The chemical and plastics sectors are energy intensive industries.
Chemical and plastic companies are producing chemicals, materials and goods by extracting, processing, refining, transporting, storing, producing and distributing “stuff”. Each step uses energy and releases GHG (greenhouse gasses). GHG emissions contribute to global warming and climate change. And, there’s an increasing pressure on the corporate world to start reducing their GHG emissions
There are grosso modo two options to get companies to reduce their GHGs:
- Legislation – you force chemical companies to reduce their GHG by law ; or
- Self-regulation – you leave it up to the industry to take “voluntary” actions and commitments
Net Zero and Climate Neutrality
A gross-zero target would mean reducing all GHG emissions to zero. Let’s be realistic: this is impossible. So the concept of “net zero” and “offsetting” were introduced.
Net zero refers to achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere.
There are two different ways to achieving net zero: reducing existing emissions and actively removing greenhouse gases.
UN seems to be a driver in this Net Zero initiative
191 Parties signed the Paris Agreement and more than 150 Parties have submitted a new or updated national action plan (Nationally Determined Contributions (NDCs)) as required by the agreement.
Companies, cities and financial institutions and more than 130 countries have now set or are considering a target of reducing emissions to net zero by mid-century (Source – Net Zero Commitments).
A carbon credit is an instrument that represents ownership of one metric tonne of carbon dioxide equivalent that can be traded, sold, retired, etc.
To offset your emissions you must purchase the equivalent volume of carbon credits to compensate for them.
The payments you make to purchase these carbon credits (carbon finance) is what makes the emissions reductions projects which created them, financially viable and sustainable.
According to the carbon traders, the emission reduction has been independently audited to internationally agreed standards and certified by third parties.
Concrete examples include:
- Forestry and Conservation: planting new trees or protecting old trees; protecting eco-systems, wildlife, and social heritage.
- Renewable Energy: help to build or maintain chiefly solar, wind or hydro sites.
- Community project: introduce energy-efficient methods or technology to undeveloped communities.
- Waste-to-energy: capturing methane and converting it into electricity.
However, I’ve read other “offsetting” examples, including:
- Oceans (no Idea how they include oceans in their carbon offsetting but to be honest with you … I’m not sure I want to know)
- Artificial carbon sinks
The activity of selling and buying “carbon credits” is called “carbon trading”.
There’s not one but several carbon markets. Carbon credits that are bought and sold in one market might not be valid in another.
The term carbon trading is most often used to describe the compliance market that exists for carbon credits within a regulated scheme, such as the European Union Emissions Trading Scheme (EU ETS), California’s greenhouse gas scheme or the Regional Greenhouse Gas Initiative (RGGI) in the northeastern United States.
These mandatory schemes require businesses whose emissions exceed a defined threshold, or who operate in specific industry sectors such as fossil fuel-fired power plants, to obtain an allowance, or credit, for each tonne of carbon dioxide equivalent that they emit annually.
Participants may receive an initial allocation of carbon credits free of charge, or enter an auction to buy them.
Businesses who subsequently reduce their emissions can sell their excess carbon credits to other participants whose emissions have increased, thereby commoditizing carbon and creating a market.
Problems and Challenges
- Playing with words
It’s not always clear what they mean with “removing” and “offsetting”. Sometimes I get the impression that they mean “avoiding” in the best case and “greenwashing” in the worse case.
- Perverse Effect and Colonialism
“Rich” countries or companies can continue releasing GHG in the same ways as before if they pay others to do the effort of reducing GHGs. Technically speaking, polluters can continue polluting by buying their way out.
There’s a perverse effect: the beneficiaries (sellers) of carbon credits may become financially dependent of this system … and will have a stake or preference that the rich companies and organisations keep polluting.
Some people may argue that this may be a form colonialism because African countries release less CO2 than Western countries.
Carbon trading tends to monetise eco-systems.
Carbon storage in natural ecosystems is also temporary and reversible, for instance in the case of forest fires where carbon is released in the atmosphere.
- Human Rights
Offsets can result in violations of the rights of Indigenous and tribal peoples. Satisfying market demands for offsets will require access to huge expanses of land and forest, lands already occupied by Indigenous Peoples, peasants, and local communities. As such, Indigenous lands are increasingly targeted by forest offset project developers, creating pressure and division in Indigenous communities.
Agro-industrial farming relies on intensive agriculture and pollute more than small local farmers using sustainable agricultural methods.
Carbon offset programs give leverage to agro-industrial concerns. Corporations and large landowners are best-positioned to develop offset projects. Many small local farmers don’t know about the existence of this system. In addition, many small farmers in developing countries cannot read or write and become vulnerable to rogue traders.
Agro-industrial concerns and Intensive agriculture thrives on monocultural models (corn/soybean). The carbon trading promotes and supports an industrial / extractive model instead of a more traditional and ecologically regenerative agricultural model.
The Netflix documentary “Les Rois de l’Arnaque” (2021) describes and reveals the enormous VAT fraud on carbon emission quotas: € 1.6 billion stolen from the French State and a total of € 6 billion euros stolen in the EU. It’s not just a scam … it’s organised crime.
Chemical and Plastics Industry
Chemical and plastic companies are big polluters and are perceived as “bad” by most people. And let’s be honest about it: the chemical and plastic industries are not environmentally-friendly.
However, we need those chemicals and polymers to maintain our quality of life and lifestyle. We need to be honest with ourselves and pragmatic … there’s no way out of chemistry and plastics. Chemical and plastics companies are part of the game and it’s better so.
However, were I draw the line is when chemical and plastics industries …
- start to greenwash with terms such as net zero and climate neutral.
- powerful lobbies manage to play the European and US political Institutions around their fingers to influence legislation in their advantage in a disproportional way.
- commit an environmental crime intentionally to increase profit and don’t take responsibility for their actions.
- lecture you about biodiversity at conferences and events.
I would advise the chemical and plastics industry to drop the net zero and climate neutrality greenwashing and communicate honestly.
I would encourage governments to start taking their responsibilities by monitoring each and every single industrial facility on their territory and set an “individual” action plan for each and every industrial plant to reduce their environmental footprint.
I would advise the EU to stop investing in “green” projects that make no sense and use that money to develop technical and industrial solutions to help reduce the environmental footprint of the existing industrial park. Those solutions should be “leased” to the industry.
I felt inspired to write this article after reading the statement of Covestro aiming for climate neutrality. My first reaction was: this is greenwashing at the highest level.
Markus Steilleman who is the spokesperson of the plastics industry had already been caught doing serious greenwashing in the past (Covestro CEO Goes GreenWashing Wahnsinn)
There’s no such thing as climate neutral. Individuals cannot be climate neutral, so do you believe a chemical company can be?
Now is the time to tell the truth and drop the “BS”. It’s our last chance if we want to save our planet.
If you communicate honestly and identify the problems, it’s already 50 % of the solution. But if you lie, cheat and greenwash, it’s 0 % of the solution.