How Chemical Plants Can Benefit from Digitalization in the Energy Transition

Inexpensive, abundant and key to enhancing industrial performance and achieving systems resilience. This is how the United Nations Economic Commission for Europe (UNECE) describes energy efficiency and its role in achieving the global energy transition.

In fact, doubling the world’s progress on energy efficiency to a 4 % improvement per year could help cut one-third of global energy consumption and emissions by the end of the decade, according to the International Energy Agency (IEA).



This is why incentivising and mandating energy reduction has become a key pillar of the European Union’s (EU) climate mitigation policymaking. Under its Energy Efficiency Directive, final energy consumption at EU level must reduce by 11.7 % in 2030, compared to projections made in 2020. As the third biggest emitter of carbon dioxide emissions in the region, the chemical industry has an important role to play in achieving this goal.

Regulatory direction

Today there’s no doubt that energy efficiency is front and centre of energy policymaking. The EU’s Energy Efficiency Directive, for example, establishes the principle of "energy efficiency first". It has already contributed to energy savings of almost one third compared to the 2007 consumption projections for 2030. But it will go further still.

The European Green Deal, the "Fit for 55" package, which was adopted by parliament last year and aligns current EU laws with its 2030 target of cutting greenhouse-gas emissions by at least 55 % (compared with 1990 levels), requires member states to gradually increase their energy savings from 2024 to 2030. It also requires industry and any company consuming energy above a certain threshold to conduct energy audits.

The trajectory is clear: countries representing 70% of global energy demand have introduced or are significantly strengthening efficiency policy packages, according to the IEA. Since 2020 almost USD 700 billion has been spent on energy efficiency investment support, with 70% of this in just five countries: the United States, Italy, Germany, Norway and France.

To meet the EU targets, countries must go further, however. A recent progress report concluded the pace of emissions reduction needs to increase to almost triple the average annual reduction by the end of the decade.

Improve the performance of chemical plants

The chemicals sector is a good example. It will no doubt feel the pressure of these overarching targets but for the industry, achieving energy efficiency is about much more besides.  It’s key to ensuring industries’ ability to remain in business and to produce the goods and materials needed for daily life, say UNECE.

Why? The sector is facing uncertain times: high energy prices affected by geopolitical and macroeconomic events have, and are, threatening the industry’s economics. Capacity utilisation in the EU27 chemical industry declined to 74.1% in the third quarter of 2023, according to industry trade body Cefic. Energy supply concerns put industry at risk of being cut off if there is a big enough shortage–something that could have a devastating impact on a plant’s bottom line and the supply chain alike. In the EU, it becomes more important than ever to operate plants as efficiently as possible in case of lower capacity utilisation. At the same time, flexibility in the process is becoming more important to keep the bottom line healthy. 

In addition to this, the chemical industry is undergoing the most profound transformation in its history. Despite being the largest industrial energy consumer, it’s tasked with achieving climate neutrality by 2050. To be on track to reach this target, its emissions need to peak in the next few years and decline towards 2030, despite strong growth in demand for its outputs.

It is encouraging to see that more and more chemical plants are embracing green feedstocks, such as recycled pyrolysis oil and green hydrogen.

Amid these contexts, working to reduce the sectors energy demand is a no brainer. It’s the cheapest, most immediate, and often easiest, way of slashing emissions and buffeting against energy price shocks and supply issues. All without deploying complex infrastructure overhauls. It will, of course, also lower energy costs and reduce emissions output: doubling efficiency progress could cut energy bills by one third and make up 50% of CO2 reductions by 2030 according to the IEA.

What’s more, energy efficiency measures and the technologies to achieve them–digital twins, Internet of Things (IoT), automation, smart instrumentation and advanced data analytics–can deliver overall improvements in plant performance. The real-time data collected go hand-in-hand with achieving process optimisation to achieve faster production cycles, higher throughput and lower energy use.
 

The proof is in the doing

In the European Commissions’ Transition Pathway for the Chemicals Industry, digital transformation is noted as enabling the industry to meet its key climate objectives, while also retaining its competitiveness and keeping pace with societal development.