Hydrocarbons and Climate Change: Strategies for Reducing Carbon Footprint

Hydrocarbons include methane and carbon, which when in combustion release carbon dioxide; this is a strong greenhouse gas that retains heat within the earth’s atmosphere. The proliferation of CO2 leads to global warming and has numerous environmental effects these include changes in sea levels, unfavorable weather conditions, and disruption of the ecosystem. The figure below further represents the greenhouse gas emissions by economic sectors in the United States:

Figure 1:  Greenhouse Gas Emissions by Economic Sectors in United States, 2022

Source: United States Environmental Protection Agency

While the world today faces the challenge of climatic change, there is an increasing need to explore ways of reducing the carbon emissions associated with the use of hydrocarbon. In this article, we delve into the complex relationship between hydrocarbons and climate change, evaluate the current position, and provide practical solutions to this major environmental problem.

The Complex Relationship Between Hydrocarbons and Climate Change

The global uptake of hydrocarbons, which are mostly derived from fossil fuels including coal, oil, and natural gas, remain the key energy providers for transport, power, heating, and the production processes. The release of CO2 agitates the greenhouse and has many impacts on the surroundings.

To curb this, the probe of the DOE into the SAF Grand Challenge, which kickstarted in spring 2023, is exemplified by the Clean Fuels & Products Shot to provide an elaborated approach to defossilising chemical inputs. The new effort is to focus on the cross-cutting needs in the generation and utilization of sustainable carbon sources and the technologies for their conversion to fuel and chemical products. The initiative is to ensure that 50% of the growth in hydrocarbon chemical demand is met from renewable resources; forestry and agricultural residues, municipal solid waste and recycled materials; captured carbon and hydrocarbon feedstock; new energy crops and algae.

Also, TotalEnergies and Air Products inked a memorandum for 15 years with a delivery of 70,000 tonnes of green hydrogen to the European market by 2030. This first long-term agreement came after TotalEnergies launched a request for tender for the supply of 500,000 tonnes of green hydrogen yearly to accommodate the firm’s European refining complexes.

However, the world has for many years been so dependent on hydrocarbons, especially concerning energy that, changing such a scenario poses many challenges. Since hydrocarbon-based energy systems comprise a large and complex structure the cost involved in setting up new technologies and renewable energy is enormous and requires more cash and legislative support. Furthermore, the economic consequences of lowering hydrocarbon usage are significant, as many sectors and communities rely significantly on these fuels.

The Current State of Affairs: Global Efforts to Address Climate Change.

The process of decarbonization became a focus after the announcement of the Paris Climate Accord in 2015. The United Nations Framework Convention on Climate Change COP21 in association with the Paris Agreement of 2015 committed member nations to reduce carbon emissions for global warming not to cross the 2-degree Celsius mark above pre-industrial level – or aiming for net-zero emissions by mid of this century. To meet such a goal, governments are acting fast and cutting greenhouse gas (GHG) emissions to attain net-zero emissions in the coming three decades.

Governments, organizations, and people have all taken initiatives to minimize their carbon footprints, including investments in renewable energy, energy efficiency, and sustainable mobility. The concept of decarbonization encourages innovation in technology for the idea of renewable energy, its storage, and the capture of carbon. For instance, the COP28 Presidency and the Kingdom of Saudi Arabia launched the Oil and Gas Decarbonisation Charter (OGDC) a worldwide industry charter to accelerate the Climate Ambition up to the scale of large impact in the oil and gas industries which was signed in December 2023, it’s an industry charter. Besides, by December 2023, 36 countries created the Climate Club, a political body focused on elevating the speed of industrial transformation. The forum has its Interim Secretariat in the International Energy Agency in collaboration with the Organisation for Economic Cooperation and Development (OECD).

Despite these efforts, the world remains significantly reliant on hydrocarbons. The need for fossil fuels remains high, especially in developing nations with rapid economic expansion. The problem is to strike a balance between energy demand and the requirement to minimize greenhouse gas emissions.

Strategies to Reduce the Carbon Footprint of Hydrocarbons

While making a complete shift away from hydrocarbons may take time, numerous techniques may be adopted to lessen their carbon footprint:

1. Energy Efficiency:

• Improving energy efficiency in buildings and industries: Energy efficiency reduction in buildings and industry is a key component in overall CO2 emission reduction. With improved energy efficiency in these sectors, the amounts of greenhouse gases emitted can be reduced and start overpowering the impact of global climate change.
• Promoting energy-efficient transportation: Promoting the use of mini electric cars, hybrid automobiles, buses, and trains. For instance, as per the PIB, number of electric vehicles registered was 14,33,545 in 2023, up from 10,25,118 electric vehicles in 2022.
• Optimizing industrial processes: Saving energy by adopting better ways of doing things. Energy efficiency improvements could reduce not just CO2 emissions but the EU’s annual energy import bill of €330bn as well. The targets approved in the Parliament in July 2023 require a common reduction of energy consumption by at least 11%. Therefore, an indicative target of 7% at the EU level by 2030.

