Carbon Neutrality by 2060

As the impacts of climate change increase, China announced the goal of "striving to peak CO2 emissions by 2030 and achieve carbon neutrality by 2060". Due to its resource and energy-intensive nature, the petrochemical industry has the highest carbon emissions in the industrial sector. The Plan for the Green Development of Industrial Sectors during the 14th Five-Year Plan period (2021-2025) states that by 2025, the specific energy consumption of key products, like ethylene, should reach an advanced world level and the petrochemical industry’s resource utilization significantly improves to help perfect the green manufacturing system.

To better analyze the current situation and critical steps for low carbon petrochemical development, RIPP and Deloitte China jointly prepared this Report. It starts with China’s low carbon development needs, extends to driving factors, development trends, key points, and challenges to the low carbon transition, and explains key tasks and technical development by 2025, 2030, and 2060 (targeted emission reduction timeline) in detail.

Carbon Reduction by 2025 – Approaches: During the 14th Five-Year Plan period, integrating management improvements, efficient energy utilization, process optimization, and intelligence will lay a solid foundation for low carbon transition in the petrochemical industry. RIPP provides an enterprise carbon emission statistics and accounting service through a "carbon peaking and neutrality" platform, uses carbon asset management software to assist in managing carbon reduction, develops carbon reduction technologies for efficient energy/resource utilization, refining/chemical process and intelligent optimization to reduce carbon emissions comprehensively, precisely and efficiently. As a global leading professional service provider, Deloitte developed specialized management software for low carbon investment and operations.

Carbon Peaking by 2030 – Technical Support: To achieve carbon peak goals by 2030, the petrochemical upstream and downstream industries need to work together on scientific, industrial planning, and reasonable productivity construction to ensure economic development and green transition go hand-in-hand. Based on the carbon reduction efforts by 2025, bio-based fuels and lubricants, innovative technology for a circular economy, and low-carbon basic chemicals production technology can firmly support and accelerate the carbon peaking in the petrochemical industry, while laying the groundwork for building a low-carbon value chain.

Carbon neutrality by 2060 – Route Strategy: To achieve the strategic goal of carbon neutrality in the petrochemical industry by 2060 and to create a green, low-carbon, circular economy and a clean, low-carbon, safe, and efficient energy system, the industrial and energy structures will undergo disruptive adjustments, and new and renewable energy will snowball and lead to the development of the industry. Upgrades and breakthroughs of green hydrogen, CCUS, or electrification are important routes for the petrochemical industry to achieve carbon neutrality.

As the petrochemical industry gradually shifts to green and low-carbon development, the carbon neutrality goal is an inevitable challenge and an opportunity to adjust industrial structure, improve competitiveness and realize ecological conservation and sustainable development. Enterprises should turn the challenge into an opportunity by embracing the industrial transformation and low carbon trend. By modeling carbon reduction contributions of technologies available in petrochemical production processes over time, typical refining enterprises are projected to achieve Net-Zero by 2060.