Mixed plastic waste and pyrolysis oil

HOUSTON (ICIS)–Australian global miner Rio Tinto has announced it will develop Pongamia seed farms in Australia as part of a new biofuels pilot and explore the potential of Pongamia seed oil as a feedstock for renewable diesel, a cleaner alternative to traditional fossil fuels. The company also wants to determine if it can contribute to Rio Tinto's renewable diesel needs while potentially contributing to the growth of a new biofuel sector in Australia. Pongamia is a legume tree native to Australia which is fast-growing, resilient and produces oil-rich seeds that can be processed into renewable diesel with the seed able to be harvested annually, leaving the trees and soil intact to store carbon dioxide. ​ Rio Tinto said it is in the final stages of acquiring approximately 3,000 hectares of cleared land near Townsville in north Queensland to establish farms to study growth conditions and measure seed oil yields. It has partnered with Midway Limited, to oversee the planting and management of the Pongamia seed farms and who will also engage with nurseries, agricultural experts and research organizations throughout the pilot. As part of its ongoing efforts to achieve net-zero Scope 1 and 2 carbon emissions by 2050, Rio Tinto is actively exploring the potential of biofuels in the low-carbon energy mix. The company said it sees biofuels as an avenue to reduce reliance on fossil diesel, while fleet electrification technologies mature. It is also investigating how biofuels could be used in scenarios where electrification may face practical limitations. “Diesel accounts for around 10 percent of our emissions footprint in Australia. While we continue to pursue electrification as the long-term solution for displacing the majority of our diesel use, the Pongamia seed pilot is an important parallel pathway that could reduce our reliance on diesel in the mid-term,” said Jonathon McCarthy, Rio Tinto Chief Decarbonisation Officer. “Australia does not yet have a biofuel feedstock industry sufficient to meet domestic demand. A sustainable biofuels industry here could enhance the region’s fuel security, create local economic opportunities and contribute to emissions reductions targets.” The company said this pilot follows a smaller-scale trial at Rio Tinto Gove operations in the Northern Territory where Pongamia saplings were planted to learn more about their response to low soil quality, heat and other climatic conditions in northern Australia.​

20-Sep-2024

LONDON (ICIS)–On 12 September Spain's Iberdrola and British oil and gas major BP announced that the two companies had taken final investment decision on their joint 25MW electrolyser project, which will produce renewable hydrogen to decarbonise BP's Castellon refinery operations in Spain.

20-Sep-2024

SINGAPORE (ICIS)–Thai conglomerate Siam Cement Group (SCG) plans to use ethane imported from the US as feedstock for its Long Son Petrochemical (LSP) complex in Vietnam to boost the project’s long-term competitiveness. Storage, supporting facilities for ethane to be built on site Ethane targeted as major feedstock for LSP cracker; C2 market “turbulence” expected LSP commercial operations start October SCG is in talks with a contractor for the new ethane storage project, with construction of the facilities expected to take about three years to complete, the company said in roadshow presentation on 16 September. “The site is equipped with a central utility system, ready for the installation of ethane gas storage tanks and pipelines,” the company said in a separate statement on 16 September. SCG has yet to finalize the capital expenditure for the project, and the prospective US ethane supplier for LSP was not disclosed. The $5.4bn LSP project in Ba Ria-Vung Tao province is Vietnam’s first integrated petrochemical complex and is 100%-owned by Thai conglomerate SCG. The mixed-feed cracker at the site currently uses propane and naphtha feedstocks imported from Qatar under a long-term supply deal. The cracker can produce 950,000 tonnes/year of ethylene; 400,000 tonnes/year of propylene; and 100,000 tonnes/year of butadiene (BD). SCG said that LSP is already operating flexible gas cracker which can use a variety of feedstocks, including ethane, propane, and naphtha. Ethane imported from the US is currently cheaper by $200-400/tonne than existing feedstock, SCG said, noting that the average price of ethane has been around 40% lower than that of naphtha and propane over the past three years. The feedstock derived from shale gas also provides greater price stability as it is linked to US natural gas prices, unlike naphtha, which is influenced by oil price fluctuations. FEEDSTOCK DIVERSIFICATION The enhancement to LSP's feedstock flexibility is part of SCG's efforts to bolster its chemicals business in the face of global oversupply, low demand and oil price volatility, SCG said. For ethylene (C2), the company expects "future turbulence" in the market, especially in 2027-2028 amid a wave of new global cracker additions, especially in China. Global ethylene supply is projected by SCG to grow at a slower average rate of around 3-4% in 2025-2030, compared with 5% in 2019-2024. China will comprise around 53% of new ethylene supply additions in 2025-2030, it noted. SCG expects an "extended chemicals trough with low margin" in 2025-2030 amid continued naphtha price volatility. “The current global situation and the future outlook over the next 2-5 years will be marked by increased volatility,” SCG CEO and president Thammasak Sethaudom said on 16 September. “All SCG businesses are moving forward with strategies that align with these dynamics while also reducing carbon dioxide emissions…to ensure long-term competitiveness.” LSP COMMERCIAL OPERATIONS START OCTOBER The LSP complex has completed performance test runs in September and is on track to start commercial operations next month, according to SCG. Its utilization rate following start-up will be "determined by global demand dynamics", it said. LSP’s downstream plants include a 500,000 tonne/year high density polyethylene (HDPE) unit; a linear low density PE (LLDPE) unit of the same capacity; and a 400,000 tonne/year polypropylene (PP) unit. The cracker had an outage in February due to a technical issue and resumed normal operations in August. It had declared a force majeure in February due to issues at the cracker that also shut its downstream PE and PP units. Credit ratings agency Fitch Ratings in a note on 17 September said that it expects LSP to ramp up its utilization rate to 70-80% in 2025, “supported by its cost competitiveness versus imports and the flexibility to use both propane and naphtha as feedstock”. Imports currently fulfil nearly all of Vietnam's petrochemical requirements. Focus article by Nurluqman Suratman Thumbnail photo: Aerial view of SCG's Long Son Petrochemical Complex in Vietnam (Source: SCG)

