Expert Statement: Rudolf Staudigl, Wacker Chemie
CO2-Neutral Chemical Industry - The Challenge of an Industry Transformation
Germany, as one of the major chemical manufacturing nations, has committed to achieve this goal by 2050. But companies need to translate this industry vision into their specific context.
System changes of the scale of CO2 neutrality for a whole industry sector require a new mindset. Major transformations command long lead times and require consistent and persistent follow-through. It is all but clear whether enough value is created to justify the huge investments and how new value generated is distributed among critical players and investors.
CHEManager asked executives and industry experts to share their opinions on this industry transformation, which is a multi-stakeholder challenge and comprises economical, technical, societal and political aspects. We proposed to discuss the following aspects:
- What is your strategy / timeline to become carbon neutral and what are the key challenges on the path to achieve this goal?
- What political / regulatory measures are needed to encourage companies to invest in carbon neutral technologies?
- What economical / societal benefits do you expect or hope for by decarbonizing your business?
- How do you plan to involve external stakeholders critical for achieving CO2 neutrality?
Rudolf Staudigl: The economic fallout of the coronavirus pandemic poses exceptional challenges to industry — and energy-intensive companies in particular. Transforming industry and putting it on a path toward climate neutrality while strengthening its ability to innovate and compete in today’s difficult economic climate will require new political tools.
Europe’s energy-intensive, basic-materials industry needs a stable industrial electricity price in order to compete on a level-playing field with Northwest China and other regions.
Otherwise, industrial processes and energy procurement cannot reach climate neutrality by 2050 without the loss of competitiveness and business.
For Germany, Wacker proposes that roughly 120 TWh per year should be made available on an annual basis to the energy-intensive industry at a maximum price currently set at 40 €/MWh. The price level however needs to be flexible, as the reference point for effective carbon leakage protection is never the absolute price of electricity, but always defined as the relative difference to that paid by international competitors. The typical international costs of generating electricity from coal could serve as an index, as could a mix of international industrial electricity prices from relevant competitor regions.
Domestic production of renewable electricity must at least double by 2030. The success of energy-intensive industry‘s transformation will depend on an ambitious expansion of renewable energy and power distribution grids. Renewable energy represents the backbone for climate protection in German and European industry.
Over the past few years, we have achieved substantial progress on both the political and technological front — from energy storage and electromobility to global climate agreements. The coronavirus pandemic is no reason to let down our guard with respect to climate change. It is instead a call to set the right course for the future now.