More than 30 leading pioneers of the chemical and material sector are welcoming the latest political papers from Brussels, Berlin, and Düsseldorf, Germany, according to recent news from the Renewable Carbon Initiative (RCI). Founded in September 2020 by 11 leading companies from six countries under the leadership of nova-Institute in Germany, the RCI aims to support and speed up the transition from fossil carbon to renewable carbon for all organic chemicals and materials.

The RCI is reporting that the political situation for renewable carbon from biomass, CO2, and recycling for the defossilization of the chemical and materials industry has begun to shift fundamentally in Europe. For the first time, important policy papers from Brussels and Germany acknowledge that the term decarbonization alone is not sufficient, and that there are important industrial sectors with a permanent and even growing carbon demand. The need for a sustainable solution to this carbon demand and the implementation of sustainable carbon cycles are finally being identified on the political stage, which RCI reports is fundamental to the creation of a sustainable chemical and derived materials industry.

The goal is to create sustainable carbon cycles, which require comprehensive carbon management of renewable sources, including carbon from biomass, carbon from carbon capture and utilization (CCU)—the industrial use of CO2 as an integral part—as well as mechanical and chemical recycling. The RCI reports that only the use of all alternative carbon streams enables a true decoupling of the chemical and materials sector from additional fossil carbon from the ground.

The RCI aims to support the smart transition from fossil to renewable carbon: utilizing carbon from biomass, CO2, and recycling instead of additional fossil carbon from the ground. This is crucial because 72% of the human-made greenhouse gas emissions are directly linked to additional fossil carbon. The RCI supports all renewable carbon sources available, but the political support is fragmented and differs between carbon from biomass, recycling, or CCU. CCU in particular has not been a strategic objective in the European Green Deal and Fit-for-55.

This will change fundamentally with the European Commission's communication paper on “Sustainable Carbon Cycles” published on December 15, 2021. The position in the paper represents an essential step forward that shows embedded carbon has reached the political mainstream—supported by recent opinions from members of the European Parliament and also, apparently, by the upcoming IPCC Assessment Report 6. Now, CCU is becoming a recognized and credible solution for sustainable carbon cycles and a potentially sustainable option for the chemical and material industries. Also, in the political discussions in Brussels, the term “defossilation” is appearing more and more often, complementing or replacing the term decarbonization in those areas where carbon is indispensable. MEP Maria da Graça Carvahlo is among a number of politicians in Brussels who perceive CCU as an important future industry, putting it on the political map and creating momentum for CCU. This includes the integration of CCU into the new Carbon Removal Regime and the Emission Trading System (ETS).

Communication Paper on “Sustainable Carbon Cycles”

According to RCI, the communication paper “Sustainable Carbon Cycles” is the first time the importance of carbon in different industrial sectors is clearly stated. One of the key statements in the paper is the full recognition of CCU for the first time as a solution for the circular economy, which includes CCU-based fuels as well. The communication paper distinguishes between bio-based CO2, fossil CO2 and CO2 from direct air capture when addressing carbon removal, and it also announces detailed monitoring of the different CO2 streams.

Not only CCU, but also carbon from the bioeconomy is registered as an important pillar for the future. Here, the term carbon farming has been newly introduced, which refers to improved land management practices that result in an increase of carbon sequestration in living biomass, dead organic matter, or soils by enhancing carbon capture or reducing the release of carbon. Even though the list of nature-based carbon storage technologies is non-exhaustive in RCI’s view, it stated that it strongly supports the paper’s idea to deem sustainable land and forest management as a basis for the bioeconomy more important than solely considering land use as a carbon sink.  

Chemical recycling, which is also an alternative carbon source that substitutes additional fossil carbon from the ground (i.e. carbon from crude oil, natural gas or from coal), is completely absent from the communication paper.

Coalition Paper of the New German Government

The whole of Europe is waiting to see how the new German government will shape the German climate policy. The new reform agenda focuses in particular on solar and wind energy, as well as hydrogen. Solar energy is to be expanded to 200 GW by 2030, and two percent of the country's land is to be designated for onshore wind energy. A hydrogen grid infrastructure is to be created for green hydrogen, which will form the backbone of the energy system of the future—and is also needed for e-fuels and sustainable chemical industry, a clear commitment to CCU.

There is a further focus on the topic of circular economy and recycling. A higher recycling quota and a product-specific minimum quota for the use of recyclates and secondary raw materials should be established at European level. In the coalition paper, there is also a clear commitment to chemical recycling.

A significant change for the industry is planned to occur in regards to the so-called “plastic tax” of 80 cents per kilogram of non-recycled plastic packaging. The tax has been implemented by the EU, but most countries are not passing on this tax to the manufacturers and distributors, or only to a limited extent. The new German government now plans to fully transfer this tax over to the industry.

Carbon Management Strategy in North Rhine-Westphalia, Germany

The RCI also welcomes North Rhine-Westphalia (NRW, Germany) as the first region worldwide to adopt a comprehensive carbon management strategy, a foundation for the transformation from using additional fossil carbon from the ground to the utilization of renewable carbon from biomass, CO2, and recycling. For all three alternative carbon streams, separate detailed strategies are being developed to achieve the defossilisation of the industry.

North Rhine-Westphalia is the federal state with the strongest industry in Germany, in particular the chemical industry, and it is here that a first master plan for the conversion of industry from fossil carbon to biomass, CO2, and recycling will be implemented. If successful, NRW could become a global leader in sustainable carbon management, and the region could become a blueprint for many industrial regions.

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