If $759 billion (£603bn) is invested by 2050, petrochemicals could be made with no carbon emissions.
That’s according to research by BloombergNEF (BNEF), which claims that electrification alongside carbon capture will be key in mitigating the environmental impact of the sector.
It reveals that the production of high-value chemicals (HVCs) that are critical in building plastics can be done in a less carbon intensive way with the right level of investment.
HVCs are to blame for 2% of the world’s global emissions, which is the same as the aviation industry.
BNEF states that if the correct investment is made into carbon capture and electrification, HVC production could rise, whilst simultaneously quashing carbon emissions to zero.
It estimates this cost to be close to $759 billion (£603bn), which is 1% of the amount needed to decarbonise the entire global energy sector by 2050.
For net zero to be achievable, the report stresses that it is imperative that all new petrochemical capacity and retrofits after 2030 are built with zero-emissions front-of-mind.
Carbon capture could cut hard-to-abate emissions from 40% of the overall sector, with electrification covering 35%. It expects bioplastics to only account for 2.5% of the market by 2050, as sustainable biomass becomes less abundant.
Growth in electric vehicle demand and therefore a drop in transport fuel requirements is listed as a key reason for most refineries beginning to close from 2030.
Given the fact chemicals are a key element in most supply chains, the report does warn that the need to decarbonise them would rise the costs of products and this charge would eventually fall on taxpayers.
Ilhan Savut, lead author of the report, said: “Deploying these technologies will be expensive in the short term but it could set the sector on a lower cost decarbonisation path.
“Given their long asset lifetimes, chemicals players must move quickly and fund net zero projects as soon as possible, or risk getting locked out of key technologies.
“Investments today will be key to managing longer-term costs and pay dividends post-2035.”