WASHINGTON (July 15, 2024) – The American Chemistry Council (ACC) is concerned that the draft Chemical Sector Guidance issued by the Science Based Targets Initiative (SBTi) does not advance the GHG reduction pathway for the chemical industry. The proposed target-setting guidance does not reflect real-world chemical industry complexities, and potentially undermines the innovative capabilities of the industry, ultimately reducing benefits to society.

Further, the current draft of SBTi’s Chemical Sector Guidance ignores the realities of the industry, relying on average emissions reduction percentages used across multiple industries, which are infeasible for the chemical industry to achieve without severely limiting or shutting down operations.

Due to its specificity and prescriptiveness, SBTi’s proposed Chemical Sector Guidance will discourage ACC members from setting targets. This is counter to SBTi’s aim to encourage industries to further reduce greenhouse gas emissions and will undermine U.S. advancements in lower emission technology adoption. A more realistic, flexible approach that reflects the range of operations and technologies within the chemical sector could help encourage more companies to participate.

In a letter to SBTi, ACC states the guidance should reflect the variety and complexity of the global chemical industry, for companies of all sizes, manufacturing a range of products and materials that help advance sustainability.

ACC is putting forth the following recommendations to SBTi:

• For primary chemicals, consider a sector-specific decarbonization approach based on emissions intensity and utilizing a cradle-to-gate approach. ACC members, along with other industry trade associations, such as Cefic, agree that a sectoral decarbonization approach may be more appropriate for primary chemicals (which include High Value Chemicals, ammonia, methanol and hydrogen) to enable companies to innovate and provide sufficient flexibility to pursue investments with the greatest potential impact to reduce GHG emissions.
  • A sector-specific decarbonization approach would be based upon a product’s carbon intensity, using a cradle-to-gate approach in which scopes 1 and 2, along with 3.1 and 3.3 (feedstock and raw material upstream) are integrated into one absolute reduction target. Combining the scopes into one reduction target will provide the necessary flexibility for ACC members to reduce GHG emissions by investing in technologies and efforts toward the largest impact emissions. Additionally, a cradle-to-gate approach is better aligned with chemical production, acknowledging the diversity and complexity of the industry, while maintaining science-based targets.
• Incorporate self-produced energy within the cradle-to-gate chemical sector pathway. ACC members support including self-generated electricity and steam (co-gen) in the chemical sector emissions reduction pathway. Reliability of energy supply is critical to the safe operation of chemical facilities and offers a significant opportunity for GHG emissions reduction.
• Allow a sector-specific pathway for “other chemicals,” in line with IEA’s net-zero modeling. SBTi’s divergence from International Energy Agency (IEA) guidance for “other chemicals” (specialty chemicals) will likely complicate adoption of SBTi guidance. SBTi proposes a cross-sector, default absolute emissions reduction rate of 4.2% per year for “other chemicals,” which is not practical or feasible for the wide range of products and processes in the “other chemicals” subsector. In diverging from IEA net-zero projections, SBTi’s guidance artificially reduces the chemical sector’s carbon budget by using a general model for the sector’s carbon budget that is not specific to the industry, making it an infeasible reduction pathway for the chemical industry. 
• Include relevant scope 3 targets in the sector-specific decarbonization approach.  SBTi’s draft guidance is overly complex and includes overlapping emissions targets for scope 3.1, which includes purchased chemicals and alternative feedstocks. Separate targets for value chain emissions are overly restrictive and dictate how chemical companies must achieve emissions reductions, instead of allowing companies the flexibility to determine the best investments to make to reduce emissions.

“ACC would like to work with SBTi on its Chemical Sector Guidance, and we hope they can address our concerns and incorporate our recommendations,” Toomey said. “Our member companies are working to reduce emissions. While the chemical industry is a hard-to-abate sector, ACC member companies are lowering GHG emissions within their operations through Responsible Care^®, the chemical industry’s environmental, health and safety performance initiative, as well as innovating the products and technologies that help enable other sectors to reduce their own emissions.”

“In developing the next version of its Chemical Sector Guidance, SBTi should consider that not all industries are the same,” Toomey continued. “ACC welcomes collaboration with SBTi to develop guidance that serves the interests of society to deliver the full range of products that are chemistry-based while lowering carbon emissions.”