The European chemical sector has been exceptionally resilient despite the significant economic uncertainty and supply chain disruptions after the pandemic. This resilience has helped mitigate the repercussions of global crises such as the conflict in Ukraine and the resulting challenges with energy security. However, these adverse factors have inevitably influenced growth, reports by Anahita Khanlari, Marketing Director, AspenTech.

The European Chemical Industry Council (Cefic) reported a significant downturn in the EU27’s chemical production from January to September 2023, noting a 10.6% decrease. Additionally, the capacity utilisation rate within the EU27 chemical industry persisted in its decline, settling at 74.1% in the third quarter of 2023.

Despite adverse market conditions, the chemical sector remains committed to addressing the environmental ramifications of chemical manufacturing. The industry is prioritising reduction of emissions through the decarbonisation of operations and closure of the circularity loop. Although there are numerous strategies to curb emissions and foster a circular economy, the majority of proposed technologies have yet to be implemented on a large scale. European chemical firms, driven by a stringent regulatory environment and consumer activism, are at the forefront of innovating and adopting new technologies to tackle these environmental challenges.

Addressing market headwinds and environmental challenges

The chemical industry’s ability to navigate market uncertainties while delivering value and addressing environmental concerns hinges on agility. This flexibility is achieved through the adoption of innovative solutions and collaborative approaches to create new operational models. Digital solution providers play a pivotal role in accelerating technology development and shortening time-to-market. They help chemical manufacturers through providing efficient monitoring systems, collecting real-time data, intelligent process control, AI-driven analyses, and creating overall visibility across the entire value chain.

Reducing GHG Emissions through digitalisation

Improving energy efficiency and accurately monitoring emissions through carbon accounting represent the initial steps towards carbon neutrality in chemical manufacturing. Real-time monitoring to ensure optimal operational conditions can significantly reduce energy and maintenance costs. A comprehensive dashboard view of an operation’s carbon footprint offers invaluable insights for high-level decision-making, reporting, and mitigation efforts.

With financial incentives like Section 45Q of the IRA ACT in the US and similar global initiatives, CCS/CCUS projects have access to the much-needed financial support. Nonetheless, the technology requires further research to enhance CO2 capture efficiency and make direct air capture feasible. Use cases such as enhanced oil recovery or reservoir injection depend on geological expertise. Digital reservoir models can accurately assess the potential success of such CCUS projects.

Transitioning from fossil-based to biofeedstocks results in processes with lower CO2e impact. However, the cost of products produced from biobased feedstocks remain high for consumers, and investment in scaling these processes is often inconsistent influenced by the fluctuating fossil fuel prices. This is where digital solutions facilitate the rapid and precise scaling of these processes for a quicker market entry.

Digital Solutions to Design New Technologies

Digital solutions are a vital part of new technology development throughout the decarbonisation journey. Green hydrogen production, for example, necessitates membrane and electrode research based on digital models. In the realm of plastics circularity and advanced recycling, extensive modelling-based R&D is needed to design pyrolysis reactors and associated processes. Digital tools can expedite data validations and scaling of new technologies to bring them to market faster and at lower capital cost.

Enhanced digitalisation also has a central role to play in chemical supply chains. Transparency, efficiency, and structure are the vital underpinnings of success. Even though we have seen improvements since the end of the pandemic, supply chains are not fully optimised. Creating modern and resilient supply chains is an essential pillar of decarbonisation as renewable feedstocks come into play and regulations require transparency in raw materials supply to the end product.

Modern digital grid management relies on a distributed network of renewable electricity producers instead of a traditionally centralised power generation system. Through accurate forecasting and management, organisations can bring in renewable power, design appropriate storage capacities and predict their peak demand. Digital grid management solutions provide resiliency in any power intensive operation by accurately predicting supply and demand peaks.

Future outlook

As the chemical industry strives to lower carbon emissions while supplying hydrocarbons in product form to a growing population, executives must navigate a maze of new regulations, incentives, and innovative technologies. It is a difficult balancing act at times, but partnerships between technology companies and established producers are forging new business models. There is no debating that the industry must continue to drive forward to increased operational excellence to counter economic challenges and achieve greater sustainability. The implementation of sustainability measures to address environmental issues is the future for the industry. Digital solutions will undoubtedly be crucial drivers of sustainability as the chemical industry confronts these challenges.