A Low-carbon roadmap for Belgium Study realised for the FPS Health, Food Chain Safety and Environment Industry sector chemicals document This document is based on content development by the consultant team as well as an expert workshop that was held on the 27-08-2012
Content Industry sector - chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Resulting scenarios Most important barriers to decarbonisation 2
Executive summary for the chemicals sector Construction of different future production trajectories In a high growth scenario overall chemical activities increase by 20% in 2050 compared to 2010, equivalent to an average growth rate of 0.49%, which could be considered as a fair compromise between high historical growth rates for Belgium and the stabilisation of the chemical sector at the European level. In a neutral scenario a zero growth is assumed, which expresses the view that Belgium remains an important producer of chemicals, but as the market for final products stabilises in Europe it is assumed that new activities will be mainly located outside Europe. In the low growth scenario, the activities decrease by 50% compared to 2010 levels and expresses a rather pessimistic view for the Belgian Chemical sector. Estimate of potential and cost for the GHG reduction opportunities Development of green chemistry, i.e. chemical products produced from biomass or algae production might contribute by replacing fossil based plastics and by fixing carbon in materials for several years. Energy efficiency might improve by better process control and reducing heat losses and energy performance of new plants might significantly outweigh those of existing plants. In traditional chemistry, a significant penetration of biomass is unlikely due to the specific processes, but hydrogen production can be based on electrolysis. CCS is also considered as an option, starting with process CO2 emissions from hydrogen and ammonia production and later on for bigger installations emitting more than 1Mton/year NOTE Except explicit mention, the reduction potential figures are mentioned at constant production, as reduction percentage versus 2010. Actions are applied in sequential order and the biomass potential is not included in the total. Levers are of ambition 3 (except for CCS where level 2 is also detailed) 3
List of references Association of petrochemical producers in Europe (APPE). Belgium greenhouse gas inventory data 2010 (NIR CRF v1.4), submitted to the UNFCCC. Belgium ETS registry. Rapportering benchmarking convenant (Vl.)/Accord de branche (Wal.) Essenscia website, http://www.essenscia.be. Ecofys, JRC-IPTS (2009), Sectoral Emission Reduction Potentials and Economic Costs for Climate Change (SERPEC-CC) Industry and refineries sector, October 2009. ICEDD, Atlas énergétique de la Wallonie, http://www.icedd.be/atlasenergie/ VITO, Energiebalans Vlaanderen, http://www.emis.vito.be/cijferreeksen PRIMES model documentation 4
Content Industry sector - chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Resulting scenarios Most important barriers to decarbonisation 5
Belgium has reduced its emissions by ~8% since 1990 GHG emissions in Belgium, MtCO 2 e Agriculture, Waste & others Buildings Transport Industrial processes Industry combustion Energy 143 151-8% 146 144 132 Delta 90-10 % -8% -27% +18% +18% -15% -28% Emissions have gone down by ~8% This is due to the Energy production industries (-12%) and the rest of the Industry At the same time, emissions in both Transport and Buildings have grown significantly by 18% since 1990 90 95 00 05 10-12% Source: Belgium GHG emissions inventory, Climact 6
Industry emissions are decreasing, mainly because of the steel industry Industry emissions (MtCO 2 e) 48,5 51,8-23% 48,9 44,5 Refineries (in chemicals) Steel Industry 37,2 Chemicals Industry Pulp & Paper Industry 11,2 13,9 15,0 14,5 13,4 ~85% covered by workshops Food, drinks and tobacco Industry Construction (Bricks and ceramics) Non-Ferrous metals Cement Industry Lime Industry Wallonia data Minerals Industry (glass) 5,0 Other 1990 1995 2000 2005 2010 NOTE: Cement & Lime assessed based on Wallonia low Carbon, Minerals deducted from total non metallic minerals from Regional data, Oils and Gas included in chemicals, Machines skipped and construction assessed from Regional data SOURCE : NIR CRF v1.4, Wallonia 2050 Low Carbon Growth 7
