This article is part of a series. To learn more, please see our other articles in this series: How Fashion and Furniture Can Lead Toward a Market for Lower-Emissions Polyester and Lower-Emissions Fabrics of the Future: How to create a market for low-emissions clothes and textile products
Polyester Reimagined: Evaluating the Impact of Textiles in Accelerating a Market for Low-Emissions Chemicals
How product definition drives emissions reductions in a climate-differentiated polyester value chain, and its role in stimulating demand for lower-emissions chemicals.
Consumer-facing retail sectors have been first movers in championing environmental sustainability in recent years. From fashion to automobiles to food and beverage, companies have made commitments to reduce their greenhouse gas emissions and minimize the human health impacts of their products, and this trend continued in 2024.
In our previous articles in this series, we analyzed polyester as a case study for low-emission textile products and shared insights from engaging with companies exploring this space.
Goldwin, a prominent outdoor apparel company in Japan, launched a consortium to pioneer a sustainable polyester supply chain. Other apparel retailers such as Bestseller and Gap have joined the Future Supplier Initiative which aims to provide financing solutions for textile factories to deploy electrification and renewable energy solutions. In the automotive sector, the Suppliers Partnership for the Environment (an association of global automakers and their suppliers) announced a program to support automotive suppliers in procuring renewable energy for manufacturing.
What threads these announcements together is that retailers increasingly want to work with their suppliers to reduce climate pollution. Supply chain (Scope 3) emissions could represent as high as 70 percent of retail companies’ total emissions. Many of these retail products start from a consolidated set of petrochemical intermediates such as naphtha (derived from crude oil and natural gas), ethylene, paraxylene, and PET which supply the building blocks for consumer goods. Consequently, retailers will play a crucial role in demanding low-emission products. Suppliers at each step have different emissions reduction options to reach their goals.
To understand these tradeoffs, we used polyester as a case study, and modeled how technologies can influence emissions reduction impact for stakeholders and accelerate the market for climate-differentiated chemicals.
Tracing a polyester t-shirt’s lifecycle emissions and sources
Tracing emissions and their sources can create transparency among stakeholders in the value chain while identifying relevant, impactful solutions to mitigate them (Exhibit 1). We see that primary chemicals (including ethylene, propylene, benzene, toluene, mixed xylenes, ammonia, and methanol), which form the precursors for polyester, account for 77 percent of Scope 1 emissions. These are direct emissions generated from processing fossil fuel materials at high temperatures using fossil fuel-based heat sources and feedstocks. Solutions that switch out unabated fossil feedstocks and heat sources to lower emission options or build efficiency into the production process represent a significant emissions reduction opportunity.
Exhibit 1: Tracing the lifecycle emissions for one polyester t-shirt
The later steps where polyester is spun and woven into finished products account for 78 percent of Scope 2 emissions. These are emissions from electricity use in textile mills and the dyeing and finishing processes. Suppliers here can reduce emissions by reducing electricity demand or procuring renewable electricity to run these operations.
At the finished apparel step, retailers’ Scope 3 emissions account for 30 percent of the t-shirt’s overall footprint. This mainly comes from purchased goods, retail operations, and consumer use of the apparel. In this analysis, we focus on how suppliers can reduce their emissions as it will play an outsized role in reducing retailers’ Scope 3 emissions.
Emission reduction options today, tomorrow, and everything in between
To reduce polyester’s emission footprint, we evaluated solutions based on technological and commercial readiness, and the type of investment needed to implement it. Many technologies that are available commercially today are economically favorable to implement, and require more straightforward operational changes. Many earlier-stage technologies require significant capital investment and projects but also present bigger emissions reduction opportunities.
- Near-term emissions reduction through changes in operations: There are technologically and commercially ready solutions available today that upstream and midstream suppliers can take advantage of. Chemical producers, polyester manufacturers, and retailers can mitigate 47 percent of the polyester t-shirt’s footprint by procuring and utilizing low-leakage natural gas (methane) in production and switching out all fossil fuel-based electricity to renewable electricity in manufacturing.
- Near-term emissions reduction through capital investment: There is another set of technological solutions that can enable upstream chemical producers to participate more meaningfully through near-term capital expenditure. Shifting from natural gas to low-intensity hydrogen for fueling and feedstocks, electrifying low- to medium-temperature process heat, and mitigating emissions from crude oil processing further upstream can help chemical producers reduce 31 percent of polyester’s lifecycle emissions.
