Climate mitigation will come at a cost for chemical firms
In a Net Zero climate mitigation scenario, we find that $570bn will be wiped off the global chemicals market by 2050, relative to a stated policy baseline. This is equivalent to 8% of total production.
What you will learn:
- Our new Industry Climate Service (ICS) assesses the implications of climate change and associated mitigation policies at the industry level. In climate mitigation scenarios, we find that chemical production is amongst the most negatively impacted sectors within manufacturing.
- As the price of carbon intensive inputs to production increases, sectoral competitiveness is disproportionately impacted, both domestically and internationally. This is due to firms’ reliance on carbon intensive inputs, which comes from two pivotal sources. Firstly, production is often energy intensive, with controlled high temperatures crucial to production of many chemicals. Secondly, raw materials used as feedstock in the sector are often oil or gas.
- Comparisons between countries’ chemical sectors are largely determined by the relative fossil fuel intensity of the energy mix. In North America, chemicals production sits nearly 14% below baseline by 2050 in our Net Zero scenario. The hit to output in Europe is less severe at 7%.
Industry Climate Service
Assess the impact climate change will have on all facets of your business. Now and in the future.Find Out More
Quantifying the impact of policy changes and other risk events on industrial sectors.Find Out More
Industry and Product Market Forecasting
Oxford Economics helps you translate what the broader questions around key economic and sector trends, risk, technology disruptors, as well as policy and regulatory changes mean for your organisation. Our models and forecast datasets can be customised to fit your unique needs, helping you quantify key correlations for sales and market demand forecasting and more generally support your overall decision-making process.Find Out More