07 November 2011 00:00 [Source: ICB]
Brazil is the world's largest sugarcane producer and is beginning to use it as a petrochemical feedstock
Brazil's sugarcane ethanol industry is attracting the attention of chemicals producers in search of renewable feedstocks. Brazilian resins producer Braskem is producing polyethylene (PE) from ethanol-derived ethylene in Brazil, and US-based Dow Chemical is implementing an integrated sugarcane-to-PE project in the country with Japan's Mitsui & Co.
Brazil is the world's largest sugarcane producer and the second-largest bioethanol producer, after the US. The government began to push the use of ethanol as a vehicle fuel in response to the oil crisis in the 1970s, creating the conditions for ethanol's penetration into Brazil's transport fuel market. Flex-fuel vehicles represent more than 90% of new car sales.
The ethanol fuel program is based on efficient agricultural and ethanol production technology, and the residual sugarcane waste, known as bagasse, is used to produce heat and power. So Brazilian ethanol is competitively priced, and has a lower carbon footprint than the corn-based ethanol produced in the US.
It's no accident that Brazil's sugarcane ethanol has such high yield rates and sustainability credentials, says Luis Cirihal, business director for renewable alternatives and business development in Latin America at Dow. "The country has cultivated the development of this industry to the point that today you have a sugar and ethanol industry that is sustainable and competitive against fossil fuels," he says.
"It's not that there is something magical about sugarcane per se. It's the combination of the sugarcane and the development of the technology that took place in Brazil - driven by public policy as well as by private investment."
Also, the Brazilian ethanol industry does not compete with food crops for its feedstock, says Luiz de Mendonca, executive vice president for Braskem's international business. The agricultural land used to grow sugarcane fields accounts for less than 5% of Brazil's total arable space, he says, and the amount of ethanol that will be required for chemicals production is minimal. Braskem's green PE production uses only 2-3% of Brazil's ethanol production capacity, adds Mendonca, who is responsible for Braskem's bio-based chemicals business.
The limited availability of petrochemicals feedstocks in Brazil adds to the attractiveness of sugarcane ethanol. Multinational chemicals producers are keen to take advantage of Brazil's booming economy and the expected growth in chemicals demand as the country invests in infrastructure to host the soccer World Cup in 2014 and the Olympics in 2016.
Investing in emerging economies is a key part of Dow's growth strategy, says Cirihal. "An ethanol base in Brazil is viable and also addresses the limitations relative to obtaining ethylene from fossil fuels," he adds.
For Braskem, part-owned by Brazilian state-owned energy group Petrobras, access to feedstocks is less of an incentive. Braskem has a network of production sites in Brazil and is partnering Petrobras in the country's next large-scale petrochemicals investment, the Comperj refinery and petrochemicals project in Itaborai in the southeastern state of Rio de Janeiro. Bio-based products make up a growth area for Braskem, Mendonca says, and demand for green PE products has surpassed the firm's expectations. There has been interest from consumer goods companies seeking packaging materials with a low carbon footprint.
Braskem, which is 38.1%-owned by Brazilian engineering and construction conglomerate Odebrecht and 35.9% by Petrobras, with much of the balance publicly held, has led the way with its sugarcane-to-PE production. Last year it started up an ethanol dehydration plant at its Triunfo complex in Rio Grande do Sul, southern Brazil, and the bio-based ethylene output is used to produce up to 200,000 tonnes/year of green PE at existing plants at the site. Ethanol is provided by various suppliers, including Odebrecht subsidiary ETH Bioenergia.
Braskem is also implementing a small bio-based propylene project to produce green polypropylene (PP), and is studying a second green PE project. Like the Dow/Mitsui green PE project, Braskem's next green PE scheme will be fully integrated, says Mendonca.
For Braskem's first project, building a sugarcane mill and planting sugarcane would have taken too long. Fast-tracking the scheme through a non-integrated approach has enabled it to be the pioneer in the industry, and launch its product about five years before ones from the Dow/Mitsui joint venture are expected to reach the market, says Mendonca.
"We made our mistakes ahead of everybody else, allowing us to correct them. We will be ahead of the learning curve."
