Posted on May 28, 2026 by Audrey Magnuson
The Strait of Hormuz is not just a key shipping corridor for oil; it is a critical artery for the transportation of chemicals like fertilizers, sulfuric acid and plastics. The recent disruptions in the Strait show that while supply chain volatility creates economic and strategic risks for the United States, it also presents an opportunity to let America do what it does best: innovate fast. American innovators are creating critical, clean technologies to address the current vulnerabilities in the chemical supply chain, but they need supportive industrial innovation policy to scale these technologies.
History has shown that robust industrial policy has already helped the U.S. innovate around supply chain challenges again and again. Targeted public investments enabled the shale gas revolution, transforming the U.S. into the world’s top natural gas producer and insulating the country from global energy shocks.
On the chemicals front, however, the U.S. is not completely insulated:
The U.S. has a unique opportunity to accelerate chemical manufacturing innovation from the lab to commercialization, which requires industry investment and bipartisan policy support.
American innovators are already doing their part to develop next-generation production methods that reduce import reliance, reduce emissions and strengthen supply chains. To understand the scale of the opportunity ahead, it helps to examine three essential chemicals now facing mounting supply and production pressures: fertilizers, sulfuric acid and plastics.
Disruptions in the Strait have affected one-third of the fertilizers traded by sea, specifically nitrogen-based chemicals such as ammonia and urea. Nitrogen-based fertilizer prices are up over 30% from 2025, a market signal that Strait disruptions are no longer a distant shipping problem, but a cost impacting the agriculture sector. Alternative ports cannot sufficiently offset this supply, especially during the spring planting season when demand spikes.
In Texas, HyCO1 is unlocking new feedstocks to create hydrogen, a key building block for fertilizers. Their drop-in catalyst allows hydrogen producers to use CO2 and methane in existing production systems. This gives producers a lower-emissions, more flexible way to make this critical ingredient for fertilizers. FUEL, the Future Use of Energy in Louisiana program supported by the National Science Foundation, has partnered with HyCO1, exemplifying how federal RD&D programs can help innovators improve their drop-in solutions and quickly reach industrial producers.
Sulfuric acid is the most manufactured chemical in the world, and Gulf countries produce more than 24% of the seaborne traded supply. Manufacturers use it in batteries, petrochemical refining and critical minerals processing for copper and zinc, key inputs for America’s AI infrastructure and energy security. A shortage could ripple across the industrial base, and to prepare for these impacts, China has restricted its sulfuric acid exports, and other countries are moving to secure supply.
In New York, Travertine is creating a domestic, resilient source of sulfuric acid. Its electrolysis and recycling technology effectively turns industrial byproducts into valuable ingredients for manufacturing. At Travertine’s demonstration plant, the company captures CO2 from the air to use as a feedstock, processing the CO2 and local gypsum rock into sulfuric acid. Recognizing the benefits of this innovation, ARPA-E has partnered with Travertine to refine these technologies for critical minerals recovery.
While China is facing shortages and restricting sulfuric acid exports, the U.S. is creating new pathways to turn its industrial waste into valuable resources, and federal RD&D resources would provide the support needed to scale these technologies.
Petrochemicals are the building blocks of plastics, and Gulf countries now export both the petrochemicals and plastic polymers used in everyday goods. While the U.S. still leads in clean petrochemical production, today’s supply disruptions, combined with higher crude oil prices, are driving up the price of plastics.
In Tennessee, Trillium Renewable Chemicals is manufacturing homegrown, biobased acrylonitrile, a key petrochemical used in plastics, carbon fiber, and rubber goods. Trillium’s biobased process supports American farmers and avoids the impact of crude oil price swings, helping keep these goods affordable and made in America. The Department of Energy (DOE) was one of the first investors in Trillium’s technology, and now private dollars have followed. Trillium has completed a $13.3 million raise for its first commercial-scale demonstration plant, demonstrating the value of DOE’s tactical investments to accelerate technologies from the lab to demonstration.
While the Energy Act of 2020, signed into law by President Trump, modernized industrial innovation policy for the first time in over a decade, these authorizations will soon expire. Congress has the opportunity to renew Congressional direction authorizing industrial research and development and dedicated resources for chemical innovation. With the help of these policies, America can turn today’s chemical supply shock into tomorrow’s manufacturing advantage, creating lower-emissions products at home and selling them to the world.
