It is not only in the current corona crisis that the chemical industry is a vital player. It is a driver of innovation and solutions provider for many of today's global challenges. One of these global challenges is climate change. There is no climate protection without chemistry. The chemical industry is essential for development of solutions to this challenge – and has been for a long time.

The Chinese government attaches great importance to energy conservation and emission reduction. During the Eleventh Five-Year Plan (FYP) (2006-2010) period, for the first time in China, the reduction in the intensity of energy consumption and the reduction in total emissions of major pollutants were identified as binding indicators for national economic and social development. In 2009, the Chinese government announced that by 2020, China’s carbon dioxide emissions per unit of GDP (carbon intensity) would be 40% to 45% lower than in 2005. As the cornerstone for achieving this goal, the 12th FYP (2011-2016) includes for the first time a goal of reducing the intensity of carbon dioxide by 17%. The ecological environmental quality (air, water and soil) was written into the binding index of the Thirteenth FYP (2016-2020) for the first time. Energy conservation, emission reduction laws and standards systems, as well as supervision and management systems have been preliminarily established. As a result, China has basically achieved the promises made in its national mid- and long-term plans and fulfilled the quota committed in the international conventions. It is obvious that energy conservation and emission reduction are of great significance to sustainable development, especially to a country like China that features a mid-to high development pace while a facing shortage of energy resources and the challenges of protecting the environment. In the past decades, China's energy consumption has supported its rapid economic development at a growth rate lower than that of China's GDP – and the growth rate of energy consumption has even slowed. China is also currently the world’s largest investor and technology leader in renewable energy. Although the government has made important commitments and achieved outstanding progress, China still has a long way ahead in terms of green, circular and low carbon development.

The German government introduced the cornerstones of its climate protection goals for 2030, and the cabinet adopted the Climate Action Program 2030 in October 2019. The program calls for pricing harmful CO2 along with subsidies and legal standards for greater innovation and investment to reach the climate action goal 2030, a reduction of greenhouse gas emissions by 55% compared to 1990. The lion’s share of the planned CO2 savings in the Climate Action Package comes from the “coal compromise”. It accounts for over one third of the CO2 savings attributable to the sector, making it the largest single item of the program. Coal-fired power plants will only produce 17 GW of electricity by 2030, and none of the country’s electricity will come from coal by 2038. The second largest single item in the climate package is the expansion of the share of renewable energies in electricity consumption, an increase by 65 percent by 2030. It accounts for over one quarter of all CO2 reduction plans. The German government supports the ongoing development of climate-friendly technologies in Germany by providing grants and funding for research and development. It is particularly interested in promoting CO2 storage and the production of battery cells. It is also working to draft a national hydrogen strategy. The primary advantages of hydrogen are its ability to easily store and transport energy. This enables a much greater degree of flexibility in the provision of energy.

Evonik adopted its Climate and Sustainability Strategy 2020+ in February of last year, establishing a more ambitious goal for the company than the federal government's plan for all of Germany. Evonik will cut its absolute emissions in half between 2008 and 2025. The Group has already achieved 30% of this objective. At the same time, Evonik will significantly step up its sales of sustainable products. By doing so, Evonik is underscoring its claim to be a driver of solutions for urgent concerns of the future.

Evonik’s Climate and Sustainability Strategy comprises the components climate, water and portfolio management. An internal CO2 price will supplement the existing planning metrics as an additional indicator in an effort to appropriately reflect future price developments for emissions in major investment decisions. Since water is a central production resource for Evonik, the previous goal of reducing Group-wide specific consumption will be replaced by a global water management system. Keeping in mind the sustainable advancement of the product portfolio, analytical methods will be directly included in the corporate strategy as well. The data has shown that over 80% of Evonik’s consolidated sales already have a positive effect on achieving the United Nations’ Sustainable Development Goals.

The chemical industry promotes energy saving, emission reduction and sustainable development through improving energy efficiency, technological innovation and the development of renewable energy products. On the one hand, energy management and full utilization are the primary tasks of emission reduction in the chemical industry. On the other hand, the rapid transformation of cutting-edge chemical technology into energy-saving and emission-reducing products and processes is the important contribution the industry can make to the low-carbon economy, environment and society.

