsContributorsAcknowledgementsEndnotes34571011131517192123253031323234Images:Unsplash,GettyImages©2022WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.DisclaimerThisdocumentispublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinarearesultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForumbutwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.TowardsaNet-ZeroChemicalIndustry2ForewordAstheworldmovestowardsanet-zerochemicalindustry,theWorldEconomicForum’sinitiativeonlow-carbonemittingtechnologies(LCETs)standsoutforitsscopeandambition.Accenture’scommitmenttoasustainablefutureanditslong-standingindustryexpertisemadeusnaturalpartnersinthisimportantendeavour.EssentialasLCETswillbeforthechemicalindustryofthefuture,todatetheyfacechallengesthatrequirecollaborativeefforts–includingfromindustryplayers,organizationsforpublic-privatedialogueandknowledgepartners.FocusingonthepoliticalandlegalenvironmentaffectingthedevelopmentandupscalingofLCETs,weconductedanin-depthpolicyassessmentacrosssevenjurisdictions,fivetechnologyareasandsixpolicyclusters.Qualitativeandquantitativedatawasgatheredthroughmorethan20expertinterviewsandAccentureresearch,andwasmadecomparableandassessedbyabespokepolicymodel,which–tothebestofourknowledge–isuniqueinthisfield.Aselectionofresultsandinsightsdrawnfromthismodelarepresentedinthispaper.Ourhopeisthatthispolicylandscapepaperwillfindmanyinterestedreaders.Itshouldalsoprovidesupportforstrategicdecision-makingandlayafoundationforcontinuingpublic-privatedialoguetowardsanet-zerochemicalindustry.HolgerVegelanManagingDirector,ChemicalsandNaturalResourcesASG,AccentureJörgenSandströmHeadofEnergy,Materials,InfrastructureProgram–IndustrialTransformation,WorldEconomicForumTowardsaNet-ZeroChemicalIndustry:AGlobalPolicyLandscapeforLow-CarbonEmittingTechnologiesMay2022TowardsaNet-ZeroChemicalIndustry3ExecutivesummaryAsacornerstoneoftheglobaleconomy,thechemicalindustryistightlyinterconnectedinacomplexwebofvaluechains,contributingtoallgoods-producingindustrialsectors,andplaysavitalroleinthetransitiontowardsaglobalnet-zerosociety.Theso-calledlow-carbonemittingtechnologies(LCETs)areimportantbuildingblocksinthechemicalindustry’snet-zeroendeavour.TopropelLCETsforward,theWorldEconomicForumandmajorchemical-sectorcompaniesfoundedtheLow-CarbonEmittingTechnologiesInitiative.Whileofferingsignificantdecarbonizationopportunitiestoallindustrialvaluechains,LCETsstillfacevariouschallenges.ThedevelopmentandupscalingofLCETsdependstronglyonfavourablepolicyenvironments,rangingfrommonetaryincentivestodemand-sidepolicies.Analysesofsevenjurisdictionscoveringabout50%ofglobalgreenhousegas(GHG)emissions1(China,theEuropeanUnion,Japan,SaudiArabia,theUnitedArabEmirates,theUnitedKingdomandtheUnitedStates)acrossfivekeyLCETareas(biomassutilization,carboncaptureandutilization,electrification,alternativehydrogenproductionandwasteprocessing)revealedthefollowinginsightsaboutexistingpolicysupport:–HydrogenreceivesthemostattentionandpolicysupportamongLCETareas–CarboncaptureisonaparwithhydrogenproductionintheUnitedStates–ElectrificationofprocessesisonaparwithhydrogenproductionintheEuropeanUnion–Biomassutilizationandwasteprocessingwillbothlikelyseeadditionalpolicysupportinthenearfuture,movingawayfromfossilfeedandfuel–Besidesincreasedincentivesandclimatetargets,onaverage,technologyandinfrastructurepoliciesarestrengthenedinallanalysedjurisdictions–Supportivemeasures,e.g.fundingschemes,varysignificantlybetweencountries,butareemergingormaturingacrosstheglobe–Whileontheriseinsomecountriesandacrossborders,policiesstimulatingdemandforsustainablyproducedgoodsarenotyetafocusIncreasedpolicyambitionssupportingthedevelopmentandupscalingofLCETsareinfluencedbyanumberofgloballyemergingthemes,alongsidenationalorregionalapproaches,reflectingpoliticalandlegaltraditionsaswellasstrategicconsiderations.Thisworkintendstogiveahigh-leveloverviewofthecurrentpolicylandscapeacrossthejurisdictionsandLCETareasmentionedabove.Itshouldlayafoundationforfurtheranalysis,industrydecision-makingaimedatreal-lifeprojects,andpublic-privatedialoguesforthecontinueddevelopmentofadecarbonization-promotingpolicylandscape.Thechemicalindustryhasavitalroleinthetransitiontowardsaglobalnet-zerosociety.TowardsaNet-ZeroChemicalIndustry4Introduction1Innovativesolutionsarebeingimplementedbythechemicalindustryanditsvaluechainstotacklethenet-zerochallenge.Toreduceglobalanthropogenicemissionsofgreenhousegases(GHGs),amountingtoalmost50Gtcarbondioxideequivalents(CO2eq)in2018,2countriesarecommittingtomovingtowardsnetzeroby2050.3Additionally,balancingemissionsfromCO2sourcesandremovingCO2throughcarbonsinks,describedintheParisAgreement,isacornerstoneoflimitingglobalwarmingandachievingtheagreement’slong-termtemperaturegoals.4Thechemicalindustryplaysanimportantdoubleroleinthisendeavour.Havingreliedextensivelyonfossilresourcesoverthepastcentury,forbothfuelandfeedstock,thisindustrycurrentlycontributes5–6%ofglobalGHGemissions(Scope1and2emissions).5Simultaneously,thechemicalindustrysuppliesmaterialsandsolutionsusedinvariousapplicationssuchasautomotive,healthcare,agriculture,electronicsandfast-movingconsumergoods–providingessentialproductsfortechnologiesthathelpreduceanthropogenicGHGemissions.6Whileitisclearthatthechemicalindustrymustcontributetowardsreachingnetzero,ithasbecomeapparentthatoptimizingexistingprocesseswillbeinsufficientonitsown.Theindustryisfacingadrasticmaterialdemandincreaseby2050,andinnovativesolutionswillbeessentialtotacklethenet-zerochallenge.Variousdecarbonizationsolutionsforthechemicalindustryandassociatedvaluechainsarebeingexplored.Thisstudyfocusesonasubset,asdefinedbythescopeoftheLow-CarbonEmittingTechnologiesInitiativebelow.Consideringthebrevityofthiswork,thepresentedoutcomesconstituteonlyaselectionoffindings.Thechemicalindustryinthecontextofnetzero1.1TowardsaNet-ZeroChemicalIndustry5TheLow-CarbonEmittingTechnologiesInitiativeaimstoacceleratethechemicalindustry’sjourneytowardsnetzeroby2050.Thechiefexecutiveofficer-ledinitiativeofmajorchemicalcompaniescentreson:a)collaborationwithinandbeyondtheindustrytoultimatelyincreasethematurityofchosenLCETs;andb)explorationofopportunitiestoimplementreal-lifeprojectsinaccordancewithfivefocusareas:7–Biomassutilization:Fossilfuelsandfeedstockscanbesubstitutedwith,ideally,sustainablyproducedbiomassfromagriculturalandforestrywasteandby-products.Incombinationwithcarboncapture,acarbonsinkcouldevolve.–Carboncaptureandutilization(CCU):CCUcanbeavaluablesolutiontoreduceemissionsbycomplementingotherLCETsviacapturingCO2streamsfromindustrialprocessesandusingthecarbonasrawmaterialinvaluableproductsorasanenergy/hydrogencarrier.Whilethisinitiativefocusesonutilization,itisacknowledgedthatcarboncaptureandstorage(CCS)canbeavaluabletransitiontechnology.–Electrification:Assuminglow-carbonelectricitygeneration,8thesubstitutionoffossilfuelwithelectricallyheatedchemicalprocessescancontributesignificantlytoreducingemissions.Whileseveralfactorsplayarole,electrificationofprocessesiscloselylinkedtotheavailabilityandaffordabilityoflow-carbonelectricity.–Alternativehydrogenproduction:Hydrogenhasthepotentialtosubstitutefossilfuelsforvariousapplicationsandconsequentlyreduceemissions,assumingthatitisproducedinalow-carbonemittingfashion,e.g.blueorgreenhydrogen.Theformercombinesconventionalproductionwithcarboncaptureandthelatterusesrenewableelectricity-drivenelectrolysis.Inthelongterm,greenhydrogenisthepreferredsolution.–Wasteprocessing:Wasteprocessingorrecyclingofplasticwasteshouldreducetherequiredamountoffossilfeedstocktoproduceplasticsaswellasavoidingemissions-intensiveend-of-lifeproductincineration.Thechemicalindustrystronglyreliesoncapital-intensiveandlong-livedassetsandrequiressignificantinvestmenttochangeitsbusinessmodelsandoperations.9Anystructuralchangestobeinplaceby2050requireactionsoon–preferablynow.Thedevelopment,deploymentandupscalingofLCETsdependlargelyonanenablingpoliticalandregulatoryenvironment;however,differentcountrieshavedifferentambitionsandevenwithinonecountrydisparitiescanloomlarge.10Thispaperattemptstoprovideinsights,guidanceandsupportforstrategicdecision-makingandfuturepolicy-makinginthiscomplexenvironmentwithoutsuggestingaparticularstance.TheLow-CarbonEmittingTechnologiesInitiativeasacatalysttowardsnetzeroTheimportanceofpublicpolicyfortheimplementationofLCETs1.21.3TowardsaNet-ZeroChemicalIndustry6Methodology2Sevenjurisdictionsandsixpolicyclusterswereidentifiedaskeytothisanalysis.SelectionofjurisdictionsBasedonthefollowingsetofcriteria,sevenjurisdictionswereselectedtobecoveredintheanalysis:–Economicsignificance(largeeconomywithsignificantchemicalindustry)–Proximitytofeedstockand/oravailabilityofrequiredinfrastructure–Currentavailabilityorfuturedevelopmentofrenewableenergy/hydrogeninfrastructure/otherenablersforLCETprojects–ProgressivedecarbonizationeffortsandtargetsInaddition