2. Renewable Energy Integration:

• Increasing investments in renewable energy sources: Increasing the usage of power from sun, wind, water, geothermal, wind, and biomass sources. As per the IEA, clean power outlay rose by 24% for the 2021-2023 fiscal year compared to the 15% growth in fossil energy expenses during the same timespan mostly in renewables and electric cars. But, as the figure above points out more than 90% of this increase emanates from industrialized countries and China; indicating that unless clean energy transitions are upscaled in other parts of the world, new fault lines in global energy could emerge.
• Developing smart grids: Connecting renewable energy sources to the prevailing power grid as a way of enhancing the availability and efficiency of energy provision. For instance, DST, in collaboration with the Research Councils United Kingdom (RCUK), led by the Engineering and Physical Sciences Research Council (EPSRC), aims to strengthen collaboration between UK and Indian research institutions. Smart Energy Grids and Energy Systems have been highlighted as important elements of significance in helping to address the question of how future energy requirements are to be met.
• Promoting energy storage technologies: Energy storage systems are important for managing renewable energy systems and reducing the overall carbon emissions of the energy systems. Energy storage systems help in leveling the supply and demand; enhance control of the grid and reduce the dependence on the fossil by storing the excess energy produced during high generation and providing it to the customer during a low demand or high demand.

3. Carbon Capture and Storage (CCS):

• Deploying CCS technologies: Extraction of emissions of carbon dioxide from industries and power stations and the disposal of the gas in underground cavities. Following this, the IEA concluded that the global emissions of carbon dioxide (CO2) associated with energy consumption and industrial production in 2020 reached 34.03 gigatonnes of CO2 with consideration of the pollution that occurs both within and outside the territorial boundaries. This increased in the following years, but as of 2022, the total only reached 36.8 Gt CO2 and established a new emissions index, which is currently at 8.1%.
• Exploring geological storage options: Identifying and developing suitable geological formations for long-term CO2 storage. CCUS implementation has historically lagged behind projections, although momentum has accelerated in recent years, with over 700 projects in various stages of development across the CCUS value chain. In 2023, announced capture capacity for 2030 grew by 35%, while storage capacity climbed by 70%. This takes the total quantity of CO2 that might be gathered in 2030 to over 435 million tonnes (Mt) per year, with an announced storage capacity of around 615 Mt per year.
• Addressing technical and economic challenges: Overcoming the technical and economic barriers associated with CCS implementation. Government incentives, subsidies, and support have an impact on companies encouraging them to invest in CCUS projects. This results in the employment of optimum and cheaper approaches to achieve the intended goals. Moreover, in April 2023 the UK Government announced £20 billion to fund CCUS technologies under its Net-zero plan. Also in March 2023, United Airlines made a $5,000,000 investment in a technology firm Svante which is involved in the development of a carbon capture technology.

4. Sustainable Transportation:

• Encouraging electric vehicle adoption: Promoting the use of electrical vehicles by offering incentives and underwriting the structures for them. In line with this, the Dubai Water and Electricity Authority (DEWA) stated a figure of 7,331 electric vehicles in Dubai in 2023 and forecasted it to rise to 12,852 by 2025. This goes in conformity with Dubai’s Green Mobility Strategy 2030 which has set a guideline that by 2030; 10% of new vehicles and 30% of the public fleet vehicles must be electric or hybrids.

Figure 2:  Electric Vehicle Operating in Dubai, 2023-2025

Source: International Trade Administration

Also, the increase in the manufacturing of electric vehicles more or less has facilitated sustainable transportation. For instance, in the financial year 2024, what was viewed as an emerging player, GFCL EV Products Ltd.—a wholly owned subsidiary of Gujarat Fluorochemicals Ltd. (GFL) launched an ambitious INR 6000 crore investment plan in the next 4-5 years. This investment is required for the generation of 200 GWh for EV and ESS battery systems annually.

• Investing in public transportation: Increasing and enhancing the accessibility of public facilities and thus decreasing the consumption of automobiles by the public. The Indian government in the Union Budget 2021-22 envisaged funding for projects that would enhance the share of public transport in cities encompassing the extension of metro rail and bettering city bus services.

