Insight

Carbon tax as an opportunity in chemicals

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06 May 2022

Carbon tax as an opportunity in chemicals

Report summary

Chemical producers will increasingly face a pressure to decarbonize. Carbon tax can become the key tool in incentivizing the change. That tax will disproportionately impact margins, depending on the technologies and feedstock in use. Many chemicals are produced by various routes with different carbon footprint. The impact of shifting margins could actually increase profitability of certain assets. This insight describes our methodology in accessing the potential effects of carbon tax and related changes in chemical asset valuation. .

Table of contents

  • Chemical producers will increasingly face a pressure to decarbonize. Carbon tax can become the key tool in incentivizing the change.
  • That tax will disproportionately impact margins, depending on the technologies and feedstock in use. Many chemicals are produced by various routes with different carbon footprint.
  • The impact of shifting margins could actually increase profitability of certain assets.
  • Changing profitability will affect asset valuation and company valuation. The overall carbon footprint of individual assets will play a role in corporate strategies and the management of environmental risks.

Tables and charts

This report includes 8 images and tables including:

  • Cradle-to-gate approach and GHG emission scopes
  • Combining supply-demand, prices and cost views for a DCF analysis
  • Calculation methodology
  • Ethylene feedstock
  • Ethylene cost curve 2021
  • Margin changes
  • Carbon footprint – cradle-to-gate
  • Valuation effect

What's included

This report contains:

  • Document

    Carbon Tax As An Opportunity In Chemicals.pdf

    PDF 680.91 KB