Conflicts between economic and low-carbon reorientation processes: Insights from a contextual analysis of evolving company strategies in the United Kingdom petrochemical industry (1970–2021)

To situate its low-carbon transition process in longer-term real-world business contexts, this article makes a longitudinal analysis of the UK petrochemical industry, focusing on changing economic and socio-political environments and company strategies in the last 50 years. Using the Triple Embeddedness Framework, the paper identifies two parallel and conflicting reorientation processes in the UK petrochemical industry. The first one, which started in the 1970s and is driven by long-standing competitiveness problems, led to retrenchment in the 1980s, exit of incumbent companies (BP, Shell, ICI) and the entry of new firms (INEOS, SABIC) in the 1990s and 2000s, and diversification into upstream fossil fuel production and ethane imports in the 2010s. The second reorientation process, which started in the 2010s, is driven by climate change considerations and has led petrochemical firms to reluctantly explore low-carbon alternatives. Despite advancing ambitious visions and plans, companies are weakly committed to low-carbon reorientation because this is layered on top of, and conflicts with, the deeper economically-motivated reorientation process. The paper further concludes that the industry's low-carbon plans and visions are partial, because they focus more on some innovations (hydrogen-as-fuel, CCS) than on other innovations (recycling, bio-feedstocks, synthetic feedstocks). Despite exploring alternatives, firms also use political resistance strategies to hamper and delay deeper low-carbon reorientation.