Energy & Greenhouse Gas Emissions

The business of chemistry transforms natural raw materials from earth, water and air into valuable products that enable safer and healthier lifestyles. Materials made by the chemical industry enable energy-saving and renewable applications, including solar panels and wind turbines, electric and fuel-efficient vehicles, high-performance building materials, advanced batteries, energy-efficient lighting and more. 

Chemical manufacturers use energy in two ways: for fuel and power and as feedstocks, otherwise known as raw materials. The business of chemistry is energy-intensive; in fact, it is the second largest manufacturing user of energy (fuel and nonfuel). Within the chemical industry, this is especially the case for basic chemicals, as well as certain specialty chemical segments (e.g., industrial gases). The largest user of energy is the petrochemical and downstream derivatives business.

In addition to air, water, minerals and plants, the business of chemistry uses large quantities of hydrocarbon feedstocks. While the majority of chemical feedstocks are energy sources, such as natural gas, natural gas liquids (NGLs) and naphtha, increasingly biobased and recycled content feedstocks are being used.

These petrochemical feedstocks are the foundation of chemistry of plastics, pharmaceuticals, electronic materials, fertilizers, and thousands of other products that improve the lives of a growing and prospering population. The product chains for these petrochemical feedstocks can be found here:

The chemical industry in the U.S. predominantly uses NGLs as feedstocks. In Europe and Asia, however, most producers use naphtha, a petroleum refinery product. The price of naphtha is highly correlated with the global price of oil. The price of natural gas liquids in the U.S. is linked to U.S. natural gas prices. As a proxy for feedstock competitiveness, we use the ratio of the global oil benchmark price (Brent) to the U.S. natural gas benchmark (Henry Hub).

As a rough rule of thumb, when the ratio is above 7, U.S. natural gas-based chemical production is globally competitive. When the ratio falls below 7, U.S. production is relatively disadvantaged.

Since 2010, when the development of shale gas in the U.S. was underway, the ratio has averaged 23, making the U.S. among the lowest cost regions globally to produce some chemical products. As a result, the there has been new investment in U.S. chemical manufacturing to benefit from this energy advantage.

Carbon dioxide emissions represent the majority of greenhouse gas (GHG) emissions from the business of chemistry. Nitrous oxide, methane and some other gases account for the balance. Carbon emissions of the business of chemistry, including the indirect carbon value of purchased electricity, account for less than 5% of total U.S. emissions. 

Per unit of output, U.S. chemical industry GHG emissions have declined significantly since 1990 due to a range of enhancements and improvements, including one-time process changes reducing nitrous oxide emissions, more effective catalysis, upgrades in industrial and process technologies, fuel switching (e.g., natural gas instead of coal), and education and training for employees.

ACC estimates industry-wide data for Scope 1 (emissions that occur from sources that are controlled or owned by an organization) and Scope 2 (indirect emissions, i.e., purchased electricity, steam, etc.) emissions. Separately, ACC’s Responsible Care^® program collects data on energy efficiency and greenhouse gas intensity.

The U.S. chemical industry has achieved significant energy efficiency gains. The fuel and power energy consumed per unit of output is half that of 1974.

Improvements in energy efficiency are essential for the business of chemistry to maintain its competitive edge in domestic and world markets. Since energy costs remain a major cost to the industry, there is a clear incentive for energy efficiency efforts.