The whole view of the industry, under these lines:

The heart of the matter

According to Eryazici (2021), direct emissions — primarily from feedstock extraction, refinement, and raw material production — account for about 43% of the chemical industry’s total. Key sources include nitrogen oxide from nitric acid production and ammonia from hydrogen generation using coal or methane.

Looking at the chemical industry across four value chains — (i) raw materials (ammonia, nitric acid, methanol, olefins, aromatics, chlor-alkali, and sulfuric acid); (ii) intermediates (plastic resins and other chemicals); (iii) final products (supplied by brand owners); and (iv) feedstocks and fuels (emissions from the oil and gas sector connected to hydrocarbons and coal production) — nearly 50% of total emissions arise from raw material production. This includes both direct emissions and those from the heat and electricity used in that production.

On the other side, the chemical industry’s carbon use includes about 70% as feedstock and 30% as fuel, mainly from coal, petroleum, and gas. Other critical raw materials include nitrogen, sodium chloride, and sulfur for producing bulk chemicals like olefins, ammonia, methanol, and others.

Strategies to lower emissions across the chemical industry

1. Renewable energy

Renewable energy (RE) adoption could cut chemical industry GHG emissions by about 30%. Many processes could lower carbon intensity by switching to clean electricity. Chemical companies have long adopted RE through on-site facilities, PPAs, RECs, green tariffs, and hydropower. Major firms like Borealis, Evonik, BASF, and others actively implement various RE strategies.

2. Electrification of high-temperature processes

High-emission processes like steam cracking, steam methane reforming (SMR), and gasification are undergoing transformation:

Steam cracking (used to produce acetylene, butadiene, propylene, ethylene, and aromatics) traditionally burns gas. Companies like BASF, Linde, and SABIC have been testing since April 2024, large demo plants using electricity—either directly via coils or to generate heat. Coolbrook on its side offers a different method with its RotoDynamic Reactor™ and RotoDynamic Heater™, using an electric-driven gas flow to create heat up to 1,700 °C for demanding chemical processes.

Steam methane reforming (SMR) emits CO₂ during production of hydrogen, ammonia, and methanol. To deal with these emissions, companies like Topsoe and Aramco have developed electric-assisted SMR (eREACT) to reduce emissions by combining gas and electricity. Nu:Ionic’s Nu-X Smart Reformer uses various fuels plus electricity for lower gas use with a smaller footprint. Meanwhile, Tulum and Tecpetrol are piloting methane pyrolysis with an electric arc furnace to produce hydrogen and solid carbon.

The Holy Grail of hydrogen production is water electrolysis using renewable energy, which could replace SMR entirely. However, these systems need lots of energy, costly materials, and frequent maintenance, raising operational costs. Still, projects like OMV’s 10MW (1,500 tons hydrogen) in Austria and Sunfire with P2X Solutions’ 20MW plant in Finland are emerging.

Finally, gasification produces syngas from diverse carbon-based feedstocks like biomass, coal, municipal waste, and plastics, making it also popular along with pyrolysis, for chemical recycling. Emissions come from the partial combustion of the feedstock, and losses of CO₂ and methane. Lowering emissions focuses on renewable feedstocks and carbon capture. Cortus’ 6MW biomass gasification plant in Sweden is a notable example.

3. Alternative feedstocks

To reduce dependency on fossil feedstocks, the chemical industry is turning to biomass sources like agricultural waste, forestry residues, municipal solid waste, and dedicated crops. While diverse, these feedstocks face challenges in volume and availability. They’re processed through pyrolysis or gasification to produce low-carbon fuels and chemicals. For instance, UPM’s biorefinery in Finland, integrated with a paper mill, converts crude tall oil into 130,000 tons/year of renewable diesel and naphtha. Braskem in Brazil has produced bio-based ethylene from sugarcane ethanol since 2010.

Pyrolysis and gasification support a wide range of feedstocks — plastics, tires, municipal waste, textiles, sludge — and make up about 80% of chemical recycling input volume. While many other specialized technologies exist at varying maturity levels, including AI-designed enzymes for textiles, most still require significant scaling. These approaches help close material loops and recover value from waste.

4. Carbon Capture, Utilization and Storage (CCUS)

Carbon capture must scale up significantly to reduce emissions, with current global capacity at 50 Mt CO₂/year — needing a 20x increase by 2030, per the IEA[5]. Integration across the value chain is vital, as captured CO₂ can be reused in chemical production. For example, Woodside, with Linde and ExxonMobil, is building a low-carbon ammonia plant in Texas using gas and carbon capture. The company Air Products also captures CO₂ from its SMRs for enhanced oil recovery.

5. Energy and process efficiency

The chemical industry has consistently demonstrated efficiency gains. In 2024, for example, BASF made significant strides through energy management systems, reduced use of hydrogen and gas, improved heat integration, and greater recovery of waste heat[6]. Future steps include electric heat pumps, e-boilers, and steam drive electrification. While many strategies are well-established, BASF’s global rollout signals a broader industry-wide commitment shared by other major players as well.