Chemical industry represents 29 % of GHG emissions and 27% of the industrial energy consumption GHG emissions and energy consumption in Belgium 2010 (MtCO 2 e, TWh, %) ~85% covered by workshops Wallonia datasets MtCO 2 e 37 19% 29 6% 3% 11% 7% 1% 13% 2% 1% TWh 119 26% 27 5% 8% 5% 2% 11% 5% 4% 1% 100% Refineries (in chemicals) Steel Industry Chemicals Industry Pulp & Paper Industry Food, drinks and tobacco Industry Construction (Bricks and ceramics) Non-Ferrous metals Cement Industry Lime Industry Minerals Industry (glass) Other Food represents 6% of emissions for 8% of the energy Non metallic minerals (Cement, Lime and Glass) have high process emissions In steel, there would be less TWh if the coke used as reducing agent was not included in the analysis (cfr with the IEA data) Emissions Energy NOTE: (1) Excluding electricity emissions and consumption (2) Amongst solid fuels, coke use in steel industry has two function (raw material and energy) Both are included in the analysis but only the 2nd creates emissions in the atmosphere SOURCE: NIR CRF v1.4 8
Petrochemical industry seems to stabilize in Europe European capacities and production statistics (kton) 30,000 25,000 20,000 15,000 10,000 5,000 Cap ethylene Cap propylene Cap benzene Prod ethylen Prod propylene Prod benzene 0 2007 2008 2009 2010 2011 SOURCE : Association of petrochemical producers in Europe (APPE) For propylene Appe reports higher production figures than capacities. This is related to the definition of ethylene and propylene production capacities. In fact ethylene and propylene may sort in different yields within boundaries from the same installations. 9
Index base 1990 Outstanding decline in energy intensity at EU level But less progress for Belgium Belgian and EU production and energy consumption index (index base 100 in 1990) 200 180 160 140 120 100 80 60 40 20 0 1990 1995 2000 2005 2009 EU-Production BE-Production EU-Energy consumption BE-Energy consumption EU-specific EC BE-specific EC Energy intensity has dropped due to increased share of fine chemicals SOURCE : calculations based on CEFIC and Essencia 10
This visions seems not to be shared by Belgian chemical federation Belgium has a high concentration of bulk chemicals SOURCE : Essenscia 11
The chemical industry is important and complex... Characteristics of chemical industry in Flanders Essenscia represents 245 sites in Flanders and 75 sites in Wallonia In Flanders energy statistics for approx. 165 sites are available: 47 benchmark/ets, 36 audit convenant and 82 SMS companies Production of several hundreds of chemical products, involving (almost) as many different processes The total energy consumption is of 178 PJ (1) Benchmark/ETS companies consume 95 % 24 sites have an energy consumption above 1PJ representing 86 % of energy consumption Within the benchmark sites energy consumption is composed of: 44% recuperation fuels 19% electricity 9 % steam from CHP 28% classical fuels of which 2/3 rd natural gas There is a high penetration of CHP NOTE : (1) including electricity (35.4 PJ) and steam from CHP(16.7PJ), excluding non-energetic use (340 PJ) 12
The chemical industry is involved in the production of many products and processes Base chemicals Ethylene Propylene Benzene Mono vinyl chloride Toluene Sulfuric acid Butadiene Hydrogen Nitric acid Adipic acid Caprolactam Ethylene oxide Acrilates Amines... Ammonia Styrene Formaldehyde Aniline Derived products LDPE, HDPE, PVC Fertilisers Polystyrene... MTBE Rubber 13
Billion Sector emissions increase because of higher activity Increase is sharpest in Flanders Chemical sector GHG emissions ( Mt CO 2 eq) 16 14 12 10 8 6 4 60 50 40 30 20 Process emissions ammonia production Process emissions Nitric acid production Process emissions Caprolactam production Other process emissions (H2?) Other fuels Biomass Significant increase in fuel and processemissions (+19%). Fuel switch to gas Sharp reduction in process emissions Nitric acid production 2 0 1990 1995 2000 2005 2010 10 0 Gaseous Fuels Solid fuels Other process emissions??? SOURCE: NIR CRF v1.4 14
Most of the CO 2 emissions are in Flanders Verified emissions of ETS companies in chemical sector (ktco 2 e) SOURCE: ETS registry CO2 process emissions of ammonia are not included CHP emissions are only included for autoproducers 15
