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Can the World Make the Chemicals it Needs Without Oil?

Runeel Daliah, Analyst & Yuan-Sheng Yu, Senior Analyst
June 24, 2020

Earlier this year, we unveiled four key storylines driving the energy transition – one of them is the decarbonization of industry. Industrial processes remain the most difficult decarbonization challenge due to their high energy use, reliance on heat, and dependence on carbon serving as the primary building block for a variety of downstream chemicals. As the industrial sector continues to grow, how will the industry remove emissions and carbon from its processes while still meeting the growing global demand for its products?

Even the most aggressive decarbonization roadmaps foresee a continued role for fossil resources in the chemicals sector. While the primary role of the fossil industry today is to provide energy globally, electrification will slowly grab hold of the energy system, and the majority of energy scenarios forecast that feedstock use will become the primary growth driver of the oil and gas industry later in the century. According to the Shell Sky scenario, fossil demand for feedstock applications will surpass energy use in 2080, as the majority of feedstock for the chemical industry will consist of crude oil and natural gas.

Lux Research - The Next Energy Transition eBook

But forecasts may fail to account for new technologies that threaten the dominance of fossil feedstock in chemicals with the emergence of power-to-chemical technologies. Power-to-chemicals is the collective name given to electrolysis technologies that produce chemicals directly from electricity, water, and/or CO2. Although they are in an early stage of development, many believe that successful deployment will entirely displace crude oil and natural gas from the chemicals sector. For key player analysis, case studies, and more, check out our water electrolysis and CO2 electrolysis Tech Pages.

Relative Cost of Power-to-chemicals compared to incumbent Processes
This potential is responsible for the growing interest in power-to-chemicals, but there are also a series of key questions that remain unanswered. What is the cost compared to incumbent processes? Which chemical pathways are most likely to be electrified? How will rising carbon policies impact adoption? To address these questions, we performed a techno-economic analysis of eight power-to-chemicals pathways. Find the answers, analysis, and outlook for the future of chemicals production in our executive summary of the report, "Electrifying Chemicals."




- Blog: The Next Chapter: Four Storylines Driving the Energy Transition

- Blog: Energy's Hottest Topics & Best Tech Start-ups of 2019

- Executive Summary: Evolution of Energy Networks: Decarbonizing the Global Energy Trade

- Executive Summary: Electrifying Chemicals

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