Heading Toward Near-Zero Industrial Nitrous Oxide Emissions

Nitrous oxide (N2O) is a greenhouse gas that is 273 times more powerful than carbon dioxide, and it also contributes significantly to ozone depletion. N2O is emitted from multiple sources, but there is one that presents an immediate opportunity for abatement: N2O by-product emissions from the industrial production of adipic acid and nitric acid. These industrial N2O emissions currently exceed 100 million metric tons of carbon dioxide equivalent (CO2e) per year and are projected to grow to between a quarter and a half gigaton of CO2e annually by midcentury. N2O emissions from adipic acid production in China account for the lion’s share of global industrial N2O emissions while the United States is the second-largest emitter of industrial N2O, due to unabated emissions from nitric acid production.

While abatement technologies are commercialized and cost-effective, the installation and operation of abatement equipment always adds some costs, and these can pose a barrier for chemicals producers to abate N2O in the absence of financial incentives or government regulations. The Kyoto Protocol’s Clean Development Mechanism—a carbon market mechanism—did attempt to financially incentivize industrial N2O abatement, but perverse incentives led to adipic acid market distortions, emissions leakage, and eventual cessation of N2O abatement at some adipic acid plants. Today, new guardrails are being proposed to utilize the voluntary carbon market to incentivize high-integrity industrial N2O abatement. 

While regulations that mandate industrial N2O by-product destruction would be the best way to ensure real, permanent abatement, high-integrity market mechanisms may be one method to incentivize abatement when regulations are politically infeasible by lowering the cost of abatement. Other actions to bring about industrial N2O abatement include multilateral efforts to encourage industrial N2O abatement, automotive manufacturers’ procurement of nylon that is made from N2O-abated adipic acid, and government trade policies that subject products with high embodied N2O emissions to import tariffs.