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Climate Change

US puts $6 billion toward industrial decarbonization

Department of Energy to fund projects from BASF, Dow, and other big chemical firms

by Michael McCoy
March 27, 2024 | A version of this story appeared in Volume 102, Issue 10


Several of the world’s biggest chemical companies are poised to receive slices of the $6 billion the US Department of Energy (DOE) will hand out for projects intended to lower the carbon footprint of manufacturing in the US. The DOE calls the funding “the single largest industrial decarbonization investment in the nation’s history.”

A person climbs curved stairs on the outside of a chemical tank.
Credit: BASF
BASF will get up to $75 million to help with a decarbonization project at its site in Freeport, Texas.

The funds, mostly from the Inflation Reduction Act, will be distributed across industries such as chemical and refining, concrete, metals, glass, and pulp and paper. Industry contributes nearly one-third of US greenhouse gas emissions, the DOE says.

The companies will also contribute funds to the projects, boosting the value of the investment to more than $20 billion overall, according to the DOE. Funded projects will cut carbon emissions by an average of 77% compared with conventional facilities, the agency says.

The chemical industry is receiving about $1.3 billion for eight projects in Texas, Louisiana, and Kentucky that together are expected to eliminate about 3 million metric tons (t) of carbon dioxide emissions annually.

The largest chemical industry award, up to $375 million, will go to Eastman Chemical for a polyethylene terephthalate recycling plant to be built in Longview, Texas. Eastman recently opened a similar plant in Kingsport, Tennessee, and last year filed for tax breaks to build a plant in Longview. The overall investment in the Texas facility will be about $1.2 billion, according to an announcementfrom governor Greg Abbott.

The second-largest chemical industry award, up to $332 million, is going to ExxonMobil for a project in Baytown, Texas, to use low-carbon hydrogen in place of natural gas as a fuel for furnaces that crack hydrocarbons into ethylene. The plant modifications in this project alone could avoid 2.5 million t of CO2 emissions a year, the DOE says.

Dow will receive up to $95 million to help build a plant on the US Gulf coast to make carbonate solvents and other ethylene derivatives. The plant’s raw materials will include about 100,000 t per year of CO2 captured from Dow’s ethylene oxide manufacturing operations.

Carbonate solvents are part of the electrolyte mixture that allows lithium ions to shuttle between electrodes in a lithium-ion battery. Such solvents were already attracting investment. In February, the Japanese firm Ube announced plans for a $500 million facility in Louisiana that will make dimethyl carbonate and ethyl methyl carbonate. Another firm, China’s Shenzhen Capchem Technology, is considering building a $350 million carbonate solvents plant in Louisiana.

Other projects set to receive DOE funding include a partnership between LanzaTech and Technip Energies Stone & Webster Process Technology that will use fermentation to convert CO2 captured from ethylene production into ethanol and ethylene. The partners are set to receive up to $200 million. BASF will get up to $75 million to use plasma gasification to recycle byproducts of chemical manufacturing into synthesis gas, a mixture of hydrogen and carbon monoxide, at the firm’s complex in Freeport, Texas.

Projects announced in other industries draw on chemical technology. For example, International Paper will get up to $47 million to use graphene-based membrane technology from Via Separations, one of C&EN’s 10 Start-Ups to Watch in 2019, to concentrate liquid waste at a pulp mill in Mansfield, Louisiana. International Paper now uses steam to concentrate the waste.

And Sublime Systems, one of C&EN’s 10 Start-Ups to Watch last year, is getting up to $87 million to help build a cement plant in Holyoke, Massachusetts, that will use an electrochemical process to make lime, a cement ingredient, from calcium silicates. Most cement plants make lime from calcium carbonate using a reaction that releases CO2.

Not everyone sees funding decarbonization as the role of government. Travis Fisher, director of energy and environmental policy studies at the Cato Institute, a libertarian think tank, notes that the cost of the program will be passed from the chemical sector to the US taxpayer. “Taking money from taxpayers and handing it to favored corporations is not a sustainable path to economic prosperity,” Fisher says in an email.

But David Yankovitz, leader of Deloitte Consulting’s US chemical practice, points out that three-quarters of the technologies needed to get the world to net-zero CO2 have yet to be commercialized. “Without policy-driven investment, it’s going to be difficult to advance at the pace we need to decarbonize,” he says.

Some technologies, including advanced plastics-recycling technologies like Eastman’s, are being commercialized without government incentives, thanks to a desire by brand owners for recycled or low-carbon raw materials. Low-carbon building-block chemicals that are far from the end user don’t have the same market pull, Yankovitz says, creating an opening for policy incentives. “There almost needs to be an intervention in the value chain at the building block level,” he says.



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