Industries in Depth

This new collaboration will move the chemical sector closer to net zero. Here's how

A close up of the Periodic Table, illustrating the need for the decarbonizing of the chemical industry

'Decarbonizing chemicals is critical to the fight against climate change and collaboration is a powerful tool.' Image: Photo by Vedrana Filipović on Unsplash

Adam Rothman
Managing Director and Senior Partner, BCG
Charlie Tan
Chief Executive Officer, Global Impact Coalition
Jorgen Sandstrom
Head of Energy, Materials, Infrastructure Programme, Industrial Transformation, World Economic Forum
Our Impact
What's the World Economic Forum doing to accelerate action on Industries in Depth?
The Big Picture
Explore and monitor how Chemical and Advanced Materials is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Chemical and Advanced Materials

This article is part of: Centre for Energy and Materials
  • The Global Impact Coalition is a forum for collaboration and experimentation around low-carbon solutions.
  • Its remit is to forge partnerships, foster unconventional collaborations and spearhead solutions through tangible, on-the-ground projects that deliver CO2 reduction.
  • It's a great opportunity for joint commitments that will create stronger market perception and advance market commitments for carbon-transformed materials.

COP28 and the World Economic Forum’s 2024 Annual Meeting in Davos have been at the forefront of climate news of late, but there have also been exciting developments elsewhere.

One with high potential comes in the chemicals industry: with the formation of the Global Impact Coalition (GIC), a forum for collaboration and experimentation around low-carbon solutions. GIC has the potential to emerge as the platform for forging partnerships, fostering unconventional collaborations and spearheading solution development through tangible, on-the-ground projects that deliver CO2 reduction in future value cycles.

Decarbonizing chemicals is critical to the fight against climate change and collaboration is a powerful tool. The industry generates about 2% of global CO2 emissions, but it consumes 14% of all oil and 8% of all gas supply as feedstock and fuel and is, therefore, one of the largest consumers of fossil carbon supply for material use. It affects most other industries too, as more than 95% of all manufactured goods involve chemical products. The industry has been pursuing four paths to decarbonization: transformation to low-carbon products, circular products, all-natural materials and biodegradable materials.

Have you read?

CO2 to X

The GIC provides a valuable platform for exploring the synergies and opportunities arising from the integration of four distinct approaches. One such approach, carbon transformation (CO2 to X), revolves around the concept of synthesizing various chemicals from carbon dioxide, low-carbon hydrogen, and renewable resources, thereby replacing traditional fossil fuels and heat sources.

This strategy leverages and contributes to carbon capture and storage (CCS), which many companies already have as a key pillar of their sustainability programmes. In essence, it entails the transformation of carbon emissions into beneficial products, simultaneously fortifying companies' commitment to environmental responsibility.

CO2 to X is a complementary approach: the infrastructure for capturing and transporting CO2 creates economies of scale for CO2 as a feedstock. ExxonMobil and Mitsubishi Heavy Industries, for example, are partnering to use Mitsubishi’s CO2 capture technology as part of Exxon’s industrial end-to-end CCS solutions. Air Liquide, Fluxys Belgium and the Port of Antwerp-Bruges have been awarded €145 million from the EU for the Antwerp@C CO2 Export Hub, which will collect and transport CO2 via an intraport, open-access pipeline network.

CO2 transformation

CO2 transformation is in the early stages of building scale by moving from premium to lower-cost products. The technology attracted almost $700 million in venture capital funding in 2022. Venture funding has been growing at an annual rate of 47% since 2018, according to Pitchbook.

There is a growing list of successful ventures and partnerships. Covestro’s CO2-based chemical precursor, Cardyon, and Econic’s CO2-based production method for polyols are being used to make sustainable polyurethane foams. Evonik, in collaboration with multiple partners, has launched the PlasCO2 project, which aims to use CO2 as a raw material in the production of C4 chemicals. Twelve, a startup working with Daimler and Procter & Gamble to produce CO2-based products, recently announced a $130 million Series B funding round. And, Air Company, another startup, has been selling CO2-based vodka and fragrances, among other products.

Continued progress depends on companies, both startups and established players, finding the sweet spot of technology capability, deployment model, product positioning and market need. Broadly speaking, we expect adoption to follow an L-shaped curve, starting with high-margin products with low energy needs and spreading to more widely used molecules as costs come down and technologies mature. (See Exhibit 3 below.)

At least six technical pathways provide multiple options with potential for market development and carbon reduction. (See Exhibit 4. below). They are at different stages of maturity and each has its advantages and disadvantages and is useful for particular groups of products.

This is another place where a group like the GIC can have an outsized impact. By bringing together major industry players, startups that are pushing new technologies and downstream value chain partners, GIC can facilitate the scale-up of these novel decarbonization technologies. This kind of cooperation and partnership building is important because the chemicals industry is actually quite diverse, with petrochemicals producers in Europe, the Middle East and the US each pursuing its own decarbonization strategies. Specialty chemicals companies have their own concerns.

The inclusion of value chain partners will be critical. Converters and end users face their own decarbonization pressures and are demanding low- or no-carbon alternatives. Collaborations, such as GIC, are a great opportunity for joint commitments of upstream investment and downstream volume offtake that can create stronger market perception and advance market commitments for carbon-transformed materials.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Industries in DepthNature and Biodiversity
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.


Top 5 countries leading the sustainable tourism sector

Robin Pomeroy and Linda Lacina

April 29, 2024

About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum