Oil demand from the petrochemicals sector is likely to remain robust "no matter which energy transition scenario plays out," said Amin Nasser, Saudi Aramco president and CEO, on Dec. 6, the opening day of the 16th Gulf Petrochemicals and Chemicals Association (GPCA) Annual Forum, being held for the first time in Riyadh, Saudi Arabia.

Under a net-zero scenario, petrochemicals could still account for more than half of total global oil demand by 2050, said Nasser in a keynote speech. "The more intense the transition, the more important petrochemicals will be to the oil and gas industry, and other industries," he said.

The ongoing downstream push by state-owned Aramco to convert more of its crude oil to chemicals was highlighted by Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, as he inaugurated the forum. Flagging the previously stated Saudi Arabian goal to expand Aramco's liquids-to-chemicals capacity to 4 million barrels per day by the end of the decade, the minister said, "We shall deliver it." Aramco will be able to "work for the full chain of chemicals, including specialty products. And every molecule we produce, we will ensure that we use it, consume it, produce it, and send it as a finished product," he said.

Aramco recently announced plans for the first large-scale deployment of its crude-to-chemicals cracking technology at the company's S-Oil affiliate in South Korea, and a joint project between Aramco and Sabic to develop a crude-to-chemicals complex at Ras al-Khair, Saudi Arabia. Aramco is the parent of Sabic.

"These are major steps forward in our downstream business, and show the power of technical innovations to meet our ambitions. More advanced, more sustainable materials would undeniably strengthen the power of our net-zero ambition and our chemicals strategies," said Nasser. "Our strategy to convert up to 4 million barrels per day of liquids into chemicals by 2030 is beginning to take shape."

Nasser went on to highlight to a packed audience what he describes as a crucial component "largely missing from the net-zero debate—the enormous impact that growth in material use will have on reducing global greenhouse gas emissions." Labeling it the materials transition, Nasser said it is "just as important as the energy transition to climate protection ... and especially relevant to the chemical industry and its future strategies. Global net-zero emissions goals will not be met without a successful materials transition."

Demand for materials including concrete, iron, and steel is projected to more than double from 79 gigatons in 2011 to 167 gigatons in 2060, Nasser said. But materials production, use, and eventual disposal already account for almost a quarter of all global CO2 emissions, he said. "So the increase in materials use, even if somewhat decoupled from economic growth, will be shadowed by a further rise in CO2 emissions, particularly in hard-to-abate-industries," Nasser said.

To help reduce emissions in this growth environment, more durable and more sustainable advanced materials "must be the building blocks of 21st century life," he said. This is where chemistry in action could shape a lower-emission, more sustainable future through a circular carbon economy and better materials efficiency, he said. However, the cost of advanced composite materials is much higher than that of steel, aluminum alloys, and concrete, and Nasser called on the chemical industry to reduce its costs through further innovation.

The "big opportunity" for the chemical industry is steadily to supplement existing materials with more durable, sustainable, and lower-carbon alternatives including polymer- and carbon-based materials, he said. "Already, every 1 megawatt of installed renewable energy capacity utilizes 8 to 11 tons of petrochemicals-based materials. This will bring a viable path to a truly sustainable materials future within reach and is exactly why we are strengthening our focus on materials transition at Aramco, making it a central part of achieving our 2050 net-zero ambition."

Lower-carbon hydrogen will also play a major role in a variety of applications in the chemical industry, according to Nasser. "It can produce ammonia and methanol, or be used as a clean energy source in steam crackers, and in turn can produce more sustainable fertilizers, plastics, and other industrial products," he said. Aramco and Sabic recently obtained the world's first independent certification for the production of blue hydrogen and blue ammonia.

Abdulrahman al-Fageeh, GPCA chairman and CEO of Sabic, said in an opening speech that with global economic growth predicted recently by the International Monetary Fund to fall to 2.7% in 2023 from 3.2% in 2022, concerns about a global recession are already impacting demand for chemicals. The chemical sector usually feels the effects of a recession "two to three quarters before the global economy," he said. "I can tell you ... it has already begun for chemicals."

However, the chemical industry "has always managed to overcome the challenges that it is facing. The key to our success is by seizing every opportunity that challenges bring. Through such action, the GCC can shape a sustainable future."

This year's annual forum is being held under the overall theme Chemistry in Action: Shaping a Sustainable Future.