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The industrial energy transition is reshaping chemicals, refining, iron and steel, food and beverage, cement, pulp and paper, aluminum, glass, and mining industries.
Within the past year, there have been so many new project announcements related to reducing emissions and moving forward with the energy transition it is hard to keep track. At the 2024 forum in February, we heard from Andrew Obin, a research analyst from Bank of America. He described how shareholders are approving climate related proxies and the additional $2.4 trillion capex that is needed in the US over the next 5 years to meet net-zero targets.
Wade Maxwell from ExxonMobil described how the oil and gas industry is meeting society’s energy & product needs “AND” reducing emissions. He described how O&G has roles in Net-Zero, CCS, Clean Blue H2, methane emissions, and how APC and model predictive control can improve efficiency and reduce flaring. He also mentioned that AI is improving subsurface models, and predictive maintenance, and how their support for OPA is creating an open market for DCS control systems.
Industry is learning the best options to stay profitable and reduce emissions.
There is a mind-blowing assortment of investment opportunities and options on how each industry can chart a path forward. That was exactly the question that DOE speaker Katheryn Scott answered. Katheryn laid out a comprehensive set of technical options for each industry and sorted them by:
Immediately deployable and the economic value
In demonstration phase now
In the research and development phase
Katheryn described how ~27% of chemicals, ~14% of refining, and ~32% of cement emissions could be abated with net-positive levers. Several DOE liftoff reports are available for specific industries that describe the economics of the technology options specific for that industry. You can download these industry specific reports for free from the DOE website at Pathways to Commercial Liftoff.
The illustration below shows how DOE covers emissions reductions for a broad spectrum of industrial sectors.
For the first time, the ARC forum held a sustainability workshop. The workshop was sponsored by Siemens and included short presentations by ARC analysts from the Energy Transition and Industrial Sustainability team with additional support from the Supply Chain team. The topics discussed were:
Challenges of energy transition, from operations to supply chain.
Emerging regulatory issues.
Innovations in software.
Development of energy transition services.
The ARC forum is uniquely an industrial event with the latest innovations in process automation, data management, data communications, cybersecurity, and emerging technologies like artificial intelligence, machine learning, data security, control system reliability and openness. There was plenty of discussion on digital twins and how they connect managers, engineers, and operators in both process and discrete manufacturing industries.
The fundamentals of the energy transition are driven by the desire to manage the global average temperature that is impacted by the release of greenhouse gas emissions. In 2024, we reached 12 months of an average of 1.5 degrees Celsius above pre-industrial times, exceeding the Paris target. There is a worldwide consensus that we need to step up our emissions management and reductions.
During our sustainability workshop, our youngest analyst used a carrot and stick analogy to describe how various regulations and incentives are influencing industrial behavior and the speed at which utilities are shifting to low-carbon power. The Inflation Reduction Act alongside regional and state regulations is using both carrot and stick of regulations that offer various grants and tax credits to drive down emissions. The sustainability session covered the evolving US and European requirements for companies to report their emissions. Several speakers referenced the upcoming SEC Climate Disclosure Rule. The final rule, initially proposed in March 2022, will require public companies operating within the United States to disclose climate-related risks and opportunities in their registration statements and periodic reports. It will encompass information on greenhouse gas emissions, climate-related risks and impacts on their business, and their strategy for managing these risks. The final rule is expected to be released in April 2024. You might want to follow Gaven Simon’s regulation roundup discussion as it will surely cover this and other regulatory topics that will impact industrial suppliers and end users. You can read it at January 2024 Global Energy Regulation Round-Up.