A systems engineering model has been developed for the global petrochemical industry, named FREAK (FoReign trade Effect Assessment Kit). FREAK has been developed for the analysis of the impact of CO2 taxes on the international trade and the global production structure. A life cycle approach has been applied for 50 petrochemical products and a broad range of emission reduction strategies have been considered. The scope of the policies has been varied (which countries apply the tax) and the policy ambition has been varied (the tax level). The results show that the regional distribution of the petrochemical production will not change significantly in case global policies are introduced. However, the regional distribution will change significantly if only a limited number of industrialised countries introduce a tax. The regional impact of such a tax depends on the carbon accounting approach for intermediate petrochemical products trade. The impacts can even be positive for the industry within the policy region. The techno-economic potential for emission mitigation is significant, even from a global perspective. The physical production volume increases threefold between 1995 and 2025. In the base case (BC) without policies, emissions increase by 65% to 970 Mt CO2 in 2025. Global greenhouse gas (GHG) policies could halve these emissions. A 20% reduction (approximately 200 Mt) can be achieved in case developing countries and oil exporting countries do not participate in emission reduction.