19-Sep-2024

HOUSTON (ICIS)–Singapore-based SACL has identified sites in Australia where three biofuel plants could be built that would use process technology provided by Comstock, the US-based company said on Wednesday. A site in southeastern Australia could accommodate a 250,000 tonne/year renewable refinery, Comstock said. One in northwestern Australia could be home to another 250,000 tonne/year renewable refinery, the company said. The eastern coast of northern Australia could have a 750,000 tonne/year renewable refinery, Comstock said. If built, the three refineries would have total costs of $2.4 billion and produce 160 million gallons/year (606 million liters/year) of gasoline, sustainable aviation fuel (SAF) and other renewable fuels from biomass as well as 140 million gallons/year of renewable fuels from vegetable oils. SACL also signed an exclusive marketing agreement for Comstock's processes in Australia and New Zealand. Comstock's process technology works as follows: It digests and fractionates biomass. Cellulose is converted into ethanol. Lignin is converted into mixture of hydrocarbons that Comstock calls Bioleum. The Bioleum is converted into a deoxygenated oil by using hydrogen. The oil is refined into fuel. Gas-to-liquids emissions are captured and converted into fuel.

18-Sep-2024

HOUSTON (ICIS)–The Federal Reserve lowered its benchmark interest rate by a half point to 4.75-5.00% on Wednesday, and the central bank could lower it by an additional half point by the end of the year. The following table summarizes the current and past forecasts for rates, inflation and GDP by members of the Federal Reserve. 2024 2025 2026 Fed funds 4.4% 3.4% 2.9% June forecast 5.1% 4.1% 3.1% GDP 2.0% 2.0% 2.0% June forecast 2.1% 2.0% 2.0% Core PCE Inflation 2.6% 2.2% 2.0% June forecast 2.8% 2.3% 2.0% Source: Fed If the forecasts hold true, the US economy will achieve a soft landing, with inflation falling to the Fed's long-term goal of 2% without triggering a recession. FED NOTES WEAKER JOB MARKET, INFLATIONThe Fed said that the job market had slowed since the last time it voted on rates at the end of July. Inflation has moved closer to the Fed's goal but remains somewhat elevated. Unlike its previous statement in July, the Fed said it "has gained greater confidence that inflation is moving sustainably toward 2%". In addition, the Fed stressed its commitment to support maximum employment. Its last statement in July lacked such a statement. CHEMS WILL WAIT BEFORE RATES TRIGGER RECOVERY IN DURABLESChemical producers will have to wait before lower rates cause a recovery for demand in durable goods and housing. Both are key end markets for polymers such as polypropylene (PP), nylon, acrylonitrile butadiene styrene (ABS) as well as chemicals used to make polyurethanes, such as isocyanates, polyols and propylene oxide (PO). Huntsman said the lag is typically about two quarters. Ultimately, mortgage rates will need to approach 5% before markets for homes and durable goods can recover, according to Dow. Higher rates had made housing and durable goods like furniture and appliances less affordable. Because fewer consumers are buying homes and moving, they are purchasing fewer durable goods. LOWER RATES TEND TO BOOST OIL, CHEM PRICESTypically, prices for oil and other dollar-denominated commodities tend to rise as US interest rates fall. A rise in oil prices typically causes those for petrochemicals to increase. Margins for US-based producers benefit from higher oil prices because their plants predominantly rely on gas-based feedstock. By contrast, much of the world relies on oil-based naphtha, giving US producers a cost advantage. FIRST CUT IN MORE THAN FOUR YEARSThe last time the Federal Reserve lowered interest rates was in March 2020, during the COVID-19 pandemic. Lockdowns, government stimulus and recovery caused a surge in inflation, which led the Federal Reserve to begin raising the benchmark rate two years later in what became the most aggressive tightening campaign in more than 40 years. The Fed stopped raising the rate in July 2023. A year later, inflation started showing signs of approaching the Fed's target of 2%. At the same time, the labor market began cooling off and returning to more normal levels. Focus article by Al Greenwood Thumbnail shows money. Image by ICIS.

