Carbon Neutrality In Chemical Process Design: The Pinch Design Concept and Options Trading Strategies

ABSTRACT

Large scale chemical process design projects in the future will likely have to account for stricter government mandates on reducing carbon emissions from manufacturing processes. To reduce energy consumption, as well as carbon dioxide emissions into the atmosphere, chemical engineers will increasingly need to apply ‘pinch concept' design procedures to integrate processes, in order to most efficiently use energy. This will often lead to new designs, or ideas for retrofitting current processes, all of which will require potentially large scale capital investment in the process. Companies will then face the choice of making these pollution remediation investments or take their chances on the ‘carbon credit' options trading market to offset any of their emissions that go beyond legally mandated limits. This will be an entirely new professional design responsibility for the chemical engineering profession. Our talk will discuss this issue with chemical process flowsheet examples analyzed in the context of the celebrated Black-Scholes equation for pricing carbon credit options.