Global Chemical Industry announces findings of

Greenhouse gas emissions savings enabled by chemical industry are more than

double industry emissions, with abatement potential of more than ‘4 to 1’ by 2030

Rome, Italy, 7 July 2009 – The International Council of Chemical Associations (ICCA) announced the findings of an independent carbon life cycle study conducted by McKinsey & Company (a global management consulting firm) on the global chemical industry’s impact on greenhouse gas emissions. The announcement was made in connection with the Major Economies Forum on Energy and Climate meeting in Rome. The report will next be launched via regional events in the United States (9 July, Washington, DC) and Japan (10 July, Tokyo). The chemical industry is the first global industry to embark on such an initiative.

The study calculated the chemical industry’s impact on emissions then assessed how the impact would change under two scenarios, a “business-as-usual (BAU) scenario” and “abatement scenario”, which assumed aggressive implementation of measures leading to a low-carbon economy. This was accomplished through the analysis of greenhouse gas (GHG) emissions linked to the chemical industry from feedstock and fuels extraction, through production to disposal, representing life cycle emissions of CO2e (carbon dioxide equivalent) over the life cycle of the product. The CO2e Life Cycle Analyses cLCAs were performed for over 100 individual chemical product applications and spanned major relevant products and sectors of the chemical industry, covering a representative portion of the CO2e emissions associated with the chemical industry. 2030 modeling scenarios extrapolated how emissions for both production and use phases may develop.

The McKinsey study, which was critically reviewed by the Öko Institut, a leading independent environmental research and consulting institution in Europe, found that for every unit of GHG emitted directly and indirectly by the chemical industry, the industry enabled more than two units of emission savings via the products and technologies provided to other industries and consumers. The study also found that by 2030, the ratio of GHG emission savings to emissions could increase to more than ‘4 to 1’, provided certain actions by industry, stakeholders and policymakers, including 1) globally consistent regulation and initiatives that serve as incentives to reduce industry’s CO2e emissions, and 2) regulation to increase the use of products and applications with a positive abatement effect.

ICCA President Christian Jourquin, CEO of Solvay, said “This study highlights the vital role of

the chemical industry as enabler of solutions to decarbonise the global economy by making

products that save energy and create a net emission reduction along the chemical value chain.”

The cLCAs showed that the most significant emissions savings by volume came from insulation materials in the building sector, the use of chemicals in agriculture, and advanced lighting solutions. This included materials such as expanded polystyrene, extruded polystyrene or polyurethane, agrochemicals, lighting, plastic packaging, marine antifouling coatings, synthetic textiles, automotive plastics, low-temperature detergents, engine efficiency, and plastics used in piping.

Alain Perroy, ICCA Council Secretary, said “The McKinsey 2030 scenarios show that the

chemical industry has substantial potential to help the world further reduce greenhouse gas

emissions, both through greenhouse gas emissions savings in its own production and through

its products. If industry, policymakers and other stakeholders take steps to facilitate emissions

reductions and fully utilize chemical products, the study suggests the ratio of emissions savings

to emissions could increase to more than ‘4 to 1’ by 2030.”

The report reconfirmed the necessity of taking a global approach to addressing climate change and demonstrated the value of integrating life cycle thinking into future policy work. The following guiding principles were recommended toward achieving a low-carbon economy:

Develop a global carbon framework to accelerate GHG reductions, avoid market distortions and minimize carbon leakage through adopting and developing harmonized global policies;
Focus on the largest most effective and lowest cost abatement opportunities by focusing on scale, cost and implementation speed;
Push for energy efficiency by giving support to products and applications that offer greater energy and resource efficiency;
Support the development and implementation of new technologies;
Support the most efficient and sustainable use of feedstocks and energy;
Provide incentives for faster action by rewarding early movers that proactively reduce their CO2e footprint;
Push for the most efficient and sustainable disposal, recovery and recycling of a product;