According to Jim Fitterling, CEO of Dow, the ability for industry to grow while decarbonizing emissions with new technologies are not mutually exclusive goals.
"They are long-term projects. They are not things that can be implemented in three or four years - they're decade-long projects and they need good, long-term policies like a market-related price on carbon," he said.
From left are Lyn Tattum, vice president of Oil, Mid-Downstream and Chemical for S&P Global; Jim Fitterling, chairman and CEO of Dow; Karen McKee, president of ExxonMobil Chemical Co.; Martin Brudermüller, chairman of the board of executive directors for BASF SE; and Yousef Abdullah Al-Benyan, vice chairman and CEO of SABIC.
A market-related price on carbon is more important than a tax "because you want the financial industry to come in, support and accelerate the transition," Fitterling said at the World Petrochemical Conference 2022 in Houston.
"Carbon tax would be a tax to raise revenue and write checks, not to go to the solution of reducing carbon emissions," Fitterling said. "We've got to keep our eyes wide open as we work through the regulatory policy to make sure that the capital markets are part of this investment."
Fitterling said Dow is currently in the process of looking at sites in the U.S. for a small-scale, modular nuclear reactor.
"Obviously, this is a longer-term objective," he said. "But when you think about power and utilities, one of the things that small-scale reactors do is give you a pretty good balance of electric and steam output. For a lot of our operations, we need that balance. A small-scale modular nuclear reactor can take an entire site to net-zero."
Fitterling noted that both costs and the regulatory environment must be addressed in this project. "But the appetite out there is good," he said. "If we can get a world-scale, industrial-scale with a small-scale, modular nuclear reactor, then that will be another tool in the arsenal to take us to net-zero."
Fitterling's colleagues at Dow are "super optimistic" about the project, he said.
"Employees are energized. The engineers are really engaged in working on it. Customers are demanding it," he said. "We have to understand that customers will want more of this, and our customer base is global, so they're going to need it. They want to make claims about their products, too."
Much work remains within the regulatory environment, Fitterling said, "the least of which is helping people understand this is a transition. Doubling down on alternatives is fine, but we need to double down on all forms of energy in this country."
Weathering a regulatory tsunami
Martin Brudermuller, chairman of the board of executive directors for BASF SE, predicted that by 2030, the demand for net-zero products will be higher than its supply.
"And if that is the case, there is also the business case that means the customer will pay a higher price for these products," he said.
Emissions regulations "have to be economic," he said. "There has to be an honest discussion about an incentivizing, positive, rewarding regulatory framework to make it happen. The industry has to stand firm and I think that's why you see us in alignment concerning what has to be done. There also has to be alignment with politics and society. It's a new way of working together, and I sincerely hope that we can manage in this direction."
Karen McKee, president of ExxonMobil Chemical Co., emphasized the importance of "pivoting to the products that enable our customers and society to achieve their goals along the path to net-zero."
"And biofuels, of course, enable others to achieve their sustainability objectives," she said, adding that achieving net-zero requires diverse, creative approaches and solutions from both industry and society.
"We need a lot of collaboration across industries, and across different constituent groups like governments and regulatory leaders."
Ultimately, McKee said, the path toward bringing emissions down to net-zero is complex and winding.
"But the great news is it's a crowded path," she concluded. "There are many of us on this path, and we need everyone on it.