Kton CO2 Most of the CO 2 emissions are in Flanders Verified emissions of ETS companies in chemical sector (kton CO 2 e) 1200 1000 800 600 400 200 0 Production sites located in Flanders Production sites located in Wallonia SOURCE: ETS registry 16
ktoe In PRIMES models, energy intensive industries reduce CO 2 emissions by 25 % in EU-low carbon scenarios 250000 200000 150000 100000 50000 Energy consumption of energy intensive industries in EU roadmap Energy consumption of energy intensive industries in the EU roadmap (ktco 2 e) 0 1990 2000 2010 2020 2030 2040 2050 Reference scenario Energy efficiency scenario Diversified supply technologies scenario Lack of transparency in EU-Roadmap Emissions chemical industries? Activities? Application CCS? 17
In PRIMES model chemical industries comprises the following activities But this is the only information which is publicly available Subsectors Fertilizers Petrochemicals Inorganic chemicals Low enthalpy chemicals Energy uses Air compressors Low enthalpy heat Lighting Motor drives Electryc processes Steam and high enthalpy heat Thermal processes Energy use as raw materials 18
Growth prospects Belgium Trends apparent at world, EU and Belgian level World China biggest chemical producer worldwide Demand for chemical products increases sharply in fastdeveloping countries Likely strongest increase in bulkchemical production outside Europe EU (1) Shift from industry to services Stabilization of internal demand for chemicals Opportunities to increase exports to fast developing countries Capital intensive sector, suffering less from labor costs Biomass production Growing importance of pharmaceuticals Belgium (2) Competitive, capital intensive industry Dependence of EU market (72 % of sales) Strong demand for insulation materials 19
Content Industry sector - chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Resulting scenarios Most important barriers to decarbonisation 20
DEMANDE ENERGETIQUE et EMISSIONS Industry is one of the various sectors studied in the process of constructing the low carbon scenarios Focus of the consultations 1 Bottom up study by sector of feasible GHG reductions 2 Test each sector with external experts 3 Adapt the DECC model to Belgian data and improve it 100% = 131,4 MtCO 2 e Agriculture and waste (incl. LULUCF) Others Power generation 8% 20% Transport 1% 18% Consultations by sector with external experts Buildings 25% 18% Industry (combustion) 10% Industry (processes) Discussions with international experts 4 Define and model various scenarios 5 Detail key implications for these scenarios 6 Review conclusions with the steering and high level consultation committees Demande et émissions élevées Demande et émissions moyennes Demande et émissions faibles 5 scénarios de décarbonisation de 80 à 95% Scénario A Scénario B Scénario E Scénario D Scénario C Part intermittente faible Part intermittente faible (~40%) CSC inclus (~60%) CSC exclus OFFRE ENERGETIQUE ET CAPTURE D EMISSIONS Federal administration Industry Civil organizations Academics 21
The Open-source Prospective Energy and Emissions Roadmap Analysis tool (OPE²RA) developed in partnership with the DECC (UK) will be used to develop the scenarios Crossgovernment engagement Energy and emissions Natural resources Emissions Technology Industry Workshops and Evidence 22
OPE²RA balances demand and supply based on fixed input parameters as well as modifiable levers -80 to -95% GHG emissions vs. 1990 23
Industrial sectors modelled Refineries Iron & Steel Chemicals Paper Food Sector Consultation Belgian Petroleum Federation Steel Federation Essenscia Cobelpa Fevia Bricks & Ceramics Non-ferrous metals Cement Lime Glass Bricks Federation Agoria Low Carbon Wallonia Roadmap Low Carbon Wallonia Roadmap Low Carbon Wallonia Roadmap 24
A detailed analysis is performed for each industrial sector Understanding the industry Modelling demand trajectories Modelling trajectories with intensity levels + CCS Analyses Definition of the value chain Analyses of growth and competitiveness Potential of CO 2 reduction incl. costs Results Modelling the emissions tree Demand trajectories Trajectories with different intensity levels + CCS SOURCE: Climact 25
