Resources for Defossilized Chemical Production in the United States

This Working Paper is part of Industrial Innovation & Decarbonization within U.S. Climate. Reach out to Zachary Byrum for more information.

Mitigating the worst impacts of climate change necessitates immediately reducing greenhouse gas (GHG) emissions across all sectors of the economy, including transformative changes in the United States' high emitting industrial sectors. Comprising approximately 23% of U.S. greenhouse gas (GHG) emissions or 30% if including electricity use, heavy industry processes are carbon intensive and varied, requiring multiple mitigation measures. Petrochemical production emits 12% of industrial emissions, the sector's highest share, and demand for chemical products will likely increase.

Chemical production is also the second highest emitting industry of toxic pollutants. According to EPA's 2021 Toxic Release Inventory, chemical manufacturers and distributors reported releasing about 176,000 tonnes of toxic pollutants into the environment. Many of these pollutants are carcinogenic or otherwise hazardous to human health with prolonged exposure.

With thousands of products made from primary chemicals, reducing emissions will require ambitious approaches. One approach is to replace fossil fuel feedstocks that are turned into primary chemicals with non-fossil feedstocks, creating "defossilized" chemicals. Non-fossil feedstocks include waste biomass, clean hydrogen, captured CO2 and ethanol. When produced or obtained through low-carbon means, these feedstocks could reduce emissions modestly or substantially. Some analyses project that alternative feedstocks could yield a net-zero chemical sector when accompanied by other carbon-reduction strategies.

Some U.S. regions have significant existing or potential access to non-fossil feedstocks. Feedstock resources vary by region, with the most consequential inventories near sites of current chemical production. The Gulf Coast, the largest chemical hub, lacks sufficient alternative feedstocks today, but potential inventories are promising.

Focused on the U.S. chemical industry at the facility level, this working paper presents a new analysis estimating and mapping the alternative defossilized feedstock volumes needed to meet current primary chemical demand and visualizes the proximity of current chemical producers to potential resources for a defossilized U.S. chemical sector. It also discusses the chemical sector's emission sources and mitigation pathways, its role in the oil and gas (O&G) industry and impacts on communities.

This sector-wide analysis of defossilizing the chemical industry required four steps:

1. Estimate the current production volumes of primary chemicals for which data are available and which are not only made in refineries: ethylene, propylene, methanol and ammonia.
2. Select alternative feedstocks and technologies.
3. Estimate volumes of non-fossil feedstocks needed to meet current chemical output.
4. Map where these inputs could be obtained and processed into chemical products.

The paper aims to inform industrial stakeholders of opportunities to reduce GHG emissions by eliminating fossil feedstocks in chemical production. It also aims to help policymakers design incentives, regulations and guidance that lead to a net-zero chemical industry, and it contextualizes defossilization's role and potential in achieving U.S. climate goals.

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