"Transform into a Solution Provider"... The Petrochemical Carbon Neutrality Solution

[Petrochemical Carbon Neutrality Dilemma]②

When wind turbines operate, the blades of the windmill are petrochemical products. The batteries, which are the engines of electric vehicles running on the road, are also made from petrochemical materials. The materials that make up artificial intelligence (AI) and robots are no different. Petrochemicals are an industry that forms the foundation of all industries and ranks second in carbon emissions. This creates a dilemma. At the ‘Future Strategy Forum on the Petrochemical Industry’ held on the 31st of last month, discussions continued on the petrochemical industry's solutions for carbon neutrality. Hosted by the 2050 Carbon Neutral Green Growth Committee and organized by the Korea Chamber of Commerce and Industry and the Korea Petrochemical Industry Association, the forum was attended by over 100 people from the government, industry, and academia.

Experts emphasize that companies and the government must work together in some way. Professor Lee Sang-jun of Seoul National University of Science and Technology said, “Carbon neutrality is about creating a new path, so it cannot be achieved by companies or the government alone.” He explained, “Even if companies develop new products with innovative technology, it is meaningless if no one buys them.” He also said, “The government should establish a certification system that allows consumers to know whether plastic water bottles are made from carbon-neutral materials or conventional petrochemical materials, creating a market where low-carbon products are favored.”

On the 31st of last month, Baek Jin-young, a partner at Boston Consulting Group (BCG), gave a presentation titled "Future Development Directions and Investment Strategies for the Petrochemical Industry" at the "Petrochemical Industry Future Strategy Forum" held at the Korea Chamber of Commerce and Industry. This event was hosted by the 2050 Carbon Neutral Green Growth Committee and organized by the Korea Chamber of Commerce and Industry and the Korea Petrochemical Industry Association.
[Photo by Korea Chamber of Commerce and Industry]

Jimin Jung, Executive Director of BASF, the world’s largest chemical company based in Germany, said, “We input actual verified values into a digital system, not industry standards or benchmark numbers, to calculate every process from resource extraction to factory production and shipment,” adding, “Through this, we can transparently provide product carbon footprint information to our customers.” Jung emphasized, “When companies embark on sustainable technological innovation, the key is whether it can be commercialized,” and added, “For companies to maintain a circular economy proportional to their efforts, a well-established domestic system is essential.”

Baek Jin-young, Partner at Boston Consulting Group, said, “Unlike in the past, decarbonization regulations are now appearing in a macro and uniform manner,” and “Petrochemical companies face the challenge of not only competing in naphtha but also in recycling waste plastics and bio-based raw materials.” He continued, “Competitiveness is directly linked to securing plastic waste resources,” and “The extent of government support and cooperation is becoming increasingly important.”

There was also advice that companies should transform from simple manufacturers to providers of material solutions to differentiate themselves. Partner Baek said, “As new technologies emerge, customized small-scale production for customers will increase, and the petrochemical industry will also become solution-oriented,” adding, “Solutions include not only chemical technology but also product usage technology.” For example, not only the product but also mechanical technology related to painting methods and associated big data will be provided together. Baek said, “Global petrochemical companies are very good at marketing solutions,” and “Marketing through synergy with B2B customers is also necessary for Korean companies.”

Kim Gyo-hyun, Vice Chairman and CEO of Lotte Chemical, participating in the 'Waste Plastic Collection Campaign' at Lotte World Tower in Jamsil, Seoul. Photo by Lotte Chemical.

Experts advised that an integrative approach is essential. Professor Lee said, “The petrochemical industry requires technological innovation in various areas and cannot do it independently,” and “We need to discover convergence projects linking energy and industry sectors such as low-carbon fuels, carbon capture and storage (CCS), and hydrogen.” Professor Park Eun-duk of Ajou University said, “After researching carbon-neutral industrial technologies for nine years through preliminary feasibility study projects, I thought it would be good if the Ministry of Environment and the Ministry of Trade, Industry and Energy had a closer cooperative system,” and “In the industrial sector, we could also consider developing core carbon-neutral technologies by linking the steel and petrochemical industries.”

There was also an opinion that carbon emission thresholds should be set. Kim Ki-dong, Executive Director at Deloitte Consulting, said, “Europe measures the carbon footprint for each petrochemical product, but Korea does not have carbon emission thresholds.” Kim said, “Hyundai Motor must meet the upper limit of carbon dioxide emissions per kilometer when exporting to Europe,” and “It is necessary to set a maximum carbon emission amount when producing 1 ton of ethylene in petrochemical products,” adding, “If the government implements a green label system so consumers can recognize low-carbon petrochemical products, the number of eco-friendly products could increase.”

On the 31st of last month, Woo Tae-hee, Executive Vice Chairman of the Korea Chamber of Commerce and Industry (eighth from the left), and Kim Sang-hyup, Chairman of the Carbon Neutral Green Growth Committee (ninth from the left), are taking a commemorative photo with key attendees.
[Photo by Korea Chamber of Commerce and Industry]