One lesson that Braskem learned was to view the material as a biopolymer that would compete with existing biopolymers such as poly-lactic acid (PLA), says Mendonca. "We have a biopolymer. And my competition is other biopolymers, not the fossil-based resins."
Testing the market through the early introduction of green PE also made Braskem realize that the requirements of each biopolymer customer are very specific. "It is still a niche approach - a product more suitable to certain applications and segments," Mendonca adds.
Braskem's green PP project is also designed to test the market. The company intends to produce about 30,000 tonnes/year of bio-based propylene feedstock for the project from ethylene, using dimerization and metathesis technologies. But larger scale green PP capacity will need to use a dedicated on-purpose technology route for propylene production to be competitive, notes Mendonca.
The company is also developing a small-scale project to produce 1.4m litres/year of naphtha from post-consumer recycled plastic in at its Camacari complex in Bahia, northeast Brazil, in partnership with local firm Novaenergia.
In the longer term, Braskem, intends to diversify into other renewable chemicals and materials, such as butadiene and isoprene. Green PVC, however, is not of interest to Braskem because it cannot be 100% renewable, Mendonca says.
Solvay is studying a bio-based PVC facility in Brazil which is expected to have the capacity to produce 60,000 tonnes/year of bioethylene for conversion into PVC.
Dow and Mitsui are implementing their 50:50 sugarcane-to-PE project in phases. The joint venture has an existing agricultural operation in Santa Vitoria in Minas Gerais, southeast Brazil, which was developed after the project was initially conceived by Dow in 2007/2008. The next two phases of the project will involve:
Augmentation of the supporting sugarcane farm fields and construction of the first ethanol mill, which will deliver 240m litres/year of ethanol capacity and will be one of the key supply points for the whole project. Construction of the mill is underway and production is set to begin in the second quarter of 2013.
Doubling the ethanol capacity plus construction of an ethanol dehydration unit to produce ethylene and a polymerization unit based on Dow's solution PE technology. This stage of the project is under negotiation.
"We are aggressively increasing our sugarcane capacity and now driving forward with the beginning of construction of the first ethanol mill at the site," Cirihal says. The PE plant is expected to have a capacity of at least 350,000 tonnes/year and begin operations in 2015. More precise details of the second phase of the project will be determined in the second quarter of 2012.
The facility will primarily produce performance linear low density polyethylene (LLDPE) and high density polyethylene (HDPE) biopolymers for the high-performance flexible packaging and hygiene and medical markets. Output will be supplied globally, although a significant amount could be sold in Brazil and the rest of Latin America, Cirihal says.
Any price premium would ultimately be dictated by market demands. "We do not know what the long-term premiums will be, but we clearly see today an unsatiated market," he adds.
Dow will reap the benefits of an integrated operation. Vinasse, a residual post-distillation waste stream from the sugarcane juice, will be used to irrigate the fields and provide additional nutrients. "By having the dehydration unit in the field, we are removing water and returning water exactly where it's needed - back into the field," says Cirihal.
Dow will also use the sugarcane's cellulosic content, bagasse, for power generation, allowing the site to be self-sufficient in electricity and steam. In the future, Dow intends to use bagasse as feedstock for ethanol production. Cellulosic ethanol technologies are being developed around the world as part of efforts to avoid competition with food crops. While such competition is not a problem for Brazil's ethanol industry, these second-generation technologies can enable increased yields.
In October, Chemtex, M&G's engineering subsidiary, announced plans to build the first industrial-scale cellulosic ethanol plant in Brazil. The project, a collaboration with Brazilian entrepreneurial group Graal Investimentos, is expected to start up by 2013. The partners said they intend to develop and produce biochemicals as well as biofuels.
And just last month US-based Cobalt Technologies, a developer of next-generation bio-based chemicals, and France's Rhodia, announced a Memorandum of Understanding for a strategic alliance to develop bio-n-butanol refineries throughout Latin America
"If second-generation technologies were viable today, you could potentially increase Brazil's ethanol production by 30% overnight. And the country is hungry for more ethanol," says Cirihal. For Dow, using second generation technologies would provide the opportunity to produce other bio-based derivatives, he says.
"We will be building a substantial base within Brazil, and there are significant opportunities to expand in the country," he says.
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