Advance a comprehensive, ambitious policy framework to reduce industry emissions
As with industry overall, decarbonisation of the chemical industry will require multiple measures, including:
- Adopting mandatory CO2 policies covering industry and expanding international co-operation – domestically this might include carbon prices, while carbon border adjustments or international sectoral agreements might be considered to limit carbon leakage.
- Investing in and planning for supporting infrastructure, including for CO2 transport and storage and low-emission hydrogen production and distribution.
- Improving data collection, tracking and classification systems, in which industry participation and government co‑ordination are both important.
- Increasing investment in RD&D and deployment for low-carbon technologies, for example through finance mechanisms that mobilise private investment. This is essential for eliminating some emissions, including through investment in hydrogen and methods of reducing plastic waste.
- Creating a market for near zero-emission industrial products – initially through carbon contracts for difference or direct public procurement. For chemicals, this might include companies using alternatives to fossil fuels as feedstocks.
- Maximising energy productivity by accelerating progress in energy efficiency, recycling and material efficiency. Deploying best available technologies and material efficiency strategies can facilitate this, and policy makers can incentivise these actions.
- Managing existing assets and near-term investment in order to create a smooth energy transition (e.g. mandating refurbishment to near zero-emission technology to avoid stranded assets).