A carbon risk assessment for a chemical company A chemical company has two divisions: bulk chemicals

A carbon risk assessment for a chemical company A
chemical company has two divisions: bulk chemicals and speciality chemicals.
The company develops a scenario to investigate the carbon risks: what would the
impact on profit be if high carbon taxes are introduced? The turnover and
energy use data for the company in the base year are given in Table 15.2. The
company expects the bulk chemicals to be stable for the coming ten years,
whereas the specialities are expected to grow by 50 per cent in this period.

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a. What is the expected turnover, profit, and energy
consumption after ten years? Assume that the profit/turnover ratio stays the
same, and that the ratio of energy use to turnover for each of the two
divisions is reduced by 10 per cent in that period.

b. What are the associated Scope 1 and Scope 2 CO2
emissions? Assume that average fuel-related CO2 emissions are 75 kg/GJ
and that the emission factor for electricity is 150 kg/GJe .

c. What would be the value-at-stake in the case that CO2
emissions are taxed at a price of US$100 per tonne? How does that relate to the
expected profit?

d. To what extent can the carbon risks be reduced by (1)
moving the electricity demand completely to renewable sources; (2) reducing
energy use per unit of turnover by 30 per cent instead of 10 per cent; (3)
selling off half of the bulk chemicals division; (4) enacting all these measures
together?

 

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