- Long-term emissions reduction through capital investment and innovation: In the long-term, investing in changes to the inherent production process such as electrifying steam cracking (high-temperature process heat), using green hydrogen and defossilized feedstocks, low-intensity chemical recycling, and using renewable fuels for transporting finished polyester products can tackle the last mile of emissions reduction (13-28 percent) for a highly emissions-differentiated value chain. Adding transformative technologies to the mix such as switching from fossil fuel feedstocks to renewable CO2 and H2 feedstocks for synthetic chemical production can reduce 45 percent of overall emissions and make chemical producers leaders in emissions-differentiation.
Evaluating the long-term impact: Verifying emissions reduction through low-emissions product definition
A progressive, climate-aligned product definition or emissions reduction threshold plays a significant role in where and how emissions are reduced and is an important design choice for future policy action or voluntary procurement measures. For example, the EU’s Renewable Energy Directive mandates a minimum 50 percent emissions reduction for aviation fuel to be classified as “sustainable aviation fuel (SAF).”
We evaluated a similar 50 percent emissions reduction threshold for the polyester value chain, and looked at two different ways this could be implemented. First, it is important to specify where in the value chain the 50 percent lower-emissions product is defined as it influences the types of emissions reduced and the technologies needed. If 50 percent emissions reduction is defined at the polyester fabric step, it can be achieved simply through increased renewable energy procurement in the polyester spinning and weaving steps. The emissions from primary chemical suppliers remain unchanged – and a reduction in these emissions are key to enabling a market for lower-emission chemicals.
If the same 50 percent emissions reduction was targeted instead at the PET resin step, it will encourage deployment of both near-term operational solutions and long-term capital investment that will drastically cut emissions from chemical production. So, increasing demand for textile and other chemicals-derived products that have an emissions reduction threshold defined at the upstream steps of the value chain can drive a market for low-emission chemicals.
Derisking the deployment of emissions reduction technologies in chemical production
The capital-intensive solutions for upstream chemical producers have very high emissions reduction potential, but they often come with equally high financial and technological risk and require manufacturing downtime for implementation. Looking beyond polyester, there could be a strong case for changing chemical production processes if the solutions can scale emissions reduction impact to other value chains. For example, interventions at the upstream producers’ aromatics reforming step could enable most plastics using benzene- and xylenebased chemicals to reduce emissions in addition to polyester, as half of aromatics go into making these other plastics.
So, a combination of aggregated demand volumes and willingness to pay is needed among consumer-facing value chains that rely on these chemicals, such as automobiles, food and beverage packaging, healthcare, and construction for emissions reduction at the initial upstream steps to be truly feasible and impactful.
Over time, the deployment of emissions reduction solutions in chemical production can be derisked with more participation from other consumer products sectors, and an increase in demand and willingness to pay for climate-differentiated products. It is also important to recognize that demand reduction may be a more suitable solution for some chemical products (e.g., single use packaging, fast fashion textiles). Substituting demand with lower-emission chemicals should be intentional and focused on durable products.
So, what does this mean for demand creation and market acceleration?
Implementing any of these solution sets independently will deliver an 11-47 percent lower emissions product in the hands of textile product buyers. Stacking and implementing multiple solution sets over time presents an even bigger opportunity for fashion and furniture retailers to deliver over 75 percent lower-emissions products. One option for demonstrating demand for these solutions is through retailer participation in climate-differentiated chemicals buyers alliances (similar to those for clean energy and aviation fuel).
High-margin retailers of premium apparel can become first movers in defining what good looks like for low-emissions polyester, signal demand for these products from their suppliers, and improve the case for commercial readiness of emissions reduction solutions. If production costs are reduced and lower margin/high volume retailers follow, this example can pioneer a broader market for differentiated, low-emission chemicals. Robust accounting guidance and standards can accelerate supply and demand by creating transparency for transacting these differentiated products.
The government can support market creation by launching green public procurement for chemicals-derived materials integral to their operations (such as military uniforms and equipment, carpets and furniture in government buildings, paints, and cleaning products). For example, a 10-50 percent shift to green public procurement in military equipment and uniforms (made of polyester and nylon) could represent $100-$500 million in federal spending toward low-emission chemicals. Today in the United States, the Federal Buy Clean Initiative is rooted in green public procurement of lower-emissions construction materials, which intersects with some products of the chemicals industry. In collaboration with the Environmental Protection Agency, General Services Administration is directing federal contractors at 1,500+ government-owned buildings to provide cleaning products free of harmful polyfluoroalkyl substances and ensuring they also meet the minimum bio-based content requirement set by the US Department of Agriculture.
In the long term, policy-based incentives such as tax credits and loans can help suppliers derisk the financial barrier to confidently invest in deploying these solutions at chemical manufacturing sites. In the nearer term, several mechanisms such as retailer-driven voluntary supplier engagement and procurement programs, government-driven green public procurement programs, policy incentives, and regulatory mandates can drive market creation for differentiated chemicals.
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