Chain Reaction: Decarbonizing the DNA of Modern Life
To make the building blocks of chemicals and plastics, crude oil, natural gas, and coal are transformed through the energy-intensive processes of catalytic reforming, steam cracking, and steam methane reforming. The raw materials for plastics are aromatics and olefins. Methanol can be converted into olefins, and is also used in adhesives, paints, solvents, and car parts. Ammonia is used in fertilizer, refrigeration, and production of various chemicals.
Using IPCC and GCAM data, Energy Innovation projected future “greenhouse gas emissions at stake” in 2050, assuming current policies remain in place. The resulting estimates overlap because different technologies may reduce the same emissions pool.
Plastics have become one of our planet’s most high-profile villains. They’re everywhere, in seemingly everything. Chemicals are too — but unlike plastics, they’re hiding in plain sight. The invisible building blocks of the modern economy, chemicals touch 96% of all manufactured goods. Unfortunately, that ubiquity comes with a heavy emissions burden, and decarbonizing chemicals is especially tricky. Not only is production incredibly energy-intensive; it also relies on fossil fuels as a direct feedstock. The emissions problem is highly concentrated in a handful of core molecules. But that concentration is also an opportunity: reinventing how we make these core chemicals could start a ripple effect that cleans up supply chains across almost every product on Earth.
The Path We’re On
Invisible Ubiquity
The Problems With Plastics
Plastic pollution grabs headlines — bottles in oceans, bags on beaches, and a recycling rate stuck in the single digits. But from a climate perspective the biggest issues with plastics actually happen upstream.
Roughly 90% of lifecycle emissions come from extracting fossil feedstocks, refining oil and gas, and powering energy-intensive processes like steam cracking and polymerization. A much smaller share comes from end-of-life treatment such as incineration. That means the core climate challenge of plastics is not only what they’re made of — but how much fossil energy it takes to make them in the first place.
Bottom line? Plastic waste is visible. Plastic emissions are not. The most effective way to address both is to drastically reduce demand by collectively consuming less plastic. But modern economies — from food and healthcare to logistics and manufacturing — are deeply dependent on plastic. In fact, plastic use is projected to triple by 2060, locking in more upstream emissions.
Decarbonizing plastic production is our next best option.
Plastics are only part of the story — they’re one part of a much larger chemical system.
When we talk about decarbonizing the chemical industry, we’re referring to a handful of chemicals: ammonia, methanol, the light olefins (ethylene and propylene), and the BTX aromatics (benzene, toluene, and xylene). These are the heavy hitters of the chemical world — essential to modern life. Ammonia is a core ingredient in fertilizers used to grow our food. Ethylene and propylene are critical inputs to the plastics in product packaging. BTX aromatics are used to make synthetic fibers, dyes, and other ingredients found in clothes, textiles, and a wide range of consumer products. These primary chemicals are also heavy hitters when it comes to emissions: they’re responsible for 65% of the industry’s climate footprint. Of those emissions, an overwhelming majority are tied directly to fossil feedstocks and fossil energy inputs — primarily natural gas and oil used as raw materials and process fuel.
And demand for these core chemicals is only rising. Some projections suggest that by 2050, fossil-based feedstocks for chemicals could account for nearly half of the global demand for oil and gas, continuing the cycle of fossil fuel extraction and refinement.
A New Way Forward
Tiny molecules, tremendous impact
The good news: because so much of the chemical industry’s climate impact is concentrated in a small set of core molecules and processes, we know exactly where innovation can have the biggest leverage. The imperatives and moonshots below focus on the highest-impact pathways to decarbonize chemicals and plastics — by rethinking how these molecules are made, not just what they’re made from.