18-Sep-2024

SAO PAULO (ICIS)–The likely increase in Brazil’s import tariffs for dozens of chemicals will start improving beleaguered domestic producers’ poor margins even though petrochemicals prices remain low, according to an analyst at US credit rating Fitch. Marcelo Pappiani, credit analyst for Brazilian chemicals producers, added that imports into Brazil and the wider Latin America remain high and are likely to continue that way as China and the US work through their overcapacities. Despite that, prices have stabilized, albeit at low levels, and “the worst of this downturn” seems to have subsided, said Pappiani. The two largest chemicals producers in Brazil, polymers major Braskem and chlor-alkali and polyvinyl chloride (PVC) producer Unipar, are covered by Fitch. The two companies have posted several quarters of poor financial results on the back of low prices and competition from overseas producers. TARIFFS UPBrazil’s chemicals producers – represented by trade group Abiquim, in which Braskem has a commanding voice – were hoping the Brazilian cabinet would increase import tariffs on dozens of chemicals in September. However, there have been contradictory reports on this, with some expecting the hike to be approved as soon as Wednesday (18 September), while other reports citing government sources have said the decision would be pushed back to December. The increases would follow a public consultation earlier this year in which Abiquim as well as individual companies proposed increasing tariffs in more than 100 products, most of them from 12.6% to 20%. Braskem is, at the same time, partly owned by the country’s state-owned energy major Petrobras, so the Abiquim/Braskem lobbying tandem tends to find open ears in the corridors of power in Brasilia under the current government, which has committed to expand the industrial sector. Pressure not to increase import tariffs has also been strong from other sectors, not least plastic transformers represented by Abiplast, but the producers’ proposals are expected to have won the day. “Petrochemicals prices in Brazil and the wider Latin America seem to have reached the bottom and we are seeing slightly less pressure on companies, despite of course still imports coming into the region in big numbers, from China, the wider Asia and the US,” said Pappiani. “Companies have lobbied the government strongly for an increase in import tariffs as well as other measures to prop up the chemicals industry. Import tariffs seem set to increase and that should soon make Brazilian producers more competitive.” Pappiani is in no doubt higher import tariffs in several chemicals – when around half of the Brazilian industry’s demand is covered imports – are likely to translate into higher prices for consumers, precisely the reasoning used by those who oppose the hike. “President Lula has said he wants to foster the chemicals sector and has met on several occasions with CEOs from the industry as well Abiquim,” said Pappiani. “But, of course, consumers will end up paying for higher import tariffs – this happens in all economic sectors, not just petrochemicals, of course.” COMPETITIVENESS THROUGH TARIFFSAs well as higher prices for consumers, those opposing the hike in import tariffs argue that Brazilian petrochemicals producers should speed up their modernization and diversification, so they are not as dependent on government policy for their profitability. Pappiani said Braskem is a well-managed company with international assets which would make it a profitable enterprise even without government measures which prop up its competitiveness in its domestic market. However, critics of protectionist measures continue their campaign against the increase in import tariffs, although according to most analysts the dice has been cast. On Tuesday, the president of Abiplast published a charged article in Brazil’s daily Estadao in which he wondered if Braskem would always need state indirect help to keep afloat, even if its second largest shareholder is Petrobras, which in theory should make accessing cheaper raw materials easier. “Why are foreign suppliers of petrochemical products able to be more competitive in their exports to Brazil, even bearing the costs of transportation, logistics and exposure to exchange rate variations? Over the past 40 years, we have exported many of these products to China; if the Chinese (and other countries) become competitive by importing Brazilian oil, why can't Brazilian [petrochemicals] producers become competitive?” said Jose Ricardo Roriz Coelho. “The exaggerated protection of the few petrochemical companies in Brazil results in them directing investments to countries where they face greater competition in order not to lose market share. Europe, which is not competitive due to its lack of raw materials for petrochemicals, has chosen to add value further down the production chain by importing resins from countries that are more efficient in production. “Structural problems, such as insufficient supply of inputs, cannot be solved with short-term remedies. The debate on new tariffs and the production chain is crucial,” concluded Roriz. Indeed, the prospect of high import tariffs being approved as soon as this week has already propped up Braskem’s market capitalization in the past few weeks. On 13 September, for instance, the company’s stock rose by nearly 8% as investors expect an imminent decision on the increase in import tariffs, according to a report by InfoMoney. The increase in import tariffs could automatically translate into higher earnings before interest, taxes, depreciation, and amortization (EBITDA) for Braskem, to the tune of $300 million/year, according to some analysts. Under current business conditions, that would be roughly the same EBITDA amount the producer posted in the second quarter of this year. “In our view, this additional tariff would help contain Braskem’s cash burn in recent quarters. The company would then be better positioned to capture a future cycle of increases in petrochemical spreads,” said analysts at XP cited by InfoMoney. Front page picture: Facilities operated by Brazilian polymers major Braskem in the state of Sao Paulo Source: Braskem Interview article by Jonathan Lopez 