Levers are applied in a sequential manner on an indepth modeling Modeling logic for the chemical industry Chemical industry example Sub-industries Fertilizers Olefins Electric processes Other ETS SMEs Capacity 2010-2050 Tons Production Intensity Fuels 2010-2050 2010-2050 2010-2050 Tons TWh /tons % Electricity % Solid fuels % Liquid fuels % Gaseous fuels % Biomass % Others Process emissions 2010-2050 tco 2 e /ton produced Emissions 2010-2050 tco 2 e Fuel costs 2010-2050 Capex costs Action Carbon intensity level 3 TWh /tons Action CCS level 3 TWh /tons tco 2 e Situation in 2050 26
4 ambition levels are defined for each lever Level 1 Level 2 Level 3 Level 4 Minimum effort (following current regulation) No additional decarbonisation efforts/policies What will become a «Reference scenario» Moderate effort easily reached according to most experts Equivalent to the development of recent programs for some sectors Significant effort requiring cultural change and/or important financial investments Significant technology progress Maximum effort to reach results close to technical and physical constraints Close to what s considered reachable by the most optimistic observer One of the key objectives of the consultation is to support the estimation of these levels based on existing expertise 27
TWh Activity classification in Ope²ra model 90 80 70 60 50 40 30 20 10 0 NE-Solids NE-Naphta NE-gas Biomass Electricity Other fuels Heat Solids Liquids Gas Energy consumption in the different categories in the Ope²ra model NE: non energetic use - In Olefin production NE naphta does result in CO 2 emissions. In ammonia and hydrogen production NE-gas result in CO 2 process emissions Sources: Aggregated data from Flemish and Walloon energy balances. Split in sub-sectors calculated by VITO based on literature data 28
Content Industry sector chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Olefin production Ammonia & Hydrogen production Chlorine production Other ETS activities Other non-ets activities N20 emissions Resulting scenarios Most important barriers to decarbonisation 29
Reduction potential Reduction levers are additional and applied in the following order Methodology Product mix Energy efficiency Process improvements Fuel switching End of pipe Augmenting the proportion of product which require less CO 2 for production Reduce mechanical and thermal losses Recuperate thermal energy (CHP) Modification of processes Towards fuels which emit less CO 2 Carbon capture and storage Substitution by carbon free products (e.g. algae) Energy efficiency Electrification of process (e.g. electrolysis) Fuel vs. gas CCS CHP Biomass versus fossil fuels BAT application 30
Levers Reduction potential 5 levers are being assessed in each chemical sub-sector Levers assessed in the chemical sector and applicability across subsectors Subsectors Olefins Ammonia & Hydrogen Chlorine Other ETS activities Other non-ets activities N2O emissions Product mix Green chemistry Modelled in demand Green chemistry / Energy efficiency V V 100 % switch to membrane V V WKK Process improvements / / / (included in energy efficiency) (included in energy efficiency) (included in energy efficiency) (included in energy efficiency) SRC Fuel switching Electrolysis ( level 4) CCS Yes On process emissions / Natural gas or biomass / N.R. In function of installation size None N.R. 31
Content Industry sector chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Olefins Ammonia & Hydrogen production Chlorine production Other ETS activities Other non-ets activities N2O emissions Resulting scenarios Most important barriers to decarbonisation 32
Olefins 3 trajectories influencing energy demand will model growth prospects Belgium Possible growth scenarios European population: 1% GNP: 1,6% (1) Trajectory 1 Olefins High growth assumption + 20% by 2050 Increased demand by construction sector Trajectory 2 Reference growth assumption 0% growth Trajectory 3-50 % by 2050 Delocalisation (CO2 price) Low growth assumption SOURCE: (1) Federal Planning bureau 33
Olefins Changing the product mix Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 10 % green chemistry 20% green chemistry 50 % green chemistry SOURCE: SERPECCC study 34