Innovation Imperatives
Decarbonize the production of core chemicals by reinventing reaction pathways, catalysts, and process energy
Today’s chemical production is emissions-intensive not only because it uses fossil feedstocks, but because it relies on high-heat, fossil-powered processes and chemical reactions that release CO₂. Decarbonising these systems requires more than simply electrifying generic heat demand; in many cases, it means redesigning reaction pathways and the thermal processes that enable them. The highest-impact opportunity is to redesign how we make the sector’s core molecules — ammonia, methanol, olefins, and aromatics — using fundamentally different reaction pathways and catalytic systems that eliminate combustion heat, avoid inherent process CO₂ emissions, and run on clean energy. Feedstock shifts can play an important supporting role — especially when paired with circular end-of-life systems — but the core climate objective is zero-emissions production at commodity scale.
Replace energy-intensive distillation and refining in chemical processing with lower-energy separation technologies
Distillation is the workhorse of chemical processing. It separates components of a liquid mixture by heating them to selectively vaporize and then re-condense them based on their different boiling points. Newer methods (like membranes, filters, and special solvents) can separate chemicals just as well, but with much less heat and energy. If these technologies are improved, they could cut energy use and emissions across the chemical industry, while also saving money and making production more efficient.
Scale affordable green and blue hydrogen production for commodity chemical manufacturing
Hydrogen is not itself a building-block chemical, but it is a crucial input to several of them — including ammonia and methanol. That’s why low-carbon hydrogen is essential to breaking the sector’s dependence on fossil-derived inputs and enabling lower-carbon chemistry — not to mention the added benefit of supporting decarbonization well beyond the chemicals industry. While hydrogen itself is a secondary greenhouse gas and leakage must be minimized as production scales, the dominant constraint is cost. Green and blue hydrogen remain significantly more expensive than conventional fossil-based production. Breakthroughs in electrolyzer cost and durability, carbon capture performance, and system integration are essential to reach cost parity at commodity scale.
Develop polymers, additives, and recycling processes that make circular plastics cheaper and lower-emissions than virgin production
Most plastics are technically recyclable but only 9% are actually recycled, locking in a linear system with high upstream emissions, persistent waste, and ongoing demand for virgin petrochemicals. Recycling is often more costly, more energy-intensive, or yields lower-quality material than producing new plastic from fossil feedstocks. Enabling true circularity requires innovative approaches that make plastics easier to separate, depolymerize, and remanufacture, alongside recycling technologies that can handle mixed and contaminated streams. And the end product matters — it must perform as well as or better than virgin plastic and deliver lifecycle emissions reductions at competitive costs. If lower-carbon recycled plastics can reliably compete on cost, quality, and scale, they can displace new fossil-based production and break the link between plastic demand and upstream emissions.
Design polymers that are inherently lower-emissions and less fossil-dependent
Today’s dominant plastics were engineered for cost, durability, and performance — not climate compatibility. Many rely on fossil-derived carbon and are difficult to manage at end of life. This imperative calls for rethinking polymer chemistry itself: developing materials from low-carbon or non-fossil feedstocks (including producing the same plastics from different carbon sources), reducing embodied emissions during production, and designing safer end-of-life pathways — all without sacrificing functionality. But replacing fossil-derived plastics with alternatives is not automatically a climate win; in fact, it’s often a net climate loss. To meaningfully reduce emissions, next-generation plastics must meet strict lifecycle criteria: they must require less energy to produce than conventional plastics; avoid triggering land-use change or methane emissions at end of life; and scale without demanding vast new agricultural inputs. Simply shifting the carbon source is not enough. The full system must emit less.
Moonshots
Scale discovery, stimulation, and extraction of natural hydrogen
Imagine if the Earth is naturally producing a vast untapped supply of clean fuel, just waiting to be discovered. This moonshot invites innovators to explore whether geologic hydrogen does, in fact, exist in extractable formations, and at high enough concentrations to be economically viable. The undertaking here is not just to find and tap into these massive underground deposits, but to potentially speed up and emulate the natural reactions that generate them. This requires pioneering a new era of geological exploration and responsible extraction technologies. The challenge may even extend to converting the hydrogen into more stable carriers (like ammonia) to simplify transport. This breakthrough could unlock a powerful new source of clean energy, fundamentally changing our energy landscape.
