Charlie Tan Leads the Global Impact Coalition in its Mission Toward a Net-zero Chemical Industry

The CEO-led group began life three-plus years ago under the auspices of the World Economic Forum called the Low-Carbon Emitting Technologies (LCET) initiative. It relaunched late 2023 in Geneva as an independent association under its new name.

In a recent email interview, Tan said it has felt like a very organic transition into the role of GIC's chief executive. "My background has always been a blend between corporates and startups. The broad industry that we call commodities and energy has always interested me. Geneva –– where I grew up –– is really the global HQ for a lot of this activity. I guess this has guided my career preference to an extent." 

The GIC launched with seven initial members: BASF, SABIC, Clariant, Covestro, LyondellBasell, Mitsubishi Chemical Group, and Solvay (now Syensqo). Since then, the group has added Siemens Energy and Sabanci Group as members. A community of more than 100 senior executives in the chemical industry and adjacent sectors currently support the GIC by actively engaging in its various working groups.

The GIC claims to be a "first of its kind collaboration of climate action champions in the chemical industry." This is needed as the industry has a significant footprint.

Experts currently estimate the chemical industry to be responsible for 6-7 percent of global greenhouse gas emissions, and that number is only expected to grow due to increasing demand. The industry's heavy reliance on oil and gas inputs renders it a major contributor to carbon emissions, ranking third, behind only steel and cement. The chemical sector, Tan acknowledged, consumes 14 percent of all oil and 8 percent of all gas supply as feedstock and fuel, making it one of the largest consumers of fossil carbon supply for material use.

While a heavy emitter of greenhouse gas emissions, the chemical industry also provides essential materials, technologies and building blocks for roughly 95 percent of all manufactured goods.

All core member companies contribute an equal (undisclosed) membership fee that covers everything to do with operating and running the coalition.

Tan said the member companies have important responsibilities. They are expected to proactively bring project ideas to the table that can be openly discussed as a team and resourced as such. GIC also expects its members to commit to the net-zero transition, champion low-carbon technology, and demonstrate a collaborative mindset. "Collaboration is key to our group’s success," noted Tan.

"At present, we have a diverse group of eight CEOs and C-level executives who are part of the GIC's CEO advisory board meeting twice per year. This structure," he notes, "allows for a swift approval of projects, an alignment on core GIC strategy, and deliverables going forward, all crucial input for the success of our coalition. New members who wish to join will also gain a seat on our CEO advisory board."

He says there are "a tantalizing number of opportunities to explore and develop as a collective industry –– from unconventional partnerships, to pushing new business model and technology frontiers, to new ways to work with research labs and universities, the list goes on. One of my roles is in identifying these areas for collaboration, and then enabling GIC as a platform to execute this most efficiently and inclusively."

GIC entered a strategic alliance with Boston Consulting Group, via which it identified key global impact topics relevant to the chemical industry. These include decarbonization of processes, reduction of high global warming potential emissions, energy transition enablement, circularity of polymers, utilization of alternative carbon sources, and chemical safety and pollution.

"We work with a specialist team at BCG, along with all member companies," Tan explained, "to develop specific business cases for projects that gain interest and excitement. Currently, we have identified around 25 projects that interest companies at an individual level, but also speak to the broader mission and goal of GIC in ‘what cannot be done by any one company alone’ in this path toward net zero."

He cited the five following project ideas currently under development:

• Set up a consortium to optimize the disassembly and recycling of automotive plastics from end-of-life vehicles to increase access to polymer waste streams.
• Collaborate to build strategic hubs for collection, purification and marketing volumes of pyrolysis oil with a standardized quality.
• Create a joint R&D hub of start-ups to advance Carbon Capture Utilization (CCU) through commercial commitments, capacity commitments and technical advice.
• Develop biogenic feedstock suppliers without repurposing food-grade crops via optimized feedstock and matching downstream process and end-use.
• Develop and expand process routes to convert complex waste streams to C2+ monomers or liquids for further chemical product trees.