,thenumberofjurisdictionswasconstrainedtoamaximumof10inordertofocusthescopeoftheanalysis.Thisresultedintheselectionofthefollowingjurisdictions:China,theEuropeanUnion,Japan,SaudiArabia,theUnitedArabEmirates,theUnitedKingdomandtheUnitedStates.DataacquisitionDatawasacquiredthroughexpertinterviewsanddeskresearch.Twenty-fourinterviewswereconductedwithindustryexperts,policy-makers,NGOrepresentatives,academicsandlegalpractitioners.AdditionalinformationwascollectedfrompublicsourcesandAccentureinternalresearch.PolicymodelTheacquireddatawasquantifiedbyamodelbasedonanassessmentmatrix(structuredquestionnaire)withasetofmorethan80questionsacrossallpolicyclusters(seebelow).Toeachquestion,fourpossibleanswerswereassigned,linkedwithanumericalvaluerepresentingthedegreeofpolicysupportforeitheroneormoreLCETs.Belowthepolicyclusters,morespecificpolicyareaswereidentified,andevenmorespecificpolicyissues.Calculatingthescoringwasconductedfromthebottomup,frompolicyissuestopolicyareas,policyclustersandLCETareas,withweightingfactorsadjustingforthevaryingimpactofitemswithinthesecategorieswithregardtothedeploymentofLCETs.SixkeypolicyclustersaffectthedeploymentofLCETsEnablingthetransitionrequiresacomplexsetofpoliciesfacilitatingchangeacrossthevaluechainandinvariousstakeholderbehavioursanddecisions.SixpolicyclustershavebeenidentifiedthatcansignificantlyaffectthedevelopmentandupscalingofLCETs.1.IncentivesandTargets:Settingclimatetargetsandtherightincentivesaremajordriverstowardsanet-zerochemicalindustry.Thisanalysisconsidersenergy-andGHG-specificregulations,voluntarycarbonmarkets,fossilfuelpricing,thevolumeoflawsuitsforincreasedclimateaction,andcarbon-pricingmechanisms.Inaddition,takingamacroview,thecreationofalevelplayingfieldandavoidanceofcarbonleakage(theprocessofcompaniesrelocatingoperationsintojurisdictionswithlessstringentcarbonpricing,whileincentivizinginvestments)isamajorchallenge.2.TechnologiesandInfrastructure:Keyenablersforthedevelopment,upscalinganddeploymentofLCETsaretechnology-andinfrastructure-related,whichiscapturedinthisworkbyanalysing:a)regulatoryactionsthatinhibitthemovetowardslow-carbonalternativessuchasalackofclearlydefinedcriteriaforclassificationofbiomassassustainable;andb)theavailabilityofrequiredphysicalinfrastructuresuchaspipelines,powertransmissionnetworksandrenewableenergysupplies.3.SupportingandEnabling:TransformingthechemicalindustryfromusingconventionaltechnologiestoLCETsrequiressignificantinvestmentintheformofcapitalexpenditure(capex).Additionally,operatingLCETswilloftencomeatahighercost–operatingexpenditure(opex)–aswell,temporarilyleadingtolesscompetitiveproductsandthusdecreasingTowardsaNet-ZeroChemicalIndustry7theattractivenessoftheprojectintheeyesofpotentialinvestors.Policy-makerscanactivelyaffectinvestmentattractiveness.Thissupporttypeiscapturedinthisworkbyanalysing:a)directsupportforLCETprojects(capeximpact);b)indirectsupportviataxincentivesforlow-carbonproduction(bottom-lineimpact);andc)sustainablefinancingguidelinesandGHGemissions-relatedreportingstandardsandregulations.4.MarketsandDemand:Sincelow-carbonproductswilltemporarilyhavehigheropexincomparisontotheirconventionalcounterparts,creatingandgrowingmarketsforgreenproductsisvitalforsustainableLCETdeployment.Thisresearchconsidered,amongothers,privateprocurementactionssuchasamarketpullfornon-fossilplastics,publicprocurementactionssuchasgovernmentalcarfleetsrequiringlargesharesofnon-fossilmaterials,andlegislationensuringcompaniesuseminimumsharesofgreenmaterialsintheirproductportfolio.5.CollaborationandInnovation:ThetechnicalandfinancialchallengesthatneedtobeovercometodeployLCETsrequireinnovation-supportingpoliciesandstrongcollaborationamongindustryplayersandthepublicandprivatesectors.Here,theexistenceofpublic-privateplatforms,IPprotectionandcompetition-lawaspectsareanalysed.6.CaveatsandInhibitors:PotentialroadblocksforLCETdeployment,beyondmissingpolicyenablers,mustalsobeconsidered.Hence,thisworkassesses,forexample,theriskofcourtcasesposingathreattoLCETdeployment,andpublicopinionaswellasprotestmovementsthatmightconstituteahindrancetoLCETandrelatedprojects,suchasCO2pipelinesornewwindparks.TowardsaNet-ZeroChemicalIndustry8Tofacilitatestrategicdecision-making,theLCET-deploymentmatrixwasdeveloped.Itsupportsinitialthinkingbyputtingthelevelofpolicysupportandtheburdenofstrandedassetsinrelationtooneanother.Thelevelofpolicysupportiscategorizedasloworhigh,dependingontheoutcomeofthisanalysis.Policysupportwillbeconsideredlowforascorebelow60outof100andhighifthescoreisequaltoorabove60outof100.11Thepolicymodelandtheresultsdiscussedinthispaperaddressthisdimensiononly.Theotheraxisofthematrixconsidersthenetpresentvalueofacertainasset(facility).Assetswilllosevalueincaseofoperationsrelocationandpotentiallyrequireassetadjustmentsviacapex.Theburdenofstrandedassetsiscategorizedasloworhigh,withnetpresentvalue(NPV)beingpositiveandnegative,respectively.Putsimply,theNPVofanassetwillbenegativeifthesumofthediscountedcashflowsisbelow0.–Outofnecessity,thisworkrepresentsonlyasnapshotofthepolicyenvironmentatagivenpointintime.Whilethepolicylandscapeisdynamic,itwasnotpossibletofactorinchangesthatoccurredafter31January2022.–Unlessclearlynotedotherwise,whenspeakingofthepositionortrendofaparticularLCETarea,thisrefersonlytoitspolicysupport.–BesidestheobjectiveandquantifiedscoringofpolicysupportforLCETs,thedifferentlycharacterizedpoliticalspheresoftheanalysedjurisdictionsplayimportantroles–e.g.thetopic’ssustainabilityvs.(energy)security,anddifferentlegaltraditionsandavailablepolicytools.–Theinvestigationofcausalrelationshipsbetweenconcretepolicymeasuresandanuptakeinreal-lifedeploymentofLCETswasoutsidethescopeofthisstudy.Furtherresearchinthisareacouldimprovetheunderstandingandsharingofbestpracticeswithinandamongjurisdictions.TheLCET-deploymentmatrix:ahigh-leveltoolfordecision-makersDisclaimerLCET-deploymentmatrixprovidesinitialorientationonwheretodevelopandwhatkindoflow-carbonprojectFIGURE1LowLowHighHighCollaborateinjointventures,e.g.tomitigatesuboptimalpolicyenvironmentPostponenewprojectandusecurrentassetsuntilendoftheirlifetimeEngagewithpolicy-makerstodiscussenablingpolicymeasuresEngagewithpolicy-makerstodiscussenablingpolicymeasuresPolicysupportBurdenofstrandedassetsCollaborate:Engagewithpolicy-makersPostpone:Engagewithpolicy-makersConductin-depthpolicyandmarketanalysisInvestigatebusinesscaseCreatefinancingstructuretailoredtolow-carbonprojectsDeployatscalenowMakeuseoffavourablepoliciesasafirstmoverScaleuptoreplacecurrentassetslaterUselearningsinfurthernavigatingandshapingthepolicylandscapeConductpilotprojectnowandlearnTowardsaNet-ZeroChemicalIndustry9LCETpolicyanalysisbyjurisdiction3ThemainpolicyfeaturessupportingkeyLCETsinthesevenjurisdictionsselectedforthispaperaredetailedbelow.TowardsaNet-ZeroChemicalIndustry1060HighpolicysupportChinaStatusquoGoalssetGHGemissionsperyear[MtCO2eq]PolicyclustersIncentivesandTargetsTechnologiesandInfrastructureSupportingandEnablingMarketsandDemandCollaborationandInnovationCaveatsandInhibitorsLCETsAverageBiomassCCUElectrificationHydrogenWasteprocessingLCETslistedinalphabeticalorderCarbonpeakbefore203012,355%ofglobalemissions26.9GHGemissions/GDPreal[MtCO2eq/bn$]0.93Population[M]1,428GDPreal/capita[k$]9.4Chemicalindustry’srevenue[bn$]1,801Netzeroby2060Solarandwindcapacityofatleast1,200GWby2030Reductionincarbonintensityof65%by2030comparedto2005levels10001020304050708090Wasteprocessing45Electrification48CCU49Hydrogen55Biomass46LCETpolicysupportPolicyprioritiesperLCET34495928481132464258313600344952244919344842582449365567315619334542483149676719TowardsaNet-ZeroChemicalIndustry11Referenceyear2018forallmeasuresSources:GHGemissions:WorldBank,“TotalGreenhouseGasEmissions(ktofCO2equivalent)”:https://data.worldbank.org/indicator/EN.ATM.GHGT.KT.CE;Other:OxfordEconomics;GDPrealbasedon2015pricesBiomassBiomassutilizationreceivesbelow-averagescoringsformostpolicyclusters,despiteitslargepotentialinChina.TheCircularEconomyPromotionLawencouragestheuseofwastebiomassfortheuseofbiogasandbiomassenergies.14However,dedicatedpoliciesaligningtheuseofbiomasswithfarmlandandimplementingmonetarysupportmechanismsstillrequireelaboration.46CCUCCUranksasthesecondmostprioritizedLCETinChina,scoringhighinTechnologiesandInfrastructureandSupportingandEnabling.Giventhehighdependencyoncoal-basedelectricitygeneration,carboncapturehasgreatpotential;however,largeinvestmentsinresearchanddevelopment(R&D)anddedicatedfundingmechanismsforcompanieswillberequired.49WasteprocessingPromotingthecirculareconomytoreduceemissionsisoneofthekeytasksforChina’sactionplantowardspeakemissions.Chinaaimsto“pushindustrialparkstodevelopinacircularmanner”and“refinesystemsforresourcerecycling”.16WhilereusingandrecyclingproductsisalsooneofthecentralissuesinChina’sCircularEconomyPromotionLaw,wasteprocessingisyettoreceivemoreattentionandpolicysupportfromthegovernment.45HydrogenBesideshavingstrongsupportinTechnologiesandInfrastructure(carbonpeakactionplan)15andfundingopportunities,alternativehydrogenproductionisemphasizedbymultipleindustriesandbenefitsfromabove-averageCollaborationandInnovationsupport.Additionally,Chinaisdependentonexpensivenaturalgasimportstoproducehydrogenusingconventionalmethods.55ElectrificationElectrificationplaysamajorroleinChina’sLCETspace,withtwonoticeabledevelopments:a)therenewablescapacityisincreasingatahighrate,whilenuclearwillbeapartoftheenergymixandissupportedbytheintroductionofthenationalemissionstradingsystem(ETS)in2021,whichcurrentlyappliestothepowersectoronly;andb)tightregulationonenergyconsumptiontobalancesupplyandever-increasingdemand.Twopoliciesareimportant:double-control,whichregulatesexistingoperations’energyintensityandconsumption;anddouble-high,whichregulatesnewprojects’energyintensityandGHGemissions.Additionally,theEnergyConservationLawpromotesenergysavingforchemicalandotherindustries.48SinceChina’sGDPandwithititsappetiteforgoodswillkeepgrowing,becomingcarbonneutralisaparticularchallengeforthismajoreconomy.12Amoreambitiousupdatednationallydeterminedcontribution(NDC)wassubmittedinlate2021outliningthecountry’spathtowardsitsmainclimatetargets(seeabove).Notably,duringCOP26,theEUandChinaalignedoncommongroundregardingthedefinitionofgreeninvestments13–atypeofclassificationthathasbecomeknownas(sustainableorgreen)taxonomy./100/100/100/100/100Progresstodate–Commitmenttocarbonpeakbefore2030andthelaunchofanactionplansystemforvarioussectors(1+Nactionplansystem)promoteupscalingofallLCETs–Hydrogenandcarboncapture,utilizationandstorage(CCUS)arelikelytoleadpost-2025,giventheirpotentialtodeliverloweremissionsinthefaceofconcernsaboutenergysecurity–IntroductionofnationalETSforthepowersectorasanimportantsteptowardsloweringemissions,supportingelectrificationinthelongrunChangestomorrow–ClarityregardingthedevelopmentofChina’scarbonmarket(extensionofETSandrelaunchofCCER)couldsupportthemovetowardsLCETs–Public-privatedialoguesregardingLCETfundingmodelsandgreenfinanceopportunitiescouldfacilitateincreasedaccesstocapitalforgreenprojects–Concretelegislationimplementinghigh-levelactionplans(1+N)coulddeliverplanningcertaintyforindustryTowardsaNet-ZeroChemicalIndustry1260HighpolicysupportEuropeanUnionGoalssetGHGemissionsperyear[MtCO2eq]PolicyclustersLCETsAverageBiomassCCUElectrificationHydrogenWasteprocessingLCETslistedinalphabeticalorderAtleast40GWelectrolyzercapacityby20303,115%ofglobalemissions6.8GHGemissions/GDPreal[MtCO2eq/bn$]0.21Population[M]447GDPreal/capita[k$]32.5706Netzeroby205038–40%renewableenergyoffinalenergyconsumptionby2030-55%GHGemissionsby2030comparedto1990levels10001020304050708090Wasteprocessing60CCU70ElectrificationHydrogen70Biomass6156423756524233335858584258423358484248653358427575696780858085747376677378806261StatusquoIncentivesandTargetsTechnologiesandInfrastructureSupportingandEnablingMarketsandDemandCollaborationandInnovationCaveatsandInhibitorsLCETpolicysupportChemicalindustry’srevenue[bn$]65707060TowardsaNet-ZeroChemicalIndustry13Referenceyear2018forallmeasuresSources:GHGemissions:WorldBank,“TotalGreenhouseGasEmissions(ktofCO2equivalent)”:https://data.worldbank.org/indicator/EN.ATM.GHGT.KT.CE;Other:OxfordEconomics;GDPrealbasedon2015pricesWiththeEuropeanGreenDeal,theEUlaidoutacomprehensiveclimateactionplan.ItaimstoreduceGHGemissionstonetzeroby2050whileensuringeconomicgrowthdecoupledfromresourceuse,andasociallyacceptabletransition,leaving“nopersonandnoplace”behind.17InJuly2021,theCommissionpresentedaproposalpackagetowardsimplementationoftheEuropeanGreenDeal,theso-calledFitfor55package,18whichiscurrentlybeingnegotiatedamonglegislativeactorsandotherstakeholders.ElectrificationAssome75%oftotalanthropogenicGHGemissionsintheEUstemfromenergyuse,22movingtowardsrenewableenergycanbeseenasthenumberonepriority,supportedbytheambitiousrevisionofREDII.ReceivinggoodscoresforIncentivesandTargetsaswellasTechnologiesandInfrastructure,electrificationwillleadthewaypre-2030.Thequickupscalingofrenewablecapacityandtransmissioninfrastructureremainschallenging,notleastduetosomepublicresistancetolargeinfrastructureprojects.CCULookingforward,incentivestodeployCCUprojectsmightbestrengthenedbytherevisionofboththeEUETSdirectivesandREDII,aswellasinitiativesproposedintheEuropeanCommission’scommunicationonsustainablecarboncycles.20Previously,CCShasbeentreatedfavourablybytheETS.ThenewproposedrevisionintendstorecognizeCO2boundpermanentlybyCCUasnegativeemissions,boostingthistechnology.TheETSInnovationFundandtheConnectingEuropeFacility(CEF)aremajorfundinginstruments.Theemergingscale-upofthesetechnologiesmightalsobesupportedbyfuturerequirementstouseacertainshareofnon-fossilfeedstockintheproductionofchemicals,asproposedinarecentEuropeanCommissioncommunication.21/10065/100WasteprocessingPlasticwasteprocessing,inparticularchemicalrecycling,stillfacessignificantuncertaintyatapolicylevel;however,itisexpectedtoplayalargerrolepost-2030.Manyrequiredpoliciesarenotyetinplaceorlaidoutatamemberstatelevel.AttheEUlevel,themajorlegislativeactistheWasteFrameworkDirective,26whichissupportedbythecirculareconomyactionplan.27Despiteacleartrendtowardsrecycling,dedicatedfundingopportunitiesareyettobeimprovedandpoliciesformechanicalandchemicalrecyclingarestilltobefullydeveloped.60/100HydrogenTheuseofhydrogenasrenewablefuelcurrentlyhasmomentumasaresultoftherevisedREDIIandtheEUHydrogenStrategy,whichaimsatelectrolysercapacitiesof10Mtperyearby2030.23TheEnergySystemIntegrationStrategy,togetherwiththeHydrogenStrategy,isoneoftheEU’shigh-levelinitiativesaddressingenergyinfrastructureimprovement.TheEUhydrogennetworkaimstoconnectcost-effectivehydrogenproductionwithoff-takers.24Creatingamarketforhydrogenisaprioritydrivenbythenewframeworktodecarbonizegasmarkets,togetherwiththeEU’sHydrogenStrategy.25BiomassEUclimateregulationsandpoliciessupportbiomassutilization.TheproposedrevisionofthesecondRenewableEnergyDirective(REDII)19raisesthe2030targetsforrenewableenergyandencouragestheuseofbioenergyandsustainablebiofuels.Therevisionswouldalsomandatememberstatestosetupsupportschemesinaccordancewiththebiomasshierarchy.Yettheyalsopushforamoresustainableuseofbiomass,prohibitingtheuseofallbiomassfrom“primaryandhighlybiodiverseforests”.Thismightleadtosupplyshortagesonceindustrydemandforbiomassfeedstockincreases–thisisexpectedpost-2030.Furthermore,biomassutilizationfacesnoticeablepublicopposition.61Progresstodate–Electrificationandhydrogenleadingthewayduetostrongtargets(REDII)andstrategies(HydrogenStrategy),alignedindustryagendaandpublicacceptance–CoherentprogrammeofclimateactionlegislationwouldsupportallLCETareas(Fitfor55proposals)–WiderangeoffundingopportunitiesatEUandmemberstatelevelforLCETstoenabledemonstrationprojectsChangestomorrow–Taxonomyregulationwouldbenefitfromadjustmenttowardscapturingchemicalindustry’scomplexity–Demandforgreen/circularproductscouldbestrengthenedforLCETs,e.g.bydefininggreenlabels/settinggreen(public)procurementtargets–Fundinglandscapecouldbeenrichedbyopexsupportmechanisms,e.g.carboncontractsfordifference(CCfDs)TowardsaNet-ZeroChemicalIndustry1460HighpolicysupportJapanGoalssetGHGemissionsperyear[MtCO2eq]PolicyclustersLCETsAverageBiomassCCUElectrificationHydrogenWasteprocessingLCETslistedinalphabeticalorderGHGemissionsreductionby46%by2030(from2013levels)1,187%ofglobalemissions2.6GHGemissions/GDPreal[MtCO2eq/bn$]0.26Population[M]127GDPreal/capita[k$]36.026736–38%renewablesinelectricitymixby2030Netzeroby205010001020308090Wasteprocessing58ElectrificationCCU65Hydrogen69Biomass59PolicyprioritiesperLCET48381559523950192819058392858351950486319705040StatusquoIncentivesandTargetsTechnologiesandInfrastructureSupportingandEnablingMarketsandDemandCollaborationandInnovationCaveatsandInhibitorsLCETpolicysupportChemicalindustry’srevenue[bn$]656772657272696367626772787665676558696376Referenceyear2018forallmeasuresSources:GHGemissions:WorldBank,“TotalGreenhouseGasEmissions(ktofCO2equivalent)”:https://data.worldbank.org/indicator/EN.ATM.GHGT.KT.CE;Other:OxfordEconomics;GDPrealbasedon2015pricesTowardsaNet-ZeroChemicalIndustry15Progresstodate–HighlevelofambitioninNDCandGreenGrowthStrategywithafocuson14growthsectorssupporttransitiontowardsloweremissions–Hydrogenisclearlyleadingthewayduetoadedicatedhydrogenstrategyandthegovernment’scommitmenttowardsahydrogen-basedsociety–TheMinistryofEconomy,TradeandIndustry(METI)announcedplanstostartademonstrativecarboncreditmarketinthefiscalyear2022/2023,34whichcouldrealizeadditionalincentivesforLCETsChangestomorrow–Implementingaclearercarbonpricesignal(beyondaclimatechangemitigationtax)couldfurtherincentivizeinvestmentinLCETs–GiventhechallengesJapanfacesasanislandstate,findingabespokesolutionintermsofareliablelow-carbonenergysupplywillbevital–Benefitingfromfavourablepolicyenvironments,facilitatingandengagingindialoguesregardingopexsupportforLCETsmightstrengthenJapan’spositionBiomassBiomassutilizationinJapanbenefitsfromtheoverallhighlevelofambitionreflectedinitsIncentivesandTargets.Bioenergycontributesabout2.5%tothetotalenergysupply.30TheGreenGrowthStrategystressestheuseofbiomassasfuturefeedstockforplastics.OnechallengeforJapanesebiomassisitslimiteddomesticsupply,leadingtoahighlevelofimports.59CCUCarboncapture,utilizationandstorage(alsoknownascarbonrecyclinginJapan)isakeytechnologyinthecountry’sjourneytonetzero.ItplacesconsiderableemphasisonthedevelopmentofCCU/CCStechnology,targetingfurthercostreductionsby2030andaleadingroleinthegrowingcarboncapturemarketby2050.3165WasteprocessingPlasticwasteprocessingisalreadyafocusareaforJapan’schemicalindustryinthefeedstocktransition–aheadofbiomassutilization.Adecadefromnow,theshareofrecycledfeedstockcouldbe10–20%.WasteprocessingscoresparticularlywellinCollaborationandInnovation.In2021,amajorJapanesechemicalcompanyannouncedtheconstructionofachemicalrecyclingplantwithacapacityof20,000tofplasticwasteperyear.33Thegovernmentinvestsinsupportinginfrastructure,whileincentivesandfundingopportunitiesshowroomforimprovement.63HydrogenTheBasicHydrogenStrategyaimstopositionJapanasaleaderinthisspace,aspiringtobeahydrogen-basedsociety.GiventhatproducinggreenhydrogenwithinJapanandimportingitarebothstilltooexpensive,thecurrentfocusliesonimportingbluehydrogenfromAustraliaandtheMiddleEast,especiallySaudiArabia.Japanisalsoexperimentingwithlarge-scalepowergenerationusinghydrogenasanenergyvector.CurrentpoliciesalreadyboostJapan’shydrogenscoring–particularlyinTechnologiesandInfrastructureandCollaborationandInnovation.Yetfullimplementationofthehydrogenstrategyinlegislationandconcretemeasureswilllikelytakeuntil2030.69ElectrificationJapantargetsanambitiousfutureelectricitymixof36–38%ofrenewablesby2030.Together,nuclearandthermalelectricitygeneration(fossil-based)combinedwithCCUSmightincreaseto30–40%by2050.Currently,acarbontaxofabout$3/tCO2(climatechangemitigationtax)32andafossilfueltaxincentivizedecarbonization.Still,Japanexperienceselectrificationofprocessesasadifficultchallenge,givenitshighelectricitypricesduetolimiteddomesticresources.58Anislandstatewithfewnaturalresourcesbutwithextensiveindustry,Japanfacesvariouschallengesinreducingemissions.Itsnet-zerogoal,announcedin2020,andanambitiousNDC,updatedin2021,istobereachedthroughasetofinitiatives:theGreenGrowthStrategy,28aimingatcombiningemissionsreductionwithgrowthin14sectors,theBasicHydrogenStrategy,andthesixthStrategicEnergyPlan29willbecentraltoJapan’stransition./100/100/100/100/100TowardsaNet-ZeroChemicalIndustry16SaudiArabiaGoalssetGHGemissionsperyear[MtCO2eq]PolicyclustersLCETsAverageBiomassCCUElectrificationHydrogenWasteprocessingLCETslistedinalphabeticalorderNetzeroby2060(dependentoneconomy)638%ofglobalemissions1.4GHGemissions/GDPreal[MtCO2eq/bn$]0.94Population[M]33GDPreal/capita[k$]20.375GHGemissionsreductionof278MtCO2eq/aby2030comparedto201950%renewablesinelectricitymixby2030(58.7GWofinstalledcapacity)10001020308090Biomass29Electrification44CCU52Hydrogen53Wasteprocessing35PolicyprioritiesperLCET60234822321924292730141719524319194448286827255328431920355214303019705150403028HighpolicysupportStatusquoIncentivesandTargetsTechnologiesandInfrastructureSupportingandEnablingMarketsandDemandCollaborationandInnovationCaveatsandInhibitorsLCETpolicysupportChemicalindustry’srevenue[bn$]63856785672167Referenceyear2018forallmeasuresSources:GHGemissions:WorldBank,“TotalGreenhouseGasEmissions(ktofCO2equivalent)”:https://data.worldbank.org/indicator/EN.ATM.GHGT.KT.CE;Other:OxfordEconomics;GDPrealbasedon2015pricesTowardsaNet-ZeroChemicalIndustry17Progresstodate–Takingtheleadinalternativehydrogenproductionisapriority–withlarge-scalegreenhydrogenplantsaslighthouseprojects–ExistinginfrastructurecombinedwithacommitmenttodrasticallyreduceemissionswithinthecountryboostsCCUSdeploymentinindustrialhubs–VisiontomassivelyincreasecapacityofrenewableswillsupportelectrificationinthelongrunChangestomorrow–Giventheexistingindustrialhubs,policiesspecificallysupportingwasteprocessingcouldencouragecooperationbetweenindustrialconsortiums–Demand-sidepoliciesforbothpublicandprivateactorscouldfacilitatethetransitiontoavibrantsociety,asenvisagedinVision2030–Implementationofdedicatedmonetarysupportmechanismscouldfacilitatemoreprivateinvestment,especiallybyforeigncompaniesBiomassBiomassutilizationreceiveslittle-to-nospecificpolicysupportwhile,onthepracticalside,littleactivityregardingbio-energyapplicationsisnoticeable.Verylimitedbiomasspotential37forthecountryoverallcreatesadifferentfocus.29CCUCCUSisoneoftheleadingLCETareasinSaudiArabia.Withcarboncapturebeingapriority,infrastructuredevelopmentsarebeingpushedinthecitiesofJubailandYanbu,whicharetobecomeCCUShubs.PlanstoestablishaninvestmentfundtoenhancedeploymentofCCU/CCSwereannouncedinautumn2021.38Besidesitsuseintheproductionofbluehydrogen,carboncaptureisusedforenhancedoilrecovery(EOR)andcapturedcarbonisusedasfeedstock,withoneofthelargestCCUplantsbeinglocatedinSaudiArabia.3952HydrogenSaudiArabiaaimstomarketitselfasafrontrunnerinthehydrogenspace–bothblueandgreen–andisveryactivelypromotingthedeploymentoflarge-scaleplants.ThemostprominentoftheseistheHeliosproject,41partoftheNEOMgiga-project,42whichwillbepoweredby4GWofrenewableenergyfromsolarandwind.Itsproductioncapacityshouldreach650tofhydrogenperdayand1.2Mtofgreenammoniaperyear.Inthefuture,greenhydrogenwillplayalargeroleinwesternpartsofthecountry,oncetheshareofrenewablesissufficient.However,SaudiArabiaiscurrentlyscalingupbluehydrogenproductionineasternpartsofthecountrybyfocusingonCCUandCCSincombinationwithconventionalhydrogenproductionprocesses.Notably,amemorandumofunderstandingoutlinesthesettingupofaSaudi-Germaninnovationfundforthepromotionofcleanhydrogen.4353Forthepasthalf-century,theKingdomofSaudiArabiahasbeenverymuchdependentonfossilfuels.Vision2030,launchedin2016,isthegrandstrategytonotonlydiversifytheeconomybutalsoprivatizeit,increaseforeigninvestmentsandtransformsociety.35Outliningitsclimatetargets,SaudiArabiasubmittedanupdatedNDCin2021.WhileboththeNDCandVision2030relyonrevenuesfromthecontinuedexportoffossilfuels,theclimatetargetsareindeedambitiouscomparedtothecountry’seconomictraditionsandenvironmentalcircumstances.36WasteprocessingPlasticwasteprocessingisbecomingmoreimportantinSaudiArabia,withanewWasteManagementLawhavingbeenenactedin202144andthelaunchoftheCircularCarbonEconomyNationalProgram.45Yetitisstillinitsearlystagesand,withconcretepolicysupporttowardsrecyclingstilltobedeveloped,itisnotapriorityLCETatthistime.35ElectrificationHighambitionsandheavyrelianceonfossilfuelsmakeaninterestingfuturefortheelectrificationofprocessesinSaudiArabia.TheNationalRenewableEnergyProgram(partofVision2030)aimstoboosttheshareofrenewablesintheelectricitymixto50%by2030,whichwillcomeinlargepartfromsolarphotovoltaic(sPV)(two-thirds),wind(one-third)andconcentratedsolarpower.4044/100/100/100/100/100TowardsaNet-ZeroChemicalIndustry1860HighpolicysupportUnitedArabEmiratesGoalssetGHGemissionsperyear[MtCO2eq]PolicyclustersLCETsAverageBiomassCCUElectrificationHydrogenWasteprocessingLCETslistedinalphabeticalorder44%cleanenergyinenergymixby2050263%ofglobalemissions0.6GHGemissions/GDPreal[MtCO2eq/bn$]0.69Population[M]9.6GDPreal/capita[k$]39.614Netzeroby2050Emissionreductionof23.5%by2030(comparedtoBAU-scenario)1000102030708090Biomass28Electrification41CCU45Hydrogen51Wasteprocessing29PolicyprioritiesperLCET363926273736289222403545284319193841582837405133355619342918152224334050331919StatusquoIncentivesandTargetsTechnologiesandInfrastructureSupportingandEnablingMarketsandDemandCollaborationandInnovationCaveatsandInhibitorsLCETpolicysupportChemicalindustry’srevenue[bn$]674258191915Referenceyear2018forallmeasuresSources:GHGemissions:WorldBank,“TotalGreenhouseGasEmissions(ktofCO2equivalent)”:https://data.worldbank.org/indicator/EN.ATM.GHGT.KT.CE;Other:OxfordEconomics;GDPrealbasedon2015pricesTowardsaNet-ZeroChemicalIndustry19BiomassBiomassutilizationplaysaminorroleintheUAEintermsofbothbioenergyandbiomassasfeedstockalternative.Limitedavailabilityofbiomassintheregioncorrespondstoasmallamountofactivitywithinthepolicyspace.28CCUBesideshydrogen,carboncapturetechnologiesareamongthefocusLCETsintheUAE.CCUSbenefitsfromabove-averagescoringinTechnologiesandInfrastructureandCollaborationandInnovation–thankstopoliticalandindustryinterestinthatfield.TheUAEplanstoexpanditscarboncapturecapacity,buildingontheexperiencewiththeAlReyadahprojectcapturingCO2forEOR.4645WasteprocessingNotapriorityLCETsolutionfortheUAEyet,wasteprocessingwilllikelybemoreimportantthanbiomassinthefeedstocktransitioninthedecadestocome.Todate,theUAErecognizestheneedtomovetowardsacirculareconomy,havingestablishedafederalpublic-privatepartnership–theCircleCoalition(CoalitionofInnovationinRecyclingtowardsaClosedLoopEconomy)–in2019.5029HydrogenHydrogen,bothblueandgreen,isclearlythefocusLCETwithintheUAE.Whilemanystrategiesareyettobefollowedbymoreconcretepoliciesandfundingopportunities,theUAEmarketsitselfasahubforhydrogen.Pushingforwardwithgreenammonia,theUAEwillbuilda$1billiongreenammoniafacilityintheKhalifaIndustrialZoneAbuDhabi(KIZAD),whichistobepoweredbyan800MWsolarplant.4951ElectrificationTheUAEEnergyStrategy2050targetsanenergymixthatincludes44%cleanenergy,38%gas,12%cleancoaland6%nuclear.47Securingitsenergysupplyanddiversifyingenergysources,theUAEannouncedinvestmentofAED600billion(~$160billion),butdetailedpoliciesareyettobeimplemented.Renewableenergyprojectsareusuallybasedonpowerpurchaseagreements.AspartoftheDubaiCleanEnergyStrategy,theUAEisaimingtosetupalargesolarparkwithacapacityof5GWby2030.4841TheUnitedArabEmirates(UAE),aheavyuserandproduceroffossilfuels,hasbeentryingtoshiftitseconomicfocustootherindustriesandpushfordeploymentofcertainLCETs.Hitherto,nolegallybindingclimateregulationsatthefederallevelexist,exceptforinternationaltreaties./100/100/100/100/100Progresstodate–ProductionofblueandgreenhydrogenisleadingintheUAEduetoexperiencewithcarboncaptureandthescaling-upofrenewables–Competitionbetweenemiratesislikelytospeedupimplementationofconcretepoliciesandfundingopportunities–ThemunicipalityofRasAlKhaimahhaslaunchedagreenpublicprocurementprogrammerecently–pavinganewpathwithintheUAEChangestomorrow–BalancingcompetitionbetweenemiratesandharmonizingbindingclimateregulationonafederallevelcouldfacilitateLCETtransition–Introducingacarbonpricesignalcouldsupporteffortstomovetowardsmoresustainableinvestments–Demand-sidepoliciesanddedicatedfundingopportunitiesatafederallevelcouldboostLCETdeploymentTowardsaNet-ZeroChemicalIndustry2060HighpolicysupportUnitedKingdomGoalssetGHGemissionsperyear[MtCO2eq]PolicyclustersLCETsAverageBiomassCCUElectrificationHydrogenWasteprocessingLCETslistedinalphabeticalorderLow-carbonhydrogenproductioncapacitytoreach5GWby2030452%ofglobalemissions1.0GHGemissions/GDPreal[MtCO2eq/bn$]0.14Population[M]66GDPreal/capita[k$]47.246Netzeroby2050Decarbonizedpowersystemby2035GHGemissionsreductionof68%by2030and78%by2035(from1990levels)100010203040508090Biomass59Electrification63CCU68Hydrogen72Wasteprocessing53PolicyprioritiesperLCET584033565653525835533359423333804259423356593370576672StatusquoIncentivesandTargetsTechnologiesandInfrastructureSupportingandEnablingMarketsandDemandCollaborationandInnovationCaveatsandInhibitorsLCETpolicysupportChemicalindustry’srevenue[bn$]74726576857373851006368673560677667Referenceyear2018forallmeasuresSources:GHGemissions:WorldBank,“TotalGreenhouseGasEmissions(ktofCO2equivalent)”:https://data.worldbank.org/indicator/EN.ATM.GHGT.KT.CE;Other:OxfordEconomics;GDPrealbasedon2015pricesTowardsaNet-ZeroChemicalIndustry21Progresstodate–Post-2030,hydrogenandCCUSarelikelytobedominantduetodedicatedstrategiesandfundingopportunities(bothcapexandopex)aswellascollaborationinindustryclusters–UKETS,nowdecoupledfromtheEUETS,sendsanimportantcarbonpricesignalfortheindustry–AmbitiousGHGreductionandenergygoalspushtowardsswiftdeploymentofrenewablesChangestomorrow–Biomassandwasteprocessingpoliciescouldbestrengthenedbydedicatedstrategiesandbespokesupportmechanisms(asforCCUS)–MatchingthehighactivityinpushingLCETsbytargets,incentivesandfundingopportunitieswithdemand-sidepoliciescouldunlocktheirfullpotential–IncreasinggreenpublicprocurementcouldtriggermoreprivatedemandforgreenproductsBiomassIntheUK,biomassisseenasatransitionaltechnologypre-2030.Whilethefocusliesonbioenergy(oftenasbioenergywithcarboncaptureandstorage–BECCS),itwillalsoplayaroleinfeedstockreplacementforthechemicalindustry.ComparedtootherLCETs,biomassislackingsolidsupportintermsofTechnologiesandInfrastructureaswellasCollaborationandInnovation.Thisisintendedtochange,however,withabiomassstrategytobereleasedinthefourthquarterof2022andtheBiomassFeedstocksInnovationProgrammegainingtraction.5353CCUCarboncapturetechnologiesareclearlyamongthelong-termfocusareas,facingafavourablepolicyenvironment.Currently,CCSseemstobefavouredoverCCUasthegovernmentseesgreaterpotentialfortheformer.AttemptingtoestablishCCUSinfourindustrialclusters(SuperPlaces)by2030,capturingupto10MtCO2annually,theUKplanstoinvestupto£1billion($1.3billion).54Inordertomakecarboncaptureeconomicallyfeasible,theUKsetupseveralbusinessmodelswithsimilareffectsascarboncontractsfordifference(CCfDs).5568WasteprocessingTheUK’scentralpolicydocumentonwastetreatment,theResourcesandWasteStrategy,laysoutthepathtowardsmoreresourceefficiencyandacirculareconomy.Detailsregardingreuseandrecyclingareyettobedefinedinachemicalsstrategy.6059HydrogenBoostedbyadedicatedstrategy,58theNetZeroHydrogenFundandasupportiveregulatoryenvironment,hydrogenissettoleadtheUKLCETspaceinthelongterm.By2030,low-carbonhydrogenproductionshouldbescaleduptoacapacityof5GW.5972ElectrificationTomeetthestarklyincreasingdemandforelectricity,theUKstrategyemphasizestheupscalingofoffshorewind,thecapacityofwhichshouldbequadrupledby2030upto40GW.56However,duetohighelectricityprices,electrifyingindustryprocessesischallenging.TheEnergy-IntensiveIndustriesCompensationSchemealleviatesthiseffectbypartiallyexemptingheavyindustry.RetrofittingandR&DforswitchingfromfossilfueltoarenewablecarbonalternativearesupportedbytheIndustrialFuelSwitchingCompetition(IFSC).5763TheUnitedKingdom(UK)hasputforwardacollectionofstrategiesthatlayoutacomprehensiveframeworkforthedecarbonizationoftheindustryandthecountryasawhole,withtheNetZeroStrategy51asthecentralpiece.Itisaccompaniedbyasetofapproachestailoredtoindividualsectorsandtechnologies(e.g.theIndustrialDecarbonizationStrategy,theHydrogenStrategy).TheTenPointPlanforaGreenIndustrialRevolutionpresentedinNovember2020focusesonlow-carbonelectricity52andlow-carbonhydrogenacrossseveralpolicyclusters./100/100/100/100/100TowardsaNet-ZeroChemicalIndustry2260HighpolicysupportUnitedStatesofAmericaGoalssetGHGemissionsperyear[MtCO2eq]PolicyclustersLCETsAverageBiomassCCUElectrificationHydrogenWasteprocessingLCETslistedinalphabeticalorderGHGreductionof50%by2030comparedto2005levels(NDC)6,024%ofglobalemissions13.1GHGemissions/GDPreal[MtCO2eq/bn$]0.31Population[M]328GDPreal/capita[k$]59.3491Pennsylvania:80%GHGreductionby2050California:netzeroby2045Netzeroby2050(non-binding)1000102030408090Biomass48Electrification53CCU62Hydrogen62Wasteprocessing44PolicyprioritiesperLCET52443849564442333561635938533367385261424948584835334470515085StatusquoIncentivesandTargetsTechnologiesandInfrastructureSupportingandEnablingMarketsandDemandCollaborationandInnovationCaveatsandInhibitorsLCETpolicysupportChemicalindustry’srevenue[bn$]677467628561878168678163627481Referenceyear2018forallmeasuresSources:GHGemissions:WorldBank,“TotalGreenhouseGasEmissions(ktofCO2equivalent)”:https://data.worldbank.org/indicator/EN.ATM.GHGT.KT.CE;Other:OxfordEconomics;GDPrealbasedon2015pricesTowardsaNet-ZeroChemicalIndustry23Progresstodate–TheFirstMoverCoalition70standsoutasaninitiativeonthedemandsideandissettoincludechemicalsandcarbonremovalfrom2022onwards–ThenewlyestablishedBuyCleanTaskForceaimstosupportthecreationofmarketsforlow-carbonmaterials71–Low-carbonsolutionsandambitionsdifferbystate,giventhevariabilityinresourcesandpredominantindustryChangestomorrow–Harmonizationofclimateactiononafederallevelcouldavoidinterstatecarbonleakageandreducecompliancecomplexityforindustryplayers–Aclearcarbonpricesignalcouldenableindustrytomakemoresustainableandfeasibleinvestmentdecisionsintheabsenceofcoherentfederalregulation–Adjustmentsinelectricityregulationscouldfacilitatecross-bordertradeandelectrificationinlinewithambitious2035targetBiomassBio-basedfeedstockalternativeshaveappearedontheradarofthechemicalindustryintheUSbutarenottopoftheagenda.DuetotheUSbeingself-sufficientwithregardtofossilhydrocarbons,useofbiomassasfeedstockhasyettopickupspeed.However,bioenergy–e.g.bio-ethanol-basedfuel–hasbeensupportedbyseveralfederalincentiveschemes.6344CCUCarboncapturetechnologiesareleadingtheUSLCETspace–onaparwithhydrogen.CCUSisbeingsupportedbyataxcreditpertonneofcarbonoxidesequestered(referredtoas45Q).64Whilepreviously45QappliedonlytoCCSandEOR,itnowalsoincludesotherqualifiedusesofcapturedcarbon.65Additionally,expertsexpectmorebioenergywithcarboncaptureandstorage(BECCS)tocontributetolower-carbonenergyproductioninthefuture.62WasteprocessingWasteprocessingisviewedasanimportanttechnologyforthefutureofthechemicalindustry.However,itisnotconsideredprimarilyasacontributortoclimatechangemitigationduetoitsambiguouslifetimeassessment.ThelatterleadstonoticeableoppositionfromNGOs,challengingtheupscalingofplasticrecyclingtechnologies.48HydrogenWhilehydrogenisastrongtrendacrosstheUS,thecolourvariesdependingonthestate–asafunctionofitsinfrastructureandlevelofclimateactionambition.Arangeoffundingopportunitiessupportthehydrogentrend,rangingfromgrantsforregionalcleanhydrogenhubs(InfrastructureBill)68toaproposedhydrogenproductiontaxcredit(PTC)(ReconciliationBill).6962TheUnitedStateshasbeenlackingaconsistentclimatestrategysofar,withsignificantvariabilitybetweenstates.Tryingtostabilizethecourseonclimateaction,thecurrentadministrationhasproposedtwomajorbillstouchinguponclimatechangemitigationandlow-carbontechnologies:theInfrastructureBillandtheReconciliationBill(BuildBackBetterBill).Whilethe$1trillionInfrastructureBillwasenactedinNovember2021,61thefateofthelargerReconciliationBill62ishighlyuncertain.Partsofit–includingtheclimatepolicies–mightbepassedin2022./100/100/100/100ElectrificationIn2021,theUSannounceditstargetofacarbonpollution-freepowersectorby2035.Anextremelyambitiousgoal,thisisintendedtostimulatesupportivepolicymeasuresandboosttheelectrificationofprocesses.Renewingandexpandinggridinfrastructure–alsomakingitfitformorerenewableenergy–isexpectedtobedrivenbyproposedtaxcredits66forelectricitytransmissioninvestmentsand$65billionfromtheInfrastructureBill.Tryingtocatchupregardingrenewableenergy,thefutureenergymixwilllikelyincludemoreoffshorewindpower,somegeothermalenergy–insomestates–andBECCS.ExistingnuclearplantswouldbesupportedbytheReconciliationBill,whilesmallmodular(nuclear)reactorsmightgaintheinterestofthechemicalindustryinthefuture.Recently,theestablishmentofanewOfficeofCleanEnergyDemonstrationshasbeenannouncedthatwillsupportgreenenergyprojects,distributingsome$20billion.6753/100TowardsaNet-ZeroChemicalIndustry24Ataglance:thecurrentstateofLCETsupport4Onagloballevel,increasedpolicyambition,trendsinsustainablefinancingandfundingopportunitiesaresupportingthedevelopmentandupscalingofLCETs.TowardsaNet-ZeroChemicalIndustry25ThepolicylandscapeOverviewofpolicysupportforLCETsinselectedjurisdictionsFIGURE2GlobaltrendsHydrogenistheleadingLCETareainfiveoutofsevenjurisdictionsHydrogenisonaparwithelectrificationintheEUandwithCCUintheUSBiomassutilizationreceivestheleastpolicysupportacrossjurisdictions–usuallyjustbehind(occasionallyinfrontof)wasteprocessingPolicySupportHighestCCUElectrificationWasteprocessingHydrogenSaudiArabiaBiomassCCUElectrificationWasteprocessingHydrogenJapanBiomassCCUElectrificationWasteprocessingHydrogenEuropeanUnionBiomassChinaCCUElectrificationWasteprocessingHydrogenBiomassUnitedArabEmiratesCCUElectrificationWasteprocessingHydrogenBiomassUnitedStatesofAmericaCCUElectrificationWasteprocessingHydrogenBiomassUnitedKingdomCCUElectrificationWasteprocessingHydrogenBiomassTowardsaNet-ZeroChemicalIndustry26SustainablefinanceandfundingopportunitiesDecarbonization-promotingfinanceandfundingdynamicsFIGURE3JurisdictionChinaCCfDsprovideopexsupportbygrantingtheoperatorthedifferencebetweenthecontractpriceandthecurrentCO2priceBusinessmodelsforCCUSprovidingopexsupport(pertonnecaptured)areontheriseintheUKCCUH2LeadinginSupportingandEnablingCarboncontractsfordifference(CCfD)NewbusinessmodelsTaxbenefitsfortheproductionoflow-carbonhydrogenareemployedintheUSProductiontaxadvantagesAUMinsustainablefinancehaverisenfrom$22.8tr(2016)to$35.3tr(2020)AUMinsustainablefinanceasshareoftotalAUMhasrisenfrom27.9%(2016)to35.9%(2020)Assetsundermanagement(AUM)intotalAssetsundermanagement(AUM)in%Numberofsustainablefundsincreasedfrom1,304(2010)to3,987(2020)SustainablefundmarketTechnologiesinfocusJapanCCUH2KSACCUH2UAECCUElectrificationH2UKCCUH2USCCUH2EUBiomassCCUElectrificationH21Trendinginstruments2JurisdictionChinaGreenBondEndorsedProjectCataloguerevisedin2021StatusEUTaxonomyinforce–toincludegasandnuclearpowerJapanScepticalofgreentaxonomyUAETobedevelopedaspartofsustainablefinanceframeworkUKCurrentlyunderdevelopment,basedonEUframeworkUSNoconcretedevelopmentsyetKSANoconcretedevelopmentsyetEmergingsustainablefinanceguidelines(taxonomies)3Growingsustainablefinance(globalpicture)4DefinitionsGreen/sustainablefinanceguideline(taxonomy)SustainablefinanceClassificationschemeforeconomicactivitiesaccordingtotheirsustainabilitytoguideinvestordecisionsTakingenvironmental,socialandgovernance(ESG)considerationsintoaccountininvestmentdecisionsGreenfinanceFocusingonlow-carbon,renewableenergyandotherprojectsprotectingtheenvironmentininvestmentdecisionsTowardsaNet-ZeroChemicalIndustry27IncludedareEurope,theUnitedStates,Canada,AustralasiaandJapan;source:GlobalSustainableInvestmentAlliance,GlobalSustainableInvestmentReview2020”:http://www.gsi-alliance.org/wp-content/uploads/2021/08/GSIR-20201.pdfSource:UNCTAD,“TheRiseoftheSustainableFundMarketandItsRoleinFinancingSustainableDevelopment”:https://unctad.org/system/files/official-document/diae2021d1_en.pdfNon-exhaustiveselectionoffundingopportunitiesacrossjurisdictionsTABLE1TowardsaNet-ZeroChemicalIndustry:AGlobalPolicyLandscapeforLow-CarbonEmittingTechnologies28JurisdictionLCETareaProgrammeDescriptionVolumeTimelineChinaElectrificationFundingfacilitytosupportdevelopmentofgreenenergybyChineseIndustryandMerchantBankandNationalEnergyAdministrationRMB3tr($470bn)TbdChinaBiomass;CCU;electrification;hydrogen;wasteprocessingCarbonEmissionReductionFacilityStructuralmonetarypolicyinstrumentprovidinglow-costfundstofinancialinstitutions,aimedatcarbonreductionprojectsmobilizingmoresocialcapitalTbdTbdChinaBiomass;CCU;electrification;hydrogen;wasteprocessingChinaCleanDevelopmentMechanismFundNationalclimatefundsupportinglow-carbongrowthandclimateresilienceinChina;revolvingfundthatreceivesregularcapitalinjectionsfromleviescollectedbythegovernmentoncleandevelopmentmechanism(CDM)projectsinChinaRMB495m($78m)since2008InforceEUBiomass;CCU;electrification;hydrogen;wasteprocessingRecoveryandResilienceFacilityCOVID-19recoveryfacility;morethan50%tobespentonmodernization(climateanddigital);implementedbymemberstateswithdedicatedplans;memberstatesfilerequestforfundingwithCommission€723.8bn($800bn)InforcesinceFebruary2021;coveringinvestmentsfrom2020to2026EUBiomass;CCU;electrification;hydrogen;wasteprocessingHorizonEuropeMostprominentprogrammeforresearchandinnovation,focusingonclimatechange;budgetdirectlydistributedtoresearchers/researchinstitutionsinmemberstatesbyCommission€95.5bn($105bn)–Ofwhich€5.4bn($5.9bn)fromRRF–Ofwhich€15bn($16.5bn)eachtodigital/industry/spaceandclimate/energy/mobilityActivefrom2021to2027EUCCU;electrification;hydrogenETSInnovationFundSupportingcommercialdemonstrationoflow-carbonprojectsinEuropeovertheperiod2020–2030throughsalesofETSallowances.FocusonCCU/CCSandlow-carbonprocessesinindustry€25bn($27.6bn)–Ofwhich€1.3–1.5bn($1.4–1.6bn)incurrentcallSecondlargecall(€1.5bn)tocloseinMarch2022JapanElectrificationFeed-intariffs(FIT)Requireselectricutilitiestopurchaseelectricitygeneratedfromrenewableenergysources(solarPV,windpower,hydraulicpower,geothermalandbiomass)basedonafixed-periodcontractwithfixedprice>11JPY/kWhforsolarPV>17JPY/kWhforwindStartedin2012;ongoingNon-exhaustiveselectionoffundingopportunitiesacrossjurisdictionscontinuedTABLE1TowardsaNet-ZeroChemicalIndustry:AGlobalPolicyLandscapeforLow-CarbonEmittingTechnologies29JurisdictionLCETareaProgrammeDescriptionVolumeTimelineJapanHydrogen;CCU;wasteprocessingGreenInnovationFundFundsupportingR&D/demonstrationprojects/socialimplementationoftheoutcomesJPY2tr($17bn)Established2021–fora10-yearperiodSaudiArabiaCCUInvestmentfundforcarboncaptureandcleancookingfuelprogrammeFundtosupportcarboncaptureandbackaplantoprovidecleancookingfuelsforpeople;SaudiArabiaistocontribute15%;detailsyettobeannouncedSAR39bn($10.4bn)TbdUAECCU;electrification;hydrogen;wasteprocessingDubaiGreenFundInvestmentfundfocusingonsustainable/greenprojectsacrossarangeofsectors.n/aOngoingUKBiomass;CCU;electrification;hydrogen;wasteprocessingIndustrialEnergyTransformationFund(IETF)SupportingenergyefficiencyprojectsandLCETs£315m($415m)TbdUKHydrogenNet-ZeroHydrogenFundKickstartinggreenandbluehydrogenintheUK£240m($315m)UKCCUCCSInfrastructureFundUKgovernmentfundtosupportCCUSinfrastructure£1bn($1.3bn)Budgetconfirmedin2020USHydrogenHydrogenproductiontaxcredit(PTC)(ReconciliationBill–uncertain)Opexsupportfortheproductionofbothgreenandbluehydrogenupto$3/kgdependingoncarbonintensity10-yearperiod/stilluncertainUSHydrogenGrantsforgreenhydrogendemonstrationprojects(InfrastructureBill)Researchandpilot-scaledemonstrationstoimproveefficiency,durabilityandcompetitivenessTargetingcostsof<$2/kgby2026$1bnTbdUSCCU45QtaxcreditTaxcreditpertonneofcarbonoxidesequestered,stored,usedinEORorusedinqualifiedways;creditrealizedfor12yearsafterfacilityplacedinservice.Upto$50/tProjecttocommenceconstructionby1January2026ConclusionTowardsaNet-ZeroChemicalIndustry30Worktodecarbonizeheavyindustry,includingthechemicalsector,isbeingundertakenwithanincreasedsenseofurgencyinallanalysedjurisdictions,andcommonalitiescanbeobservedacrosstheglobe.However,noticeabledifferencesinambitionandfocusarefound.Takingaconcludingglobalviewofthepolicylandscape,72itcanbeseenthat:–Onaverage,alternativehydrogenproductionisleadingtheway,followedbyCCUandelectrification,whilewasteprocessingandbiomassarelagging–HydrogenrepresentstheleadingLCETareaforfiveoutofsevenjurisdictions,whileintheEUitisonaparwithelectrificationandwithCCUintheUS–Biomassutilizationcurrentlyreceivestheleastpolicysupportacrossalljurisdictions–usuallyjustbehind(occasionallyinfrontof),wasteprocessing.However,botharelikelytoreceiveadditionalpolicysupportinthefuture,movingawayfromfossilfeedandfuel–Eventhoughthereisgreatleewayformoreambitiouspoliciesinallpolicyclusters,TechnologiesandInfrastructureandCollaborationandInnovationarebeingstrengthenedinmostjurisdictions–Creatingandstimulatinganappropriatemarketplaceformoresustainablyproducedgoodsappearstobetheareawithmoreroomforimprovementonaglobalscale(MarketsandDemand)–CaveatsandInhibitors–asdefinedinthemethodologysection–aregenerallymodest,butwithsignificantvariabilityamongjurisdictionsSeveralemergingtopicsthatmightplayanimportantroleinthecontinueddevelopmentoftheLCETpolicylandscapecanbeobserved:1.Scalinguplow-carbonenergysupplyfurthercouldbecritical,sincemostLCETsareenergy-intensive2.Guidinginvestmenttowardssustainableeconomicactivitiesthroughappropriateandjurisdiction-specificpolicyinstruments–e.g.carbonpricingorsustainablefinanceguidelines–mightencouragethedeploymentofLCETs3.PrivateandpublicinitiativestosupportnascentmarketsforsustainableproductshavethepotentialtoencouragetheeconomicsofLCETs–e.g.theFirstMoversCoalition73/Germany’ssupportforgreenleadmarkets744.Thoughcontentiousandpotentiallyhavingfar-reachingeffects,carbonborderadjustmentmechanismsaregainingprominenceindiscussionsacrossjurisdictions5.Publicfundingmechanisms–intermsofbothcapexandopex–andincreasedprivatefinancingcouldimprovethedevelopmentandupscalingofLCETsuntiltheyreacheconomicmaturityAstheorganizationforpublic-privatecooperationandhostoftheindustry-ledLow-CarbonEmittingTechnologiesInitiative,theWorldEconomicForumisuniquelypositionedtostrengthencollaborationbetweengovernmentactorsandthechemicalindustry.Cultivatingsynergiesbetweenthesestakeholderscanpromotethedevelopment,deploymentandupscalingofLCETsasrealdecarbonizationsolutions.Tothisend,policy-makersareinvitedtoengagewiththeinitiativewithinacollaborativeecosystemby:–Participatingintheregionalprivate-publicdialogueseriesonreducingGHGemissionsinthematerialssector–Catalysingpublic-privatecooperationfortheimplementationoftheindustry-backedSectorTransitionStrategies75toreachnet-zeroemissions–UpdatingandexpandingtheglobalpolicylandscapeforLCETsthoughaconsultativeprocessledbytheLow-CarbonEmittingTechnologiesInitiativeTowardsaNet-ZeroChemicalIndustry31Appendix:AbbreviationsBECCScapexCCERCCfDCCSCCUCCUSCO2eqEORETSGDPGHGemissionsKSALCETMtNDCNPVopexPVRED(II)sPVtUAEBioenergywithcarboncaptureandstorageCapitalexpendituresChinese-certifiedemissionsreductionsCarboncontractfordifferenceCarboncaptureandstorageCarboncaptureandutilizationCarboncapture,utilizationandstorageCarbondioxideequivalentsEnhancedoilrecoveryEmissionstradingsystemGrossdomesticproductGreenhousegasemissions(Kingdomof)SaudiArabiaLow-carbonemittingtechnology(initiative)MillionmetrictonnesNationallydeterminedcontributionNetpresentvalueOperatingexpendituresPhotovoltaic(Revised)renewableenergydirectiveSolarphotovoltaicMetrictonnesUnitedArabEmiratesTowardsaNet-ZeroChemicalIndustry32ContributorsWorldEconomicForumBorisBrkovicProjectSpecialist,Low-CarbonEmittingTechnologiesInitiativeJoannaKolomanska-vanIperenPlatformCurator,Energy,MaterialsandInfrastructurePlatformJörgenSandströmHeadofEnergy,Materials,InfrastructureProgram–IndustrialTransformationCharlieTanProgramLead,Low-CarbonEmittingTechnologiesInitiativeAccentureJohannesHuberStrategyAnalyst,ChemicalsandNaturalResourcesCatharinaMüller-BuschbaumManagingDirector,IndustryXDanielSachwehManagementConsultingAnalyst,ChemicalsandNaturalResourcesFelixSchröderBusinessStrategyManager,ChemicalsandNaturalResourcesHolgerVegelanManagingDirector,ChemicalsandNaturalResourcesLow-CarbonEmittingTechnologyInitiativecommunityindividualsJamesBrownClimateandEnergyPolicyLeader,DowFumioInomaeAdvisor,GreenTransformationDivision,MitsubishiChemicalCorporationChristophJaekelVice-PresidentCorporateSustainability,BASFMarcJaminDirectorGovernmentRelationsandPublicAffairsEurope,SABICJacquesRagotHeadofSustainabilityandPublicAffairsEMLA,CovestroGermanyLisaSchroeterGlobalDirectorofTradeandInvestmentPolicy,DowGuilhermeSiepierskiWorldwideFundingExcellenceManager&ExportControlComplianceManager,SolvayAdditionalacknowledgmentsAhmedBadrDirector/ProjectFacilitationandSupportdivision(PFS),InternationalRenewableEnergyAgency(IRENA)JennieDodsonHeadofSecretariat,MissionInnovationKarenFroitzheimSeniorManagerSustainability&PublicAffairs,CovestroJinkyungJeongAssociateProgrammeOfficer,ClimateFinanceandNDCs/ProjectFacilitationandSupportdivision(PFS),InternationalRenewableEnergyAgency(IRENA)BoqiangLinChangjiangScholar,DistinguishedProfessorandDean,ChinaInstituteforStudiesinEnergyPolicy,XiamenUniversityRobertD.McArverHeadofGovernmentAffairs,NorthAmerica,CovestroPaulNimmerfallStrohalLegalGroup(UAEOffice)AcknowledgementsTowardsaNet-ZeroChemicalIndustry33TimStockSeniorPolicyAdvisor,DepartmentofBusiness,EnergyandIndustrialStrategy,UKGovernmentEiichiUmekitaDirectorGeneral,InternationalAffairsDepartment,NEDODavidVictorProfessorofInnovationandPublicPolicyattheSchoolofGlobalPolicyandStrategy,UCSanDiegoYiXiandengSeniorManagerofGovernmentAffairs,SABICChinaLiangYisongDirectorofGovernmentAffairs,SABICChinaEndnotes1.WorldBank,“TotalGreenhouseGasEmissions(KtofCO2Equivalent)Data”:https://data.worldbank.org/indicator/EN.ATM.GHGT.KT.CE.2.HannahRitchieandMaxRoser,“CO2andGreenhouseGasEmissions”,OurWorldinData:https://ourworldindata.org/emissions-by-sector.3.IEA,“NetZeroby2050–ARoadmapfortheGlobalEnergySector”,2021,33:https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf.4.UnitedNations,“ParisAgreementtotheUnitedNationsFrameworkConventiononClimateChange”,2015,Article4:https://unfccc.int/sites/default/files/english_paris_agreement.pdf.5.RitchieandRoser,“CO2andGreenhouseGasEmissions”,OurWorldinData,August2020:https://ourworldindata.org/co2-and-other-greenhouse-gas-emissions.6.InternationalCouncilofChemicalAssociations(ICCA),“SustainableDevelopmentGoals:Goal8:DecentWorkandEconomicGrowth”[“Morethan96percentofmanufacturedgoods[…]aretouchedbychemistry”],n.d.:https://icca-chem.org/focus/sustainability/sdg/goal-8-decent-work-and-economic-growth/.7.WorldEconomicForum,“ImplementingLowCarbonEmittingTechnologiesintheChemicalIndustry”,2021:https://www3.weforum.org/docs/WEF_Implementing_Low_Carbon_Emitting_Technologies_in_the_Chemical_Industry_A_Way_Forward_2021.pdf.8.Renewablesornuclearenergy.9.IEA,“NetZeroby2050–ARoadmapfortheGlobalEnergySector”,123:https://www.iea.org/events/net-zero-by-2050-a-roadmap-for-the-global-energy-system.10.Ibid.,32et.seq.11.The60%thresholdwaschosentoreflectthepolicymodel’sscoringschemewithfourpossibleanswers(thesecond-highestratingwouldmean75outof100)andtheambitiousnatureoftheforward-lookingassessment.12.HannahRitchieandMaxRoser,“China:CO2CountryProfile”,OurWorldinData,11May2020,2:https://ourworldindata.org/co2/country/china.13.StefanoF.Verdeetal.,“TheEUETSandItsCompanionPolicies:AnyInsightforChina’sETS?”,EnvironmentandDevelopmentEconomics26,no.3(June2021):302–320:https://doi.org/10.1017/S1355770X20000595.14.WorldBank,“CircularEconomyLaw”:https://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/documents/China_CircularEconomyLawEnglish.pdf.15.NationalDevelopmentandReformCommission,People’sRepublicofChina(NDRC),“ActionPlanforCarbonDioxidePeakingbefore2030”:https://en.ndrc.gov.cn/policies/202110/t20211027_1301020.html.16.Ibid.17.EuropeanCommission,“AEuropeanGreenDeal”:https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en.18.EuropeanCommission,“Fitfor55(COM(2021)550Final)”,2021:https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52021DC0550&from=EN.19.EuropeanParliament,“RenewableEnergyDirective–Revisions”:https://www.europarl.europa.eu/legislative-train.20.EuropeanCommission,“SustainableCarbonCycles(COM(2021)800Final)”,2021.21.EuropeanCommission,“EuropeanGreenDeal:CommissionProposalstoRemove,RecycleandSustainablyStoreCarbon”[“Atleast20%ofthecarbonusedinthechemicalandplasticproductsshouldbefromsustainablenon-fossilsourcesby2030”],15December2021:https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6687.22.Eurostat,“CO2EmissionsfromEnergyUseClearlyDecreasedintheEUin2020”:https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20210507-1.23.EuropeanCommission,“EUHydrogenStrategy(COM(2020)301Final)”,2020,3.24.EuropeanCommission,“HydrogenandDecarbonisedGasPackage”:https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_6685.25.EuropeanCommission,“NewEUFrameworktoDecarboniseGasMarkets”:https://ec.europa.eu/commission/presscorner/detail/en/IP_21_6682.26.EuropeanParliament,“WasteFrameworkDirective”:https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02008L0098-20180705&from=EN.27.EuropeanCommission,“ANewCircularEconomyActionPlan(COM(2020)98Final)”,2020,20.28.JapaneseMinistryofEconomy,TradeandIndustry,“GreenGrowthStrategythroughAchievingCarbonNeutralityin2050”:https://www.meti.go.jp/english/policy/energy_environment/global_warming/ggs2050/index.html.TowardsaNet-ZeroChemicalIndustry3429.JapaneseMinistryofEconomy,TradeandIndustry,“6thStrategicEnergyPlan”,2021:https://www.enecho.meti.go.jp/en/category/others/basic_plan/pdf/6th_outline.pdf.30.IEABioenergy,“ImplementationofBioenergyinJapan–2021update”:https://www.ieabioenergy.com/wp-content/uploads/2021/11/CountryReport2021_Japan_final.pdf.31.JapaneseMinistryofEconomy,TradeandIndustry,“GreenGrowthStrategy”:https://www.meti.go.jp/english/press/2020/pdf/1225_001b.pdf.32.JapaneseMinistryoftheEnvironment,“TaxforClimateChangeMitigation”:https://www.env.go.jp/en/policy/tax/env-tax/20121001a_dct.pdf.33.S&PGlobal,“MitsubishiAnnouncesChemicalRecyclingProjectwithMuraTechnology,KBR”:https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/081221-mitsubishi-announces-chemical-recycling-project-with-mura-technology-kbr.34.TakeoKumagai,“Japan’sMETIAimstoStartDemonstrativeCarbonCreditMarketinFY2022-23”,S&PGlobal:https://www.spglobal.com/platts/en/market-insights/latest-news/electric-power/080521-japans-meti-aims-to-start-demonstrative-carbon-credit-market-in-fy-2022-23.35.DanielYergin,TheNewMap:Energy,ClimateandtheClashofNations(NewYork:PenguinPress,2020),302et.seq.;KingdomofSaudiArabia,“Vision2030”:https://www.vision2030.gov.sa/media/rc0b5oy1/saudi_vision203.pdf.36.KingdomofSaudiArabia,“KSANDC2021SubmissiontoUNFCCC”:https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Saudi%20Arabia%20First/KSA%20NDC%202021%20FINAL%20v24%20Submitted%20to%20UNFCCC.pdf.37.InternationalRenewableEnergyAgency(IRENA),“EnergyProfile:SaudiArabia”:https://www.irena.org/IRENADocuments/Statistical_Profiles/Middle%20East/Saudi%20Arabia_Middle%20East_RE_SP.pdf.38.AlJazeera,“SaudiArabiatoSetupInvestmentFundforCarbonCapture”:https://www.aljazeera.com/economy/2021/10/25/saudi-arabia-to-set-up-investment-fund-for-carbon-capture.39.SABIC,“CreatingtheWorld’sLargestCarbonCaptureandUtilizationPlant”:https://www.sabic.com/en/newsandmedia/stories/our-world/creating-the-worlds-largest-carbon-capture-and-utilization-plant.40.AbeerAbdulkareemandAmgadEllaboudy,“ClimatePolicyRecommendation:StrengthenSaudiArabia’sRenewableEnergyProgram”,ClimateScorecard:https://www.climatescorecard.org/2021/03/climate-policy-recommendation-strengthen-saudi-arabias-renewable-energy-program/.41.VivianNereim,“SaudiaArabiatoStartBuildingGreenHydrogenPlantinNeom”,BloombergGreen,17March2022:https://www.bloomberg.com/news/articles/2022-03-17/saudi-arabia-to-start-building-green-hydrogen-plant-in-neom#:~:text=The%20Neom%20project%2C%20called%20Helios,to%20split%20hydrogen%20from%20waterx42.Vision2030:“Neom”:https://www.vision2030.gov.sa/v2030/v2030-projects/neom/.43.KSAMinistryofEnergy,“HRHMinisterofEnergySignsaSaudi-GermanyMOUontheProductionofHydrogen”:http://www.moenergy.gov.sa/en/MediaCenter/News/Pages/27071442.aspx.44.KSA,“WasteManagementLaw”[inArabic]:https://laws.boe.gov.sa/BoeLaws/Laws/LawDetails/4d5bda56-cc0d-4b16-a025-ad9d00b281ab/1.45.KSA,“CircularCarbonEconomyNationalProgram”:https://www.cce.org.sa/.46.UAE,“SecondNationallyDeterminedContributionoftheUnitedArabEmirates”:https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/United%20Arab%20Emirates%20Second/UAE%20Second%20NDC%20-%20UNFCCC%20Submission%20-%20English%20-%20FINAL.pdf.47.TheOfficialPortaloftheUAEGovernment,“UAEEnergyStrategy2050”:https://u.ae/en/about-the-uae/strategies-initiatives-and-awards/federal-governments-strategies-and-plans/uae-energy-strategy-2050.48.TheOfficialPortaloftheUAEGovernment,“DubaiCleanEnergyStrategy”:https://u.ae/en/about-the-uae/strategies-initiatives-and-awards/local-governments-strategies-and-plans/dubai-clean-energy-strategy.49.DaniaSaadi,“UAEtoBuild$1BillionGreenAmmoniaFacilityinCleanEnergyPush”,S&PGlobal,26May2021:https://www.spglobal.com/platts/en/market-insights/latest-news/electric-power/052621-uae-to-build-1-billion-green-ammonia-facility-in-clean-energy-push.50.GPCA,“NewlyLaunchedCoalitionSignsPledgewithUAEMinistryofClimateChangeandEnvironment”,24April2019:https://www.gpca.org.ae/2019/04/24/newly-launched-coalition-signs-pledge-with-uae-ministry-of-climate-change-and-environment/.51.UKGovernment,“NetZeroStrategy:BuildBackGreener”,2021:https://www.gov.uk/government/publications/net-zero-strategy.52.Renewablesandadvancednuclearpower.53.UKDepartmentforBusiness,EnergyandIndustrialStrategy,“BiomassFeedstocksInnovationProgramme”:https://www.gov.uk/government/publications/apply-for-the-biomass-feedstocks-innovation-programme.54.UKGovernment,PolicyPaper,“TheTenPointPlanforaGreenIndustrialRevolution”:https://www.gov.uk/government/publications/the-ten-point-plan-for-a-green-industrial-revolution/title.55.UKDepartmentforBusiness,EnergyandIndustrialStrategy,“CarbonCapture,UsageandStorage(CCUS):BusinessModels”:https://www.gov.uk/government/publications/carbon-capture-usage-and-storage-ccus-business-models.TowardsaNet-ZeroChemicalIndustry3556.UKGovernment,PolicyPaper:“TheTenPointPlanforaGreenIndustrialRevolution”.57.UKDepartmentforBusiness,EnergyandIndustrialStrategy,“IndustrialFuelSwitchingCompetition”:https://www.gov.uk/government/publications/industrial-fuel-switching-competition.58.UKGovernment,“UKHydrogenStrategy”,2021:https://www.gov.uk/government/publications/uk-hydrogen-strategy.59.UKGovernment,PolicyPaper,“TheTenPointPlanforaGreenIndustrialRevolution”.60.UKDepartmentforEnvironment,FoodandRuralAffairs,“ResourcesandWasteStrategy:AtaGlance”:https://www.gov.uk/government/publications/resources-and-waste-strategy-for-england/resources-and-waste-strategy-at-a-glance.61.USRep.PeterA.DeFazio,“Actions–H.R.3684–117thCongress(2021–2022):InfrastructureInvestmentandJobsAct”,legislation,15November2021,2021/2022:https://www.congress.gov/bill/117th-congress/house-bill/3684/actions.62.Volumehasbeenreducedfromaninitiallyproposed$3.5trillion.63.WoodEnergy,“FederalPoliciesandIncentivesPromotingWoodyBiomassProductionandUtilization”:https://wood-energy.extension.org/federal-policies-and-incentives-promoting-woody-biomass-production-and-utilization/.64.AngelaC.JonesandMollyF.Sherlock,“TheTaxCreditforCarbonSequestration(Section45Q)”,8June2021:https://sgp.fas.org/crs/misc/IF11455.pdf.65.GlobalCCSInstitute,“45Q:The‘MostProgressiveCCS-SpecificIncentiveGlobally’IsNowOpenforBusiness”:https://www.globalccsinstitute.com/news-media/insights/45q-the-most-progressive-ccs-specific-incentive-globally-is-now-open-for-business/.66.AspartoftheReconciliationBill.67.USDepartmentofEnergy,“DOEEstablishesNewOfficeofCleanEnergyDemonstrationsUndertheBipartisanInfrastructureLaw”,Energy.gov:https://www.energy.gov/articles/doe-establishes-new-office-clean-energy-demonstrations-under-bipartisan-infrastructure-law.68.NortonRoseFulbrightProjectFinance,“HydrogenFundingandTaxCredits”:https://www.projectfinance.law/publications/2021/december/hydrogen-funding-and-tax-credits/.69.S&PGlobal,“HydrogenTaxCreditWouldSupportBothGreen,BlueProduction”:https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/hydrogen-tax-credit-would-support-both-green-blue-production-67404374.70.WorldEconomicForum,“FirstMoversCoalition”:https://www.weforum.org/first-movers-coalition.71.DavidShepardson,“BidentoLaunch‘BuyClean’USGovernmentTaskForce”,Reuters,15February2022:https://www.reuters.com/business/sustainable-business/biden-launch-buy-clean-us-government-task-force-2022-02-15/.72.Asmentionedinthemethodologychapter,theanalysisandinsightsrefertothepolicyaspectsonly(notconsideringtechnicaloreconomicfactors).Forsimplicity,succinctwordinghasbeenused.73.WorldEconomicForum,“FirstMoversCoalition”:https://www.weforum.org/first-movers-coalition.74.GermanFederalMinistryofFinance,“ImmediateClimateActionProgrammefor2022”:https://www.bundesfinanzministerium.de/Content/EN/Downloads/Climate-Action/immediate-climate-action-programme-for-2022.pdf?__blob=publicationFile&v=3.75.MissionPossiblePartnership,“SectorTransitionStrategies”:https://missionpossiblepartnership.org/our-approach/sector-transition-strategies/.TowardsaNet-ZeroChemicalIndustry36WorldEconomicForum91–93routedelaCapiteCH-1223Cologny/GenevaSwitzerlandTel.:+41(0)228691212Fax:+41(0)227862744contact@weforum.orgwww.weforum.orgTheWorldEconomicForum,committedtoimprovingthestateoftheworld,istheInternationalOrganizationforPublic-PrivateCooperation.TheForumengagestheforemostpolitical,businessandotherleadersofsocietytoshapeglobal,regionalandindustryagendas.
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