Olefins Energy efficiency Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 10 % improvement by moderate changes 20 % improvement by using state of the art technology partly retrofit and new built 40 % reduction demolishing and rebuilt (by 2050) all installations use of catalysts in crackers, recuperation of heat losses SOURCE: SERPECCC study 35
Olefins Process improvements (not included in previous) Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints Included in energy efficiency measures Included in energy efficiency measures Included in energy efficiency measures SOURCE: SERPECCC study 36
Olefins Fuel switching Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of fertilisers Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 0 % fuel switching 0 % fuel switching 0 % fuel switching SOURCE: SERPECCC study 37
Olefins CCS Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints No capturing No capturing CCS applied on crackers SOURCE: SERPECCC study 38
Olefins Reduction potential of the different levers, horizon 2050 Reduction levers Lever Reduction potential (2050) in % 1 2 3 4 Cost Description Product mix 10% 20% 40 % Green chemistry replacing traditional plastics Energy efficiency 10 % 20% 40% Process improvements Included included included Fuel switching N/A N/A N/A CCS Applied on 4 crackers NOTE: Assuming all regions of the world perform a similar effort SOURCE: essenscia consultation 39
Content Industry sector chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Olefins Ammonia & Hydrogen production Chlorine production Other ETS activities Other non-ets activities N2O emissions Resulting scenarios Most important barriers to decarbonisation 40
Ammonia 3 trajectories influencing energy demand model growth prospects Belgium Possible growth scenarios European population: 1% GNP: 1,6% (1) The main use of ammonia is for fertilisers production. The price of fertilisers depends on the price of natural gas. A high price for natural gas might reduce demand for ammonia Trajectory 1 Trajectory 2 Ammonia (ton) High growth assumption + 20% by 2050 (0.495% per year) Increased needs for biomass production Reference growth assumption 0% growth Trajectory 3 SOURCE: (1) Federal Planning bureau -50 % by 2050 (-1,72% per year) Substituting to natural fertilisers Low growth assumption 41
Ammonia production Technical solutions (Serpec study ) Ammonia Standard technology 39 GJ/t NH 3 - new BAT technology 28 GJ /t NH 3 (1) Retrofit options for improvements of reformer section and CO 2 removal section Low pressure (improved catalysts) and improved process control Current situation : 2/3 at 28 GJ /t NH 3 and 1/3 at 39 GJ/t NH 3 (2) Stochiometric : 19,8 GJ/t NH 3 BAT 2050 : 24 GJ/t NH 3 (3) (1) Source : SERPEC study (2)Source : essenscia consultation (3) Source: Own calculations and assumption 42
Ammonia Changing the composition of fertilisers Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of fertilisers Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 5 % ammonia/nitric acid substituted by carbon free alternative. 20% substituted by carbon free alternative. 50% substituted by carbon free alternative. SOURCE: SERPECCC study 43
Ammonia Energy efficiency Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of fertilisers Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints Small improvements in oldest installations saving 2.6 GJ/t NH 3 All installations at 28 GJ/t NH 3 New built reformers: all installations at 24 GJ/t NH 3 SOURCE: SERPECCC study 44
Ammonia Fuel switching Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 0 % fuel switching 0 % fuel switching Hydrogen production by electrolysis SOURCE: SERPECCC study 45
Ammonia CCS Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication CO 2 captured form process emissions ammonia (1 Mton) Significant effort requiring cultural change and/or important financial investments Idem level 2 Maximum effort to reach results close to technical and physical constraints Idem level 2 SOURCE: SERPECCC study 46
Ammonia Reduction potential of the different levers, on a 2050 horizon Reduction levers Lever Reduction potential (2050) in % 1 2 3 4 Cost Description Product mix 5% 20% 50% Product mix in fertilisers Energy efficiency 2.6 GJ/Ton NH3 in older plants All installatio ns at 28 GJ/t NH3 All installations at 24 GJ/t NH3 Level 2 6 ton/ Level 3 4.6 ton Level 2-3 process improvements Level 4 is new plant Fuel switch Electrolysis for H2 production Fuel switching Electric H2 production CCS Capturing CO2 process emissions Capturing CO2 process emissions Not compatible with fuel switching NOTE: Assuming all regions of the world perform a similar effort SOURCE : consultation Essenscia 47