This includes an announcement of USD 2.42 billion (INR 180 billion) of foreign investment for a new PPP-run program of enhanced public bus service and the operation of more than 20,000 buses. The program is especially beneficial for the automotive industry, and economic growth.

• Promoting sustainable modes of transport: Making an effort to foster people’s use of their feet, bicycles, and other means of transportation that generate little emissions. Furthermore, the Bipartisan Infrastructure Law funds EERE at the US Department of Energy for the sustainable transport and freight shipping infrastructure, including vehicle charging, the design of urban and communities, and roads and bridges.

5. Policy and Regulatory Measures:

• Implementation of carbon pricing mechanisms: The use of carbon taxes and emission trading schemes is being adopted to encourage organizations to adopt low-carbon practices. A $35 price of carbon per tonne would be most effective in driving down emissions in countries such as China, India, and South Africa, where coal is still extensively used. The levy would hike coal prices nearly threefold and pump prices of road fuels relatively slightly higher.
• Strengthening energy efficiency standards: Increasing the stringency of an efficiency standard for new buildings, their parts, or home appliances and means of transport. Energy efficiency guidelines for such products are set by the Department of Energy (DOE), and the list of such goods has grown to over sixty items. Congress granted permission for this undertaking, and DOE follows a four-step process to evaluate the existing standards and implement new ones. In this way, any given product page contains updated information, current standards and test processes, waivers and exceptions, exemptions, statutory authority, and history.
• Supporting research and development: Promoting clean power generation, efficient utilization, and innovation on clean technologies. Advanced Manufacturing Office’s (AMO) RD&D portfolio is directed at developing cost-effective, differentiated manufacturing practices and superior energy technologies applicable to diverse manufacturing industries, such as advanced electric machines and materials, and CHP. The office is further coordinating the build of the DOE National Network for Manufacturing Innovation institutes, which with the help of over 200 partners brought inventions that have changed the market.

Companies and their decarbonization strategies in 2023:

There are legal and customer requirements, competitive pressures, and expectations from investors that chemical businesses need to start exploring how they could eliminate or at least significantly reduce the carbon content in their processes. Some of them include energy-intensity process emissions and supply chain emissions. To address these challenges, companies are deploying strategies including energy efficiency, renewable energy, CCUS, electrification, circular economy, and Supply Chain Decarbonization.

• Dow took the ultimate investment call on the Fort Saskatchewan Path2Zero project. This project is an ethylene cracker and derivatives complex that will bring 100% net-zero to the world for the first time, it will also place 20% of the company’s global ethylene capacity on a decarbonization trajectory and boost polyethylene capacity by 15%.
• DuPont’s North American plants switched to Low-GWP Styrofoam™ Brand XPS Insulation to contain greenhouse emissions, thus enhancing the company’s decarbonization process.
• To prove its know-how and catalysts, LG Chem initiated the construction of the 1,000 t DRM pilot plant in the Daesan site, South Korea. DRM is a CCU appliance that sequesters carbon dioxide and methane emissions originating from plants generating petrochemicals.
• Sumitomo Chemical’s Ehime Works formed a new platform to construct a highly efficient mechanism for producing methanol from CO2 as the pilot plant construction work has reached its completion. This facility was constructed with the assistance of NEDO ‘s*1 Green Innovation (GI) fund. The company intends to finish the demonstration of this technology by 2028, begin commercial production with the new technique, and license the technology to other firms in the 2030s.

Chemical businesses that follow comparable steps can dramatically cut their greenhouse gas emissions and contribute to a more sustainable future.

Green Bonds for Financing Decarbonization:

In Europe, the European Union (EU) unfolded a stimulus package of over 750 billion euros for investment in sustainable technology including Li-ion batteries, green hydrogen generation and storage cells, and biorefining and recycling of plastics among others. Some of this money will be allocated to the chemical sector. At the corporate level, private corporations are investing resources in climate projects, notably BASF, Germany’s largest chemical company, which expects to invest up to 1 billion euros by 2025 to meet its 2021 climate objective. BASF further aims to donate an extra 2-3 billion euros by 2030.

Conclusion:

Hydrocarbons and climate change are intertwined, but not necessarily in the ways that people might think. Although hydrocarbons promote economic development, their continuous use is a severe threat to the environment. Hence, there is a need to accept a comprehensive strategy to curb emissions from hydrocarbons that will involve using energy efficiently, providing renewable energy resources, using carbon capture and storage technology, monitoring sustainable transports, and enacting powerful government policies.

By applying these methods, we can move towards a more sustainable energy future while mitigating the effects of climate change.