GIC also is partnering with EY to develop industry articles and white papers, as well as quarterly webinars, starting in June 2024. Tan said these webinars will bring together the GIC community, including business, policy, and financing stakeholders.

EY will extend its reach to bring in a broader chemical network for these discussions, focusing on their Circular Economy Network.  "We will also share insights and get participation from the World Economic Forum," said Tan. The webinars will focus on identifying and resolving key technology, regulatory, and value chain/supply chain barriers to the net-zero transition in the chemicals industry.

An example of successful collaboration between GIC member companies BASF, SABIC, with technology provider Linde, is the recent launch of two new electrically operated steam cracker furnaces that run on green electricity.

By using electricity from renewable sources instead of natural gas, this new technology has the potential to reduce CO₂ emissions of one of the most energy-intensive production processes in the chemical industry by at least 90 percent compared to technologies commonly used today. The European Union and the German Federal Ministry for Economic Affairs and Climate Action helped to fund the project, which aims to support the development of the novel furnace technology.

"Disruptive innovation is crucial if we want to meet carbon neutrality goals, and this project shows the true power of what can be achieved when we work together," Tan said. "This serves as a great lighthouse for future projects that we incubate in the GIC."

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To drive circularity by improving recycling systems, GIC also is focusing on projects in the following areas:

• sensing for sorting
• polymer/inorganic separation at mm-scale
• polymer/inorganic separation at um-scale
• enhanced solvolysis for composite recycling

These projects, noted Tan, are part of the R&D Hub for plastic waste processing that was formalized in September 2023, and represent one of the first projects incubated inside the coalition.

The R&D Hub addresses real-life technical challenges of waste processing and works on problems the industry encounters when developing mechanical and chemical recycling routes for their products. These projects, he said, are based on two technical challenges: "Separation of Polymer Materials from Waste Compositions" and "Processing of Polymer Materials Comprising Fillers and Additives."

Currently, managed waste is either landfilled or incinerated. In both cases, significant GHG emissions result at the end of life, while also causing valuable chemical building blocks to be lost from materials such as plastics. "To change this and drive net-zero circularity," he said, "several challenges need to be overcome, limiting recycling today."

GIC also is actively aiming to assist the automotive sector. Cars on the road are not designed for circularity: while metals are largely recycled, plastics, of which there are more than 50 different grades in any one car, mostly end up landfilled/ incinerated, with high scrutiny from upcoming regulation and increasing demand as OEMs ask for recycled content.

The group has selected its automotive plastic disassembly and recycling consortium among four other projects out of the 25 project ideas they have in their pipeline. "The idea," Tan said, "is to set up a consortium to optimize the disassembly of automotive plastics and get access to polymer waste streams via companies’ collaboration."

Tan noted that this is a classic example of a problem that cannot be solved by any one company alone and requires collaboration not just with chemical companies but across the value chain with OEMs and disassemblers.

"The goal is to create economies of scale through waste-stream pooling and ensuring sufficient demand for these waste streams. This consortium aims to make recycling not only viable but also a sustainable solution for automotive plastic waste."

GIC also wants to become more global. "To have a global impact we need members from all over the world. With most of the founding members being predominantly European focused, we are accepting members now from China, Middle East, and the U.S., amongst others."

"We also need to be represented across the value chain. From upstream to down, brands, waste management companies, technology providers, and other industrial partners that are interlinked with chemical producers are key to creating new partnerships and ultimately increasingly interesting business proposals that help drive us all towards net zero goals."

"I see immense potential in reshaping the chemical industry's impact on our planet," said Tan. "One of our goals is in forging new pathways to achieve this, through collaboration, business model transformation, and solid partnerships that create true value in our drive to a net zero future. I am extremely excited to lead the charge, focused on less talk, more results."

To learn more, go to https://globalimpactcoalition.com.

See a video of a panel discussion about GIC at the WEF's Davos 2024 meeting. 

Robert Grace