Content Industry sector chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Olefins Ammonia Chlorine production Other ETS activities Other non-ets activities N2O emissions Resulting scenarios Most important barriers to decarbonisation 48
Electric processes 3 trajectories influencing energy demand model growth prospects Belgium Possible growth scenarios European population: 1% GNP: 1,6% (1) Chlorine has many different applications of which PVC is a major one. PVC is used in construction sector( windows), automobile, and many other sectors. Demand for PVC and hence chlorine is sensitive to fluctuations in construction and automotive sectors. Trajectory 1 Trajectory 2 Trajectory 3 Electric processes High growth assumption + 20% by 2050 Demand increase in various sectors Reference growth assumption 0% growth -50 % by 2050 Low growth assumption SOURCE: (1) Federal Planning bureau 49
Electrical processes energy efficiency Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints All mercury cell production capacity replaced by membrane cell According to Serpec 20 % improvement for membrane process compared to amalgam process SOURCE: SERPECCC study 50
Electric processes Reduction potential of the different levers, on a 2050 horizon Reduction levers Lever Reduction potential (2050) in % 1 2 3 4 Cost Description Product mix NA NA NA NA Energy efficiency Process improvements 200 kton mercury cap replaced All mercury replaced Included Included Included Membrane process replacing older Idem level technologies 3 Fuel switching NA NA NA CCS In electricity sector In electricity sector In electricity sector NOTE: Assuming all regions of the world perform a similar effort SOURCE: consultation Essenscia 51
Content Industry sector chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Olefins Ammonia and H2 Electric processes Other ETS activities Small and medium N2O emissions Resulting scenarios Most important barriers to decarbonisation 52
Other ETS activities 3 trajectories influencing energy demand model Growth prospects Belgium Possible growth scenarios European population: 1% GNP: 1,6% (1) Trajectories have been chosen to be consistent with Olefins production ( bas materials) Trajectory 1 Trajectory 2 Other ETS activities High growth assumption + 20% by 2050 Increased demand by construction sector Reference growth assumption 0% growth Trajectory 3-50 % by 2050 Low growth assumption SOURCE: (1) Federal Planning bureau 53
Other chemical activities under ETS Product mix change Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 10 % green chemistry 20% green chemistry 40 % green chemistry SOURCE: SERPECCC study 54
Other chemical activities under ETS Energy efficiency Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 10 % improvement by moderate changes 20 % improvement by using state of the art technology 30 % reduction by new plant design SOURCE: SERPECCC study 55
Other chemical activities under ETS Process improvements (not included in previous) Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints Included in energy efficiency measures Included in energy efficiency measures Included in energy efficiency measures SOURCE: SERPECCC study 56
Other chemical activities under ETS Fuel switching Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 100% natural gas 100% natural gas 100 % natural gas SOURCE: SERPECCC study 57
Other chemical activities under ETS CCS Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints No capturing CCS on all sites emitting more than 1 Mton/year CCS on all sites emitting more than 200 Kton/year SOURCE: SERPECCC study 58
Other chemical activities under ETS Reduction potential of the different levers, on a 2050 horizon Reduction levers Lever Reduction potential (2050) in % 1 2 3 4 Cost Description Product mix 10% 20% 40% Bio chemicals (Algae..) Energy efficiency 10 % 20% 30% Process improvements Included Included Included Fuel switching 100% natural gas 100% natural gas 100 % natural gas CCS No capt. Sites > 1 Mton CO2/year Sites > 200 kton CO2 /year NOTE: Assuming all regions of the world perform a similar effort SOURCE : consultation Essenscia 59
Content Industry sector chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Olefins Ammonia & Hydrogen Electric processes Other ETS activities Other non-ets activities N2O emissions Resulting scenarios Most important barriers to decarbonisation 60
Other non-ets activities 3 trajectories influencing energy demand model growth prospects Belgium Possible growth scenarios European population: 1% GNP: 1,6% (1) This sector comprises high added value and low energy intensive activities Trajectory 1 Trajectory 2 Small and medium sized companies High growth assumption + 40% by 2050 Increased demand by construction sector Reference growth assumption + 20 % growth Trajectory 3-20 % by 2050 Low growth assumption SOURCE: (1) Federal Planning bureau 61
Small and medium energy efficiency Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implication for the use of olefins Significant effort requiring cultural change and/or important financial investments Maximum effort to reach results close to technical and physical constraints 10 % improvement by moderate changes 20 % improvement by using state of the art technology 30 % reduction by new plant design SOURCE: SERPECCC study 62
Small and medium sized companies Reduction potential of the different levers, on a 2050 horizon Reduction levers Lever Reduction potential (2050) in % 1 2 3 4 Cost Description Product mix Energy efficiency 10% 20% 30% Process improvements Fuel switching CCS NOTE: Assuming all regions of the world perform a similar effort SOURCE: consultation Essenscia 63
N2O emissions 3 trajectories influencing energy demand model growth prospects Belgium Possible growth scenarios European population: 1% GNP: 1,6% (1) These activities are related to the production of Nitric acid, Adipic acid, Caprolactam. Activities scenarios are consistent with Olefins and Ammonia production Trajectory 1 Trajectory 2 Small and medium sized companies High growth assumption + 20% by 2050 Increased demand by construction sector Reference growth assumption + 0 % growth Trajectory 3-50 % by 2050 Low growth assumption SOURCE: (1) Federal Planning bureau 64
N2O emissions process improvements Level 1 Level 2 Level 3 Level 4 Minimum effort Status quo Moderate effort Moderate changes that have no implications Additional Selective catalytic reduction (SCR) on all nitric acid, adipic acid and caprolactam production plants Global 80 % reduction in N2O Significant effort requiring cultural change and/or important financial investments Improved control on SCR Global 90 % reduction on N2O Maximum effort to reach results close to technical and physical constraints Improved catalysts on SCR : 95 % reduction of N2O emissions SOURCE: SERPECCC study 65
Reduction potential: CCS (1/2) Industrial costs USD/tCO 2 e SOURCE: IEA 66
Content Industry sector - chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Resulting scenarios Most important barriers to decarbonisation 67
Reduction potential Emissions according to different trajectories Trajectory 1 (high growth) GHG emissions for different ambition levels (MtonCO 2 e) 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 1 2 3 4 +21% -26% -43% -76% 2010 2015 2020 2025 2030 2035 2040 2045 2050 SOURCE: OPE²RA model 68
Reduction potential Emissions according to different trajectories Trajectory 2 (medium growth) GHG emissions for different ambition levels (MtonCO 2 e) Delta 10-50,% 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 1 2 3 4 +0% -39% -54% -81% 2010 2015 2020 2025 2030 2035 2040 2045 2050 SOURCE: OPE²RA model 69
Reduction potential Emissions according to different trajectories Trajectory 3 (low growth), GHG emissions for different ambition levels (MtonCO 2 e) 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 2010 2015 2020 2025 2030 2035 2040 2045 1 2 3 4 2050 Delta 10-50,% -48% -68% -75% -89% SOURCE: OPE²RA model 70
Content Industry sector - chemicals Summary and references Context and historical trends Methodology Details of the ambition levels and costs per lever Resulting scenarios Most important barriers to decarbonisation 71
Thank you. Erik Laes 014 335909 erik.laes@vito.be Pieter Lodewijks 014 335926 pieter.lodewijks@vito.be Michel Cornet 0486 92 06 37 mc@climact.com