Chemical Engineering August 2014 - 5

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Heading off the 'carbon bubble'
T
he newest voices calling for action by industry on climate change
issues are not the regulators, politicians, industry spokespeople,
engineers or scientists. They come from a potentially far more
influential group: the financial analysts and economists of an organization
called the Carbon Tracker Initiative (London, U.K., www.
carbontracker.org). Carbon Tracker approaches the issue of climate
change as an exercise in understanding and managing risk.
The chemical process industries (CPI) need to take notice of Carbon
Tracker's findings, because they could have far-ranging implications
for the future of our companies.
The findings of Carbon Tracker's report, which was released about
two years ago and has received great acclaim in sustainability circles,
are slowly beginning to sink in with industry, and are as follows:
* To avoid the risk of irreversible climate change, the world effectively
has a budget for the carbon dioxide that can be released into the
environment by using fossil fuels. That budget has been calculated
at 886 billion metric tons (Gtons) of CO2 over the first 50 years of
this century. But just 11 years into the 50-yr period, Carbon Tracker
found that one third of the 886 Gtons had already been emitted
* If you take all of the fossil reserves owned by governments, public
and private companies, they are the equivalent of 2,795 Gtons of CO2.
That means that only about 20% of fossil fuel reserves can be burned
without taking steps to mitigate the corresponding emissions
* It also implies that the publicly traded companies that own the
reserves are over-valued on their respective stock markets, since
a lot of what they own is simply unburnable. In effect, they own
" stranded assets " that cannot be exploited
Major players in fossil fuels have already been active in refuting
Carbon Tracker's findings. Their view is that the rapidly escalating
world population will need cost-effective energy and that their reserves
cannot therefore be " stranded. "
Imagine for a moment that there is sufficient pressure that fossil
fuel reserves truly become stranded. Where would that leave the CPI?
Here are some ideas for research and development that the industry
should be undertaking - maybe with some urgency: 1) Using CO
and CO2 as feedstocks for fuels and plastics. Several companies are
already investigating this way forward; 2) Improving biotechnology
routes to common chemicals and plastics, minimizing water and energy
use, and ensuring that they are thermodynamically realistic; 3)
Aiming for a " circular chemical economy. " This is a concept in which
the CPI have two streams - bio-components, which return to the environment
after use, and technical components, which are almost endlessly
recyclable into new products. Whether a true circular economy
is possible or not, there is a need for the CPI to get closer to the brand
owner and consumer, and design materials for their recyclability.
With all of the hoopla surrounding shale gas, it may seem that
the path for expansion in the CPI still depends on
cheap feedstocks and ever-growing production of
commodity products. But whether you believe or
disbelieve climate science, a time is coming when
more inputs and outputs into CPI processes will be
priced or taxed. Now is the time to realize the risks
and opportunities associated with climate change,
and get ahead of them.
■
John Pearson,
CEO, Chemical Industry Roundtables
ChemiCal engineering www.Che.Com august 2014 5
http://www.carbontracker.org http://www.accessintel.com http://www.Che.Com
Chemical Engineering August 2014

Table of Contents for the Digital Edition of Chemical Engineering August 2014
