Dow Chemical executives: hydrogen and CCS should be the focus of decarburization in North American chemical industry

Recently, Jim Fitlin, CEO of Dow Chemical, said that hydrogen and carbon capture and storage (CCS) are crucial for the comprehensive decarburization of North American chemical industry and other energy intensive industries. The company has deployed a zero carbon emission cracking device using hydrogen and CCS technology in Canada, and the US Inflation Reduction Act will also help the industry decarbonize. Feitlin believes that the current priority is to provide a basis for public opinion for the promotion of CCS technology.

Canada's zero carbon cracking unit is progressing smoothly

Fitlin introduced that Dow Chemical's zero carbon emission cracking unit project in Saskatchewan, Canada, will use hydrogen and CCS technologies. The project was announced in October 2021, with a downstream polyethylene production capacity of 1.65 million tons/year, and the preliminary preparation has begun. Feitlin said that in the first phase of the project, Dow Chemical will build a 1.8 million ton/year zero carbon emission cracking unit in its Saskatchewanburg plant in Canada, which is planned to be completed and put into operation in 2027; In the second stage, the existing 1.5 million t/a cracking unit in the plant will be transformed to achieve zero net carbon emissions of the whole plant by 2030. At present, the project is progressing smoothly.

Fitlin pointed out that there are several reasons for choosing Canada: First, Canada has abundant and cheap ethane raw materials; The second is the improvement of CCS infrastructure in Canada; The third is policy support. Canada's carbon market is relatively mature, and Dow Chemical can get a return from reducing carbon emissions.

As for the decision to choose hydrogen and CCS as the key to corporate decarburization, Feitlin said that Dow Chemical believed that without hydrogen and CCS, North American energy intensive industries could not achieve any net zero carbon emissions goal. Because in the process of transition to net zero carbon emissions, more energy intensive materials are needed.

US Inflation Reduction Act Helps Decarbonization

Fitlin said that the US Inflation Reduction Act was signed into law in August 2022, which will further promote the R&D and promotion of carbon capture infrastructure and pave the way for decarbonization in chemical and other industrial fields.

The US Inflation Reduction Act provides an important update to the 45Q tax credit. Fitlin believes that this tax policy will stimulate the application of CCS. According to the data of Gibson Dunn, an American law firm, the Inflation Reduction Act increases the 45Q tax credit of CCS for industrial purposes from $35 to $60 per ton, and the tax credit of CCS for geological storage from $50 to $85 per ton. "This is a great incentive for the CCS industry. The company will build CCS hubs and hydrogen infrastructure to achieve its goals," said Fitlin

Fitlin pointed out that as a large user of hydrogen, Dow Chemical will build hydrogen production units in its production base, but smaller chemical manufacturers and producers in other industries may need to use public hydrogen production and CCS centers. At present, Houston, Texas is striving to become a regional hydrogen production center in the United States. Fitlin pointed out that North American oil and gas producers are preparing to build these public hydrogen and CCS centers. In March this year, ExxonMobil announced that it planned to build a hydrogen production plant and CCS project at its production base in Bay City, Texas, and supported the Houston CCS Center across industries. The center can capture and store 50 million tons of carbon dioxide per year by 2030, and 100 million tons of carbon dioxide per year by 2040.

Feitlin said that Dow Chemical has also done a lot of work with the Chemical Commission of the United States to study the entire chemical industry in the United States. The company estimates that if six to eight hydrogen/CCS centers are built, the U.S. chemical industry can reduce carbon emissions by 85%. The funds and tax credits provided by the Inflation Reduction Act will help achieve the goal.

CCS is safe and reliable

Many environmental protection organizations in North America doubt the practicability and sustainability of CCS. The main criticism from environmental protection organizations is that CCS is an unproven technology that will only expand the production and use of fossil fuels and divert the government's investment in renewable energy. In this regard, Dow Chemical insists that CCS is safe and reliable.

Dow Chemical believes that hydrogen and CCS technologies are relatively mature at present, especially nuclear power cracking may take ten years or more to have an impact, which cannot meet the public demand. At this stage, more policies are needed to support hydrogen and CCS.

Feitlin said that Dow Chemical would replicate its zero carbon emission cracking unit in Canada in the United States and transform the existing cracking unit. If this technology can be replicated in the Gulf Coast region of the United States, the U.S. chemical industry will soon be able to achieve the goal of zero net emissions by 2050 or earlier.

He introduced that the latest cracking unit of Dow Chemical, the Texas 9 cracking unit located in Freeport, Texas, is the lowest carbon emission project in the Gulf Coast of Mexico. Dow Chemical said that even if hydrogen and CCS are not used, the carbon emissions of this unit are 60% lower than the average emissions of other Dow chemical cracking units. These data are sufficient to show the reliability of CCS technology to the public and eliminate the doubts of most of the public.