17-Sep-2024

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which suggests OPEC+ risks losing control of oil markets. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. Paul Hodges is the chairman of consultants New Normal Consulting.

17-Sep-2024

HOUSTON (ICIS)–The US Department of Energy (DOE) has announced a conditional commitment for up to $1.559 billion to Wabash Valley Resources to help finance a commercial-scale waste-to-ammonia production facility using carbon capture and sequestration (CCS) technology. The government funding would be part of a total investment of $2.4 billion that Wabash Valley Resources would secure for the project through private investment. Located in West Terre Haute, Indiana, the project is being planned to produce 500,000 tonnes of anhydrous ammonia annually and permanently sequestering 1.6 million tonnes of carbon dioxide annually. Officials said it will have the potential to be the world’s first, carbon-negative ammonia production facility and that the company would be repurposing an industrial gasifier to utilize petroleum coke. This will be the US’ first efforts to utilize petroleum coke to produce ammonia and store the associated emissions via permanent geologic sequestration. Wabash Valley Resources said it is their intention to demonstrate a commercially and environmentally viable end-use alternative for petroleum coke, which is a waste product generated during the oil refining process. Officials said this project would play a critical role in securing domestic fertilizer supply for the region commonly known as the Corn Belt, contributing to both food security and climate goals. This low-carbon ammonia would be cost-competitive compared to existing ammonia imports, helping to drive down costs for local businesses and consumers. It was noted that while ammonia fertilizer is a crucial element of the US agricultural system, its production is a significant contributor to climate change. Globally, the manufacturing of the nutrient accounts for 1% to 2% of all carbon dioxide emissions. Through this project, Wabash Valley Resources is striving to reduce the agricultural industry’s emissions. In addition to its environmental benefits, the project is expected to create 500 construction jobs and 125 operations jobs.

17-Sep-2024

HOUSTON (ICIS)–Gevo has received a patent for its process that converts ethanol into olefins in a single step, providing another way to make propylene from renewable feedstock, the US-based renewable chemicals producer said on Monday. The patent, No 12,043,587 B2, addresses the company's process that relies on catalyst combinations for the process, which can make propylene and butylenes, which are also known as butenes. Gevo had licensed the technology to LG Chem. Chemical companies have had limited ways to produce propylene or butylenes from renewable feedstock. Technology already exists to dehydrate ethanol to produce ethylene. Companies could then convert the ethylene to propylene through a metathesis unit, but that would require an additional step and another plant, which would increase costs. Another route is to hydrotreat natural oils and used cooking grease to produce renewable naphtha. That naphtha could then be cracked in traditional ethylene plants to produce olefins and aromatics. This process faces possible feedstock constraints if companies wish to use nonfood feedstocks. Already, oleochemical producers that rely on tall oil have had to compete with renewable diesel producers for feedstock. Gevo did not compare the costs of its process to these existing ways to make propylene and butylenes from renewable sources.

16-Sep-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 13 September. INSIGHT: Wall Street reaction to Methanex/OCI deal negative on valuation, leverage Methanex’s announcement that it will acquire OCI Global’s international methanol business for $2.05 billion drew a swift negative initial reaction, with its stock price plunging 7.9% at the close of its first day of trading after the announcement. Storm Francine veers path, could potentially hit petchems hubs in west Louisiana Storm Francine continues strengthening into a hurricane as it approaches the southern costs of the US, but its path could veer slightly west and potentially hit key petrochemicals sites in Louisiana which border with Texas. US chem, oil operations begin shutting ahead of storm Francine Some chemical and upstream oil and gas companies are shutting down operations ahead of Tropical Storm Francine, which is expected to strengthen into a hurricane on Tuesday night and make landfall along the US coast of Louisiana on Wednesday or Wednesday night. Francine strengthens into hurricane, heads for US Gulf Coast Francine has strengthened into a hurricane and is moving northeastward across the Gulf of Mexico, with landfall expected in Louisiana, US, on Wednesday afternoon or evening. Louisiana chemical plants shut down as Hurricane Francine nears landfall, major capacities at risk Several chemical companies are shutting down plants in Louisiana, with others