6. Advanced digitalization (digitalization, predictive analytics, automation, AI)

AI, automation, and digitalization have accelerated efficiency efforts in the chemical industry. Combined with sensors and real-time data, they help optimize processes, reduce waste, and improve energy use. Tools like digital twins and integrated planning identify cost-saving and sustainability opportunities. While all major chemical companies have digital strategies, challenges remain in targeting investments effectively. The industry is advancing along this digital path at varying levels of maturity.

The GCC chemical industry’s path to net-zero

For the GCC countries, the path to Net Zero emissions presents both a strategic imperative and a growth opportunity. Historically dependent on fossil fuels, these nations are now positioning themselves at the forefront of clean energy innovation and climate action, recognizing the strategic importance of diversification and sustainability.

The GCC region’s economies have long been driven by hydrocarbon exports. However, with mounting pressure from international investors, climate accords, and shifting global markets, GCC governments have launched ambitious national visions and strategies aimed at reducing emissions and promoting clean energy.

Saudi Arabia, for instance, has announced its goal to achieve net-zero emissions by 2060, with interim targets including generating 50% of its electricity from renewable sources by 2030. Similarly, the UAE has committed to net-zero by 2050 — the first in the region to do so. Its Energy Strategy 2050 aims to increase the contribution of clean energy in its total energy mix to 50%, supported by major investments in solar power, such as the Mohammed bin Rashid Al Maktoum Solar Park.

Qatar and Oman have also announced climate action plans aligned with the Paris Agreement. Qatar’s National Climate Change Action Plan emphasizes energy efficiency and the decarbonization of its LNG operations. Oman’s Vision 2040 includes ambitious renewable energy goals and the development of a green hydrogen industry. Meanwhile, Bahrain and Kuwait are working to enhance their environmental regulatory frameworks and invest in sustainable infrastructure, though they face challenges in scaling up renewable energy production.

Chemical manufacturers in the GCC have developed their own carbon neutrality strategies to align with national goals. For e.g. SABIC’s Carbon Neutrality Roadmap aims to achieve net-zero emissions by 2050 with an interim target of reducing GHG emissions (Scope 1 & 2) by 20% by 2030 from the baseline of 2018. ADNOC aims to reach net-zero by 2045 and has developed their 2030 Sustainability Strategy as a roadmap to advance towards their targets. Key focus areas of companies include increasing energy efficiency, reducing operational emissions, increasing focus and investments across renewable energy, carbon capture as well as low-carbon alternate feedstocks (e.g. hydrogen, ammonia).

Despite these advances, the path to net-zero in the chemical industry is complex. High energy requirements, entrenched fossil-based infrastructure, and the need for significant capital investment pose real challenges. Moreover, achieving scalability in low-carbon technologies like CCUS or green hydrogen will require strong policy support, international partnerships, and market incentives.

Nevertheless, momentum is building. The chemical industry’s central role in global supply chains means that its sustainability efforts have ripple effects far beyond the region. With strategic investment, innovation, and collaboration, GCC chemical producers can become leaders in sustainable industrial development. The shift towards carbon neutrality is not just a regulatory requirement — it is a competitive imperative that could position the GCC as a global hub for low-carbon chemicals and materials.

By aligning industrial growth with environmental responsibility, the GCC chemical sector can be a key driver in the region’s broader journey to carbon neutrality by 2050.

References:

[1] IEA (2025), CO2 total emissions by region, 2000-2024, IEA, Paris https://www.iea.org/data-and-statistics/charts/co2-total-emissions-by-region-2000-2024, Licence: CC BY 4.0

[2] EDGAR – the emissions database for global atmospheric Research. (n.d.). https://edgar.jrc.ec.europa.eu/report_2024

[3] Frost & Sullivan, based on Eryazici, I., Ramesh, N., & Villa, C. (2021). Electrification of the chemical industry—materials innovations for a lower carbon future. MRS Bulletin, 46(12), 1197–1204. https://doi.org/10.1557/s43577-021-00243-9

[4] 2022 Facts and Figures of the European Chemical Industry. (2022, January 4). cefic.org. https://cefic.org/a-pillar-of-the-european-economy/facts-and-figures-of-the-european-chemical-industry/

[5] IEA (2023), Capacity of current and planned large-scale CO2 capture projects vs. the Net Zero Scenario, 2020-2030, IEA, Paris https://www.iea.org/data-and-statistics/charts/capacity-of-current-and-planned-large-scale-co2-capture-projects-vs-the-net-zero-scenario-2020-2030, Licence: CC BY 4.0

[6] BASF. (2025). BASF Report 2024. https://www.basf.com/dam/jcr:a0caf160-c019-40b1-a4ea-eaedb29b0685/basf/www/global/documents/en/investor-relations/calendar-and-publications/reports/2025/BASF_Report_2024.pdf