SABIC eyes chemical deliveries by rail to cut emissions

Interview article by Tahir Ikram

SINGAPORE (ICIS)–Saudi Arabian producer SABIC plans to deliver chemicals and polymers to its customers through rail transport as a means to reduce its carbon footprint, a company executive said.

Currently, the petrochemical giant moves its products via trucks.

 “The mode change to rail will reduce CO2 [carbon dioxide] emissions by 48,000 metric tonnes per annum,” Mark Tarrant, Asia head of global supply chain centre of excellence at SABIC, told ICIS in an e-mail interview.

The company has not finalised a timeframe to make the change but Tarrant said: “The migration will definitely take place as we expect it to shorten the journey to our markets.”

In November last year, SABIC took out a long-term charter for the world’s first low emission gas carriers to cut the environmental impact of chemical transport.

The new ships that have a cargo capacity of 4,768 cubic meters will reduce nitrogen oxide (NOx) emissions by more than 85%, with sulphur oxide (SOx) and soot particles reduced by nearly 100% and CO2 by 20%, based on a SABIC fact sheet provided to ICIS.

Tarrant said SABIC has an ambitious supply chain sustainability programme, which includes exploring the possibility of extending Saudi Arabia’s rail network to selected neighbouring countries.

“There is also a programme in Europe to move product from truck to barge in order to minimize carbon footprint and reduce congestion on the road,” he said.

Based on an agreement between SABIC and Saudi Railways Co, an annual 200,000 truck deliveries of metals will be replaced by 2,700 rail deliveries, thus improving road safety and fuel efficiency by 47%.

SABIC expects similar proportional reductions to be realized for polymers and chemicals businesses as they migrate to rail in the longer term.

In 2013, SABIC took some steps to reduce carbon emissions that included adding three new shipping lines at the Jubail Commercial Port and transport a record 2.5m tonnes of polymers through the port.

The move has translated to a reduction of 300,000 trucks on the road to Dammam port in that year, effectively cutting CO2 emissions by up to 100,000 tonnes, as well as diesel consumption by up to 30m litres, according to SABIC.

In the same year, the company leased an 81,000-dead weight tonne (DWT) chemical tanker from the National Chemical Carriers (NCC), to beef up its capacity to ship out products to customers.

“The SABIC’s chemical-business-dedicated vessel is the largest, most sophisticated chemical carrier in the world, increasing SABIC’s loading capacity per voyage by 67%, compared with standard vessels completed a similar number of voyages per annum,” it added.

With this vessel, the company will reduce operating cost, reduce fuel consumption by up to 46% and cut CO2 emissions by approximately 16,500 tonnes per year compared with using smaller vessels, it added.

Tarrant said one of petrochemical industry’s biggest challenge was to adopt sustainability concept and what it entails.

“This is even more important given the industry also accounts for almost 5% of global greenhouse gas emissions,” he said.