How much fossil fuel is in your cupboard?

How much fossil fuel are you harbouring in your house right now? The answer might be more than you think. Washing up liquid, paracetamol, plastic bottles and polyester clothing are just a few examples of the chemical products which use coal, oil or gas as an ingredient. These ‘chemical feedstocks’ mean that the carbon emissions embedded in these everyday products can be enormous.

Ethylene is the UK’s most mass produced bulk chemical, and it’s a precursor to many thousands of chemical and plastic products. Three giant ‘steam crackers’, located in Teesside, Fife and Grangemouth, produce almost three million tonnes of the stuff every year, from fracked ethane gas imported from the US. The embedded carbon in that ethylene alone is the same as the high carbon UK cement industry releases in emissions each year.

The chemical industry is often forgotten or misunderstood by policy makers. Or maybe it is deliberately avoided because of its enormous complexity. Fossil fuel lobbyists and those who would expand oil and gas production in the North Sea may point to chemical manufacturing as proof that we must keep the oil flowing indefinitely, arguing that it’s an industry that will always need oil and gas, like fertiliser production and aviation.

But innovation means those assumptions are out of date, just as they are in the fertiliser and aviation industries. Experts in academia and industry have been developing novel ways to make new and existing chemicals using carbon from plants, unrecyclable plastic waste and CO2 captured from the air. Meanwhile, as demand for oil and gas in other sectors declines, their ready availability and low cost are no longer guaranteed.

New Green Alliance analysis shows that, for the foreseeable future, none of the alternatives are likely to completely replace fossil resources in chemical manufacturing. But all of them can have a role. Some types of carbon feedstock may be best suited to make certain types of chemicals. For example, bio-based feedstocks are already being used for some consumer products like shampoo and cosmetics, whereas recycled plastic wastes may work well for the bulk production of polymers.

Some manufacturers are preparing for the transition to greener chemicals by exploring the alternatives. But as long as they remain more expensive than fossil fuels, a large scale transition is unlikely. This is where government policy comes in.

We are recommending that the government starts now to steer the industry in a new direction by working with chemical companies and trade bodies to explore a tradeable ‘green carbon mandate’. Like the existing zero emission vehicles mandate and the proposed sustainable aviation fuel mandate, it would require chemical manufacturers to prove that a certain fraction of the carbon embedded in their products comes from green or non-virgin fossil resources.

As with the UK emissions trading scheme, the credits should be tradeable. Manufacturers who get ahead of the curve with a higher proportion of non-fossil (or non-virgin) carbon in their products could sell their surplus credits to those who still need them to comply with the mandate.

To qualify, the new feedstocks would need to have lower environmental impacts than conventional fossil feedstocks and meet strict sustainability standards covering all supply chain emissions. This should also include biodiversity impacts and any potential harm from significantly increasing demand for waste plastics and plant material.

The minimum proportion of green carbon required should be gradually ramped up over time as a long term signal to the industry, driving down the proportion of fossil feedstocks used. We estimate 40 per cent by 2040 should be easily achievable.

Policy makers would have to decide when to apply the mandate. It could be when a finished product is sold, covering imports as well as domestic production, although accounting and traceability could be challenging. It could be applied earlier – to bulk chemical production –  but that would need to be applied equally to imports to be fair to domestic producers.

The future of chemical manufacturing will be greener. Although we don’t know exactly which ingredients will be most appropriate for all uses yet, there will be an inevitable transition away from fossil fuels.

The question for the UK is, will we be leaders and grow a thriving industry, offering jobs into the future? Or will we have to import from other countries that get ahead first, while our domestic chemical industry struggles to keep up, as has happened with steel and car manufacturing? As we have repeatedly highlighted, we need a comprehensive industrial strategy to drive British industries into the future. A green carbon mandate for the chemicals sector should be part of that.

This article was first published in BusinessGreen.