Editorial April 2022 Sustainability and the Economy 2022

Rajiv Parikh

18 May 2022

Achieving NET ZERO Greenhouse Gas emissions
We read about “achieving net zero greenhouse gas emissions” a lot these days in various articles online and in reports and from big multinational companies.

What is net zero greenhouse gas emissions?
Achieving net-zero emissions means that some greenhouse gases are still released, but these are offset by removing an equivalent amount of greenhouse gases from the atmosphere and storing it permanently in soil, plants, or materials

Is net zero carbon emissions possible?
According to the report, without a major acceleration in clean energy innovation, getting to net zero by 2050 will not be possible. In fact, the technologies on the market today will provide nearly all of the emissions reductions needed by 2030 to put the world on track for the 2050 goal.

What happens if we reach net zero emissions?
If emissions go to zero, these “carbon sinks” continue to take up some of the extra CO2 that was emitted in the past – quickly at first and then more slowly over time as they move toward a new equilibrium. This reduces the levels of CO2 in the atmosphere and, thus, the warming it causes.

What’s ahead in 2022?
As the chemical industry is moving towards the middle of 2022, strong demand for commodity and specialty chemicals continue to keep the prices strong throughout the year. Based on the global commodity markets the prices are rising and fear of inflation is increasing at a rapid rate. The war situation in Europe may or may not get escalated based on the moves done by the two European countries Finland and Sweden trying to join the NATO. Pressure is from the Russian side to prevent these neighboring countries from joining NATO. Things can be quite volatile based on every action taken by countries to counter the Russians. This in turn can cause to industry to face margin pressure amid raw material cost inflation, which is likely to remain high in the coming months.

To achieve net neutralization is a costly affair and all the above factors like increasing cost of raw materials, lower demands and inflation can cause this delay of sustainability and decarbonization.

Revolution
We see a revolution in the automobile and power sectors. The rise of electric vehicles will in turn cause a rise in energy demands but not from fossil fuels but from renewal energy sources like wind, solar and hydro which in turn is going to store this energy into batteries which in turn will affect the chemical industry. It’s a cycle, and this time the cycle is for good. There are several companies getting into the physics and chemistry of batteries to store energy and recycle these elements used for batteries. Several chemical companies are taking part in redesigning and creating tools and elements for use in renewable energy sector, including Tata Chemicals, Laxness and BASF to name a few. The cost of Lithium used in batteries is rising and has reached enormous high levels. There are other chemicals like Cobalt and Zinc and Manganese which are in high demand to power these batteries.

The chemical industry in 2022 is not immune to rising raw material and energy costs and supply chain challenges. The stress experienced by decision makers is hard to characterize as the issues are at the freight container levels at the ports and border delays and other labor shortages. Soaring oil prices also adds to the costs of moving the finished products. International coal prices are around five times their levels a year ago and power plants in China and India, the world’s two largest coal consumers, warned of very low stocks ahead of the winter season. The natural gas that comes to Germany from Russia a $ sanctioned country is also putting pressure on worlds energy prices. “Neither the shortage of materials nor the high energy costs are expected to improve soon”, German chemical industry association (VCI) president Christian Kullman warned in a statement on the energy prices. “These factors are weighing on the economy and will lead to a further cooling of chemical business in the coming winter.”

 

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