Oleochemicals: Low glycerin price drives new uses

16 August 2010 00:00  [Source: ICB]

New applications are needed to help glycerin's current historically low price

Research and development (R&D) for new glycerin applications is strengthening, driven by continued low glycerin prices worldwide.

Global refined glycerin prices continued to plunge after reaching a peak of $1/lb ($2,205/tonne, €1,667/tonne) during the first half of 2008.

ICIS assessed this year's third-quarter (Q3) vegetable glycerin contract prices in the US at 33-42 cents/lb FOB (free on board) Midwest, down by 1-3 cents/lb from Q2 contracts.

July glycerin contract prices in Asia bottomed to 23-24 cents/lb, delivered, Southeast Asia, while ICIS assessed the Q3 European contract price for vegetable glycerin at 24-27 cents/lb, FD (free delivered) NWE (Northwest Europe).

Industry players in the three regions cite oversupply, especially from Asia, and languid demand as the main drivers behind continued soft glycerin pricing.

Average US glycerin prices already declined by 67% compared with 15 years ago - mostly because of biodiesel, said Darol Brown, US head of consulting firm HBI. Brown spoke at the American Oil Chemists Society (AOCS) annual meeting in May, held in Phoenix, Arizona, US. Glycerin is a by-product of biodiesel and co-product of fatty acid production.

"In the past, glycerin has been traded as a normal chemical additive but with the advent of biodiesel production in Europe at first, and now the US, South America and Southeast Asia, glycerin has fallen to the lowest prices in the history of glycerin production," said Brown.

"Cheap, plentiful glycerin has spawned new markets as a raw material, and this will undoubtedly continue if the extreme overproduction of glycerin from biodiesel continues," he added.

Microbial fermentation presented opportunities to use glycerin as feedstock in the production of several novel surfactants, as well as well-established chemicals.

Texas, US-based biochemical company Glycos Biotechnologies will soon commercially produce crude glycerin-based ethanol, isoprene and acetone in a 20,000-40,000 tonne/year biorefinery being built in Nusajaya, Iskandar, Malaysia. The facility is expected to be completed in early 2012.

ECONOMIC BENEFIT
"In fermentation processing, there's an economic advantage in the use of crude glycerin as feedstock compared to sugar," said Glycos Biotechnologies CEO Rich Cilento. "The average price of crude glycerin now is around $140-$180/tonne [€108-140/tonne]. You are looking at twice the cost for sugars," he added.

Cilento noted that Malaysia is a perfect fit for the company to rapidly implement its technology, as well as have easy access to oleochemical and biodiesel producers.

GlycosBio's technology was originally developed by researchers from Texas, US-based Rice University. During the AOCS conference, lead researcher Ramon Gonzalez said GlycosBio was able to convert crude glycerin into succinic acid, lactic acid, formic acid, 1,2 propanediol (PDO) and hydrogen using the e.coli bacteria strain.

Researchers from the US Department of Agriculture (USDA) also presented at the conference their development of glycolipid surfactants sophorolipids and rhamnolipids by fermenting either crude or refined glycerin. The surfactants are being developed in detergent application as an alternative to phosphate.

According to the USDA, companies currently involved in the development and marketing of sophorolipids include Belgium-based Ecover, France's Groupe Soliance, Saraya of Japan and South Korea-based MG Intobio.

US-based Jeneil Biosurfactant is currently marketing rhamnolipids in a biofungicide called ZONIX, as well as a biosurfactant called RECO for use in cleaning and recovering oil from storage tanks.

US consumer goods producer Procter & Gamble (P&G) also noted at the AOCS conference its development of 2-amino-1-propanol (2AP) via catalytic transformation of glycerin. P&G said the process offered a route to an amino alcohol that was not readily available in the market.

"This chemistry provides a market opportunity to convert glycerin to a value-added product, 2AP - an amino alcohol with wide-range application potential," said P&G senior scientist Victor Arredondo.

"It offers a more attractive outlet for glycerin in a world of supply/demand imbalance and depressed pricing versus when it is used for animal feed, burn value and other disposable applications," he added.

P&G said it had had an active R&D program in the development of value-added uses for glycerin for several years. It claims to be the world's largest producer of USP-grade glycerin.

AROUND THE CORNER
The global market is expecting a boost of demand coming from the use of glycerin as feedstock for propylene glycol (PG) production and epichlorohydrin (ECH).

At its Q4 earnings update late last month, US agribusiness major Archer Daniels Midland (ADM) reported a continuing delay in the start-up of its 100,000 tonne/year glycerin-based PG plant in Decatur, Illinois, US. The facility was originally planned to start in December 2009. ADM said it was working through start-up issues and should be fully operational by the end of the year.

US chemical majors Huntsman and Dow Chemical have also announced their intentions to make PG from glycerin, but no recent updates were given regarding plans for this project.

Glycerin-based ECH projects are progressing slowly as well.

Thailand-based vinyl and chlor-alkali producer Vinythai is building a 100,000 tonne/year glycerin-based ECH project in Mab Ta Phut, which will use Solvay's Epicerol technology. The project was first announced by Belgium-based chemical company Solvay in 2007 and was expected to start late last year. The plant is now scheduled to operate in the first quarter of 2012.

Solvay has already been producing glycerin-based ECH at its 20,000 tonne/year facility in Tavaux, France, since 2007. At the 14th ICIS Asian Chlor-alkali Conference in Shanghai, China, held in June, Solvay said it also planned to have a 100,000 tonne/year glycerin-based ECH plant in China by 2014.

"There is a large concentration of downstream liquid epoxy resin producers in China who are now looking for reliable ECH suppliers, wishing to avoid a repeat of the current volatility plaguing the market," said Bruno Jestin, senior vice president and head of Solvay's chlorinated organic products business unit.

"Epicerol plants in Thailand and China will reinforce each other and the initiative is fully aligned with the Chinese government's promotion for sustainable technologies," Jestin said.

Chinese chemical company Jiangsu Yangnong Chemical is currently producing glycerin-based ECH at two facilities, each with a capacity of 30,000 tonne/year both located at Yizheng in eastern China's Jiangsu province.

Czech epoxy resin producer Spolchemie also intends to expand its focus on glycerin-based ECH production with a facility planned in Malaysia. Capacity of the plant was not disclosed, although one industry source said it was around 50,000 tonnes/year.

The glycerin-to-ECH plant was expected to start up in Q3 2009, but financial difficulties forced the company to reconsider. Spolchemie is currently producing glycerin-based ECH at its 15,000 tonne/year plant in Usti nad Labem, Czech Republic.

Another European producer, Poland-based chemical company Zachem, announced last month that it planned to build a glycerin-based ECH plant in the region, expected to start in December 2011. Capacity of the plant was not disclosed.

Additional reporting by Stephanie Wilson and Ila Halain in London, Ben Lefebvre and Judith Taylor in Houston, and Serena Seng in Singapore

GLOBAL GLYCERIN DEMAND, '000 SHORT TONS
2007 2008 2009 2010E
Consumer Care 800 830 750 780
Technical 420 400 300 330
Substitution of MEG 0 30 60 70
Substitution of Sorbitol 0 10 10 10
Animal feed 170 100 130 150
Incineration 134 86 70 20
BioGas 50 100 300 300
ECH 30 50 80 100
MPG 10 10 20 50
Biomethanol 0 20 70 140
Acrylic acid 0 0 20 40
TOTAL 1,614 1,636 1,810 1,990
% Increase 5.0% 1.4% 10.6% 9.9%
Source: Croda, 2009 ICIS Oleochemicals conference


By: Doris de Guzman
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