Manufacture core molecules directly from electricity, water, air, and waste CO₂
What if we could bypass today’s high-heat, multi-step thermochemical processes altogether? This moonshot envisions directly producing foundational chemicals — such as ammonia, olefins, aromatics, and other intermediates — through electrochemical pathways powered entirely by clean electricity. Rather than generating hydrogen and relying on high-temperature thermochemical reactors, advanced catalysts and reactor designs would synthesize target molecules in fewer steps, at lower temperatures, and with minimal process emissions. Achieving industrial-scale selectivity, durability, and energy efficiency would fundamentally electrify the chemical industry — replacing combustion-driven chemistry with precision electrochemical manufacturing.
Discover radically more efficient reaction pathways for commodity chemicals
The chemistry underlying ammonia, methanol, hydrogen, and hydrocarbon production has remained largely unchanged for decades. This moonshot calls for discovering entirely new catalysts and reaction mechanisms that dramatically reduce energy requirements, eliminate process CO₂ emissions, and operate under milder conditions. Alternative pathways — such as methane pyrolysis, which produces hydrogen and a solid carbon byproduct instead of CO₂ — illustrate how rethinking reaction chemistry itself could unlock lower-emissions production with valuable co-products. Breakthroughs in catalysis could transform commodity chemical manufacturing from one of the world’s most heat-intensive industries into a far leaner, lower-emissions system.
The most viable solutions will:
Because carbon is embedded in many chemical products themselves — not just emitted during production — viable solutions must address both feedstock and process emissions across the full lifecycle. This requires sourcing carbon from pathways that are demonstrably low- or net-zero at scale — without triggering land-use change or other unintended emissions — and ensuring that feedstocks themselves are produced and converted using low-emissions energy. In other words, simply shifting the carbon source is not sufficient.
For many chemicals, winning solutions will need to produce the same molecules used today or close substitutes that perform identically within existing products, processes, and regulations. This ensures compatibility with entrenched supply chains and downstream manufacturing, avoiding costly reinvention across the chemical value chain.
Chemical production is inherently energy-intensive, often requiring sustained temperatures above 800°C and tightly controlled reaction environments. To scale beyond pilots, new processes must achieve energy efficiencies — and total production costs — that can compete with incumbent fossil-based pathways under realistic market energy prices. Solutions that only work with subsidized electricity, boutique reactors, or excessive capital intensity will struggle to gain traction in a cost-sensitive, commodity-driven industry.
The chemical industry is built on trillions of dollars of long-lived infrastructure and tightly integrated production systems optimized over decades for cost and efficiency. The most viable solutions will either integrate with today’s chemical infrastructure and production processes, or enable alternative production systems that deliver a superior overall value proposition. Because chemical plants operate as interconnected networks of reactions, separations, utilities, and heat flows, changes to one step can result in ripple effects across the system. Solutions that introduce new infrastructure or reconfigure core processes must therefore demonstrate system-level gains — lowering total cost and/or emissions across the full production chain and enabling competitive products at scale.
What about the other gases?
CO₂ isn’t the only emissions challenge in chemicals. Two other pollutants pack an outsized climate punch — and both come from a small set of processes the industry can actually control.
Nitrous oxide (N₂O): The hidden heavyweight. The chemicals sector emits about 261 million tons of CO₂e in N₂O each year, mostly from making just two chemicals: adipic acid and nitric acid. Because these emissions occur inside sealed equipment, they can be sharply reduced using thermal or catalytic destruction technologies already available.
Fluorinated gases (F-gases): Climate super-pollutants. F-gases used in refrigerants and foam blowing agents are thousands of times more potent than CO₂. The chemicals industry is responsible for roughly 1.1 gigatons of CO₂e of F-gas emissions annually, mostly from leakage over time. For an imperative related to next-generation refrigerants, please visit our Operational Efficiency page.
Together, N₂O and F-gases add well over a gigaton of climate impact each year — making them some of the fastest, highest-impact opportunities for cutting emissions in the entire chemicals sector.
