CO₂ as a raw material for a carbon-neutral economy: The ESYS Academies’ Project takes stock and looks to the future

Berlin, 25 February 2025

To achieve carbon neutrality, the chemical industry must replace its existing fossil carbon sources with carbon-neutral alternatives or establish closed carbon cycles. A discussion paper by the ESYS Academies’ Project shows that, in addition to carbon from biomass and recycling, Carbon Capture and Utilization (CCU) can also contribute to carbon neutrality under certain conditions.

Many everyday products, such as plastics or detergents, contain carbon, which today comes mainly from mineral oil. At the end of the product’s useful life, this is often emitted into the atmosphere in the form of carbon dioxide (CO₂). According to estimates, what are known as the “end-of-life emissions” of chemical products accounted for about eight per cent of Germany’s greenhouse gas emissions in 2020. To reduce these emissions, either carbon-neutral carbon sources must be developed or the carbon must be kept in closed cycles, for example through repeated recycling. Another possibility is to capture CO₂ from industrial processes or from the atmosphere and reuse it as a raw material (a process known as Carbon Capture and Utilization, or CCU for short).

Which carbon sources will be available in the future? How can the carbon be kept within the cycle? How might carbon demand in Germany evolve? How can CCU contribute to a carbon-neutral economy? And what course must policy makers and industry set for this today? These and other questions are addressed in the Discussion Paper “CO₂ as a raw material – a building block of a climate-neutral carbon economy” by the “Energy Systems of the Future” (ESYS) project, a joint initiative of acatech – National Academy of Science and Engineering, German National Academy of Sciences Leopoldina and the Union of the German Academies of Sciences and Humanities.

CCU: new carbon source with a complex carbon footprint and a high energy demand

In many cases, CCU is not carbon neutral. For example, if the CO₂ derived from fossil or mineral sources is used for products with a short useful life, such as fuels, this merely delays its release into the atmosphere for a short time. The process can only be carbon-neutral or, under certain conditions, even provide net negative emissions if biogenic or atmospheric CO₂ is used, the CO₂ used is stored in durable products, is recycled or Carbon Capture and Storage (CCS) is used at the end of the product’s useful life. This distinction is significant in view of the goal, set out in Germany’s Federal Climate Action Act, of achieving greenhouse gas neutrality in 2045. In order to achieve the best climate change mitigation possible, future regulations should consider the different emission balances associated with the various CCU pathways.

As CCU evolves, both synergies and competitive situations (e.g. for limited biomass potential) should be considered from the outset. An adequate infrastructure for CO₂ transportation is not only essential for CCU, it is also required for CCS. This means that infrastructure planning may well reveal potential synergies between CCS and CCU. According to present understanding, however, CCU will remain quite an expensive method of climate change mitigation, even in the long term. To produce basic chemicals from CO₂, such as methanol for the chemical industry, not only does the CO₂ have to be extracted, which can be a very laborious process, hydrogen is also required for the synthesis. Producing hydrogen in a carbon-neutral manner requires a great deal of energy, which drives up the costs of CCU.

“In the medium to long term, meeting industry’s future carbon demand in a carbon-neutral way is a key challenge,” emphasises Manfred Fischedick, member of the ESYS Board of Directors and President and Scientific Director of the Wuppertal Institute for Climate, Environment and Energy. “Many questions remain unanswered in this regard, such as ‘Which technologies will come out on top for the supply of raw materials?’ ‘What role will the import of carbon-neutral products play as competition for domestic production?’ And ‘how can the state best support the ramp-up of a climate-neutral carbon economy as early as possible?’ The transformation should be driven by an industrial strategy that looks to the future. It’s also important to reduce the demand for carbon as much as possible. For example, by using and reusing products for as long as possible, by recycling and by using products containing carbon more sparingly overall – if only because of the high costs associated with the various supply options, especially with CCU.”