With its innovative solutions, the chemical industry is the engineer of the future. Evonik is an active player in the development of innovations. The company researches and develops alternative solutions for its customers’ products, for its own processes, and for further use of CO2. Evonik already generates over 50% of sales with products that make an important contribution to greater sustainability and improved resource efficiency in their application. Four of its products, “green” tire technology, amino acids in animal nutrition, foam stabilizers for insulation materials, and oil additives in hydraulic oils help save greenhouse gas emissions of approx. 100 million metric tons of CO2 equivalents.

However, the reduction of CO2 emissions itself will not be sufficient. Evonik plans to embed CO2 as a raw material in a circulatory system. In collaboration with Germany’s Siemens industrial group, Evonik is conducting research into electrolysis and fermentation processes that make artificial photosynthesis possible. Chemicals are then produced using CO2, green energy and bacteria. This technology could potentially be used in any production process that releases CO2.

Using both recycled and renewable raw materials can help reduce CO2 emissions, and this, in turn, brings us closer to meeting social and political objectives. This is why demands for continued development of circular economy concepts are coming from society and political circles. The new Circular Economy Action Plan of the EU, is setting an ambitious goal: making recycling and reuse a bigger part of every phase in a product's life cycle, especially in high-impact sectors like plastics and construction. Other nations have also recognized the need for a sustainable economy. China, for instance, included preliminary aspects of a circular economy in its 13th five-year plan (2016-2020). The central government has proposed strategies for developing a circular economy. Overall planning and effective implementation in key areas is urged to establish industrial chains based on the technological connection between waste and raw materials. In the process of circular transformation of industrial parks, a more sustainable development model of industrial integration, professional work division and logistics cycle will be established.

Under the new trend of green and low carbon development, the transformation and upgrading of traditional industries with high-tech and applicable advanced technologies is imperative for China. The pace of firmly eliminating backward production capacity needs to be accelerated and the industry entry threshold should be further increased. The country should strictly control high-energy-consuming and high-emission products. With deeply integrated development of manufacturing and digitalization, high-end, smart, green and service-oriented manufacturing systems should be established.

The Chinese government should improve policy incentives and promote a market-based mechanism for green development. A series of economic policies such as those on pricing, finance, taxation, and funding for encouraging energy conservation and emission reduction have already been launched. However, the support and restraint mechanisms are still insufficient, and the supervision approach and regulatory instruments are relatively weak. The government would do well to reduce complexity and interpret the many policies, simplify the processes and make them more clear, transparent and easy-to-understand, which would be more conducive to effective implementation. Overall, publicity and education for sustainability should be strengthened to further enhance the awareness of all citizens.

In Germany we need more answers about turning the country into an engine of innovation that conducts business without damaging the climate – while also securing social and economic sustainability. In addition, we need further impulses to make Germany a global technology leader for this transformation. Putting a price on CO2 cannot by itself solve the problems encountered on the way to achieving climate goals. The industry also needs alternative sources of energy, to which it can resort before existing technologies become more expensive. So far, electricity production with wind power and solar energy is still volatile and not sufficient for large scale energy demand for industry at a cost competitive price. As an industry nation, Germany depends on reliable access to electricity at all times to remain competitive. In addition to climate protection, climate protection legislation must therefore define mandatory targets for energy supply security, industrial value creation and job security.

Innovations are the driving force of sustainability. Therefore, we need political framework conditions that help the industry to make climate-friendly investments and drive innovations. We need much more concrete investment in new technologies, an expansion of infrastructure and optimal conditions for research and development to strengthen enterprise competitiveness, secure employment, and promote the development of sustainable production processes and products.

Above all, the contributions of the chemical industry for green development must be recognized. Germany must demonstrate that environmental and climate protection can be compatible with economic growth and social prosperity. The chemical industry needs public trust and political support, along with objective and responsible decisions. Given the ecological, economic, and social concerns inherent in sustainability, our goal must be to balance these three dimensions on an equal footing –Planet, People, Profit.

The chemical industry is uniquely positioned to offer powerful levers for addressing the sustainability challenges of the future. Hardly any other company has made this claim a greater priority than Evonik. Our mission is to make people's lives better. Which is why we see ourselves as “Leading beyond chemistry, to improve life, today and tomorrow.” Evonik will not let up in its efforts and will continue to strive to become the world’s best specialty chemicals company. Including in terms of sustainability.

Download the full report：Green Low-carbon Cycle Development and New Momentum for Green Development