Problem
The chemical industry produces more than 7% of all greenhouse gas (GHG) emissions on Earth. It makes the plastics in our bottles, the fibres in our clothes and the materials in our cars. Yet the companies that buy those chemicals, such as consumer goods brands, have no reliable way to account for, or reduce, the carbon locked into the products they sell. The emissions happen far up the supply chain, far from the brands that carry the responsibility.
Without a way to track and transfer emissions reductions, investment in low-carbon production stalls. Producers have no commercial reason to act. Buyers have no credible way to claim progress. The gap between climate ambition and real action stays wide open.
Science
Our research teams at Imperiaand ImperiaBusiness School built two things: the technical rules for measuring emissions reductions inside a chemical supply chain, and the commercial case for turning those reductions into something companies can buy and sell.
We designed a method for calculating how much carbon a producer saves when it installs carbon capture and storage (CCS, a process that captures COâ‚‚ before it enters the atmosphere and stores it underground). Those savings are packaged into tradeable certificates called Environmental Attribute Certificates (EACs). A producer generates EACs by cutting emissions. A buyer purchases them to reduce the recorded carbon footprint of their products. The two don't need to be directly connected in the supply chain. We tested the method using low-carbon ethylene production, drew on purchasing data from NielsenIQ/McKinsey (2023) and the NYU Stern Centre on Sustainable Business, and modelled the market opportunity across packaging, textiles, electronics and automotive sectors.
Outcome
The extra cost to brands is negligible. Switching to low-carbon plastic adds less than 0.35% to the wholesale price of a 1.5-litre water bottle, while cutting approximately 40% of that bottle's total emissions from manufacture and transport across Europe. For a smartphone, the extra cost is less than 0.01% of product value.
The commercial opportunity is large. We estimate the potential European market for low-carbon plastics at $124.8 billion across packaging, textiles, electronics and automotive. At full scale, the global insetting market for chemicals could reach $20 billion per year by 2035, delivering verified reductions of more than 200 million tonnes of COâ‚‚. Sustainably marketed products already grew 2.3 times faster than conventional products between 2013 and 2024, capturing 41% of total market growth despite holding only 24% of market share.
Change
Upstream chemical producers can begin piloting EAC issuance now using existing carbon capture technology. Downstream companies in sectors with high plastic use can start testing voluntary Scope 3 claims. No new infrastructure is needed to start.
The gap that remains is policy. No globally accepted standard for insetting credits yet exists. The research calls on the EU, the UK and other leading jurisdictions to create policy sandboxes and green procurement rules that recognise insetting as a credible emissions reduction pathway. Standard-setting bodies such as the Science Based Targets initiative (SBTi) are called on to develop early protocols.
The roadmap runs from bilateral pilot transactions in 2026 to a fully integrated global market by 2031. The challenge is not technology. It's coordination, investment and timing.