The project development company (PDC) will be designed and developed by an inclusive stakeholder primacy collaboration between Air Liquide, BASF, Clariant, Covestro, Dow, Mitsubishi Chemical, DSM, SABIC, Sibur, Solvay and the WEF, and is supported by the Mission Possible Partnership.

“LCET members embark together on the journey to net-zero emissions in the chemical industry by 2050,” said Roberto Bocca, member WEF’s Executive Committee. “This will require extraordinary business transformation, unprecedented partnerships and collaboration both within the private sector and across all stakeholders including society and governments.”

The joint undertaking, the WEF stated, represents the LCET initiative’s seminal transition from a knowledge-sharing platform to an implementation vehicle, as envisioned at its 2019 founding, and on course with its original mandate to accelerate greenhouse gas (GHG) reduction in the chemical production value chain. The Forum-hosted collaboration is designed to foster creative public-private partnerships and to enable pre-competitive cooperation, especially on common challenges to the industry, to drive sustainable solutions and collectively solve challenges on the path to net-zero emissions.

“The transformation towards climate neutrality is a must. Therefore, we need to translate climate targets now into concrete measures. We collaborate in the LCET initiative to jointly accelerate breakthrough technologies. We join forces to tackle critical technology challenges that cannot be tackled by a single company alone,” said Martin Brudermüller, CEO of BASF and LCET Chair. “Sharing technology and business risks in innovative ways is key to mastering this challenge successfully.”

Chemicals are essential for more than 95% of the world’s manufactured goods and, consequently, the sector is currently responsible for around 5% of total GHG emissions. Worldwide product demand is expected to quadruple by 2050.

According to the WEF, LCET technology teams have identified technical principles and specific measures that can convert traditional operating models into net-zero production methodologies. Through the newly formed PDC, these LCET pioneers will embark on tackling two key starting points of chemical value chains that are the largest sources of chemical GHG emissions: olefin production via steam cracking, and ammonia production based on dedicated hydrogen generation from methane or water.

The first joint programs are said to be on the way ,with an emerging R&D hub for plastic-waste processing and a collaborative project between BASF and SABIC, together with technology provider Linde, to pilot the world’s first electrically heated steam cracker furnace commercially. Further mission-critical technological building blocks – such as hydrogen generation in low-carbon emission processes, the use of CO₂ and biomass as feedstock and the overall electrification of chemical operations – are being addressed in the PDC pipeline.

“The products, technologies and services offered by the chemical sector are at the heart of global socioeconomic activity. As the LCET initiative moves into the critical implementation stage, it will demonstrate the ground-breaking innovation that our industry can achieve through collaboration”, said Yousef Al-Benyan, CEO of SABIC and LCET Co-Chair. “By working together to co-develop and upscale low carbon-emitting technologies, we will accelerate our circular carbon economy journey to carbon neutrality.”

Though technological challenges common to the sector can be addressed in intra-industry collaboration, deploying these new technologies on a commercial scale bears significant economic risk. Companies continue to advance individual efforts but transforming the entire sector will require massive capital investment, regulatory support and further coordination between financial partners, innovators, academic institutions, governments, and civil society.

The LCET initiative aims to foster alliances, potentially structured as joint ventures or start-up companies, to prioritize and innovate, to share knowledge and reduce investment risks. For example, co-investment in large projects that could not be financed by one party; joint IP schemes and complementary engagement with policy-makers, regulators and financial players; and co-marketing opportunities and demand creation for low-carbon products all can work together to encourage infrastructure development that enables low-carbon solutions in large systems such as electrical grids and pipelines.

The WEF said that this effort calls for new ways to finance net-zero solutions, creative sharing of expertise, and for more producers, technology providers and value chain partners to join the LCET initiative in meeting the Paris Agreement and the UN 2050 sustainability goals.