Decarbonising Chemicals: A comparative assessment

The chemical industry produces the building blocks of modern life, from plastics and fertilisers to semiconductors. Its transition matters not just for its own emissions, but because it sits upstream of almost every sector’s decarbonisation effort. This makes the sector’s transition critical to economy-wide decarbonisation.

The transition to a Net Zero future is one of the major challenges the chemical industry is currently facing. Overall, the sector is not aligned to the Paris goal of “well-below 2°C”, but there is a wide range of alignment within the sector, showing that transition ambition is feasible.

Planet Tracker compares the climate transition plans of eight leading chemical companies covered by the Climate Action 100+ list: Air Liquide, BASF, Bayer, Dow, Dyno Nobel, LyondellBasell, SABIC, and Toray. The comparison spans target ambition and performance, governance, policy engagement, risk management, and capital alignment, aiming to provide investors and stakeholders with a cross-company view of who is leading, who is lagging, and where the critical gaps are.

Having analysed the climate transition plans of these companies over the last three years, their journey shows a mixed picture, with companies showing some areas of improvement but also areas where they went backwards.

Compared to Planet Tracker’s 2025 assessment, progress on the sector’s core challenges remains limited. Scope 3 emissions represent between 70% and 84% of total sector emissions but are still largely unaddressed, while the link between capital allocation and measurable abatement remains unclear. Most notably, disclosure quality has deteriorated in some cases, signalling a growing gap between stated ambition and transparent, accountable transition strategies.

Analysis of the companies’ transition plans shows that:

• In 2025, leading the pack is Dyno Nobel, the only company that we assess as being compliant with the Paris goal of “well below 2°C” – indeed, we assess it as aligned with 1.5°C. At the other end of the scale, Dow and SABIC remain on 3°C pathways, characterised by modest operational targets, absent Scope 3 commitments and, in SABIC’s case, a regression in disclosure transparency.
• SABIC represents the most concerning trajectory, with Scope 3 reporting having completely ceased, eliminating potential accountability for 70% of the company’s total footprint.

The findings underline a growing challenge for investors and policymakers: distinguishing between stated ambition and deliverable transition strategies.

In conclusion, some companies are proving that a credible transition is achievable, while others are weakening disclosure, missing key emissions sources, or relying on targets that fall short of what science requires.

For investors, the implication is clear: climate credibility in the chemical sector can no longer be assessed on commitments alone. It requires scrutiny of three fundamentals: portfolio alignment, capital allocation, and the coverage of emissions targets. Without these, net-zero ambitions risk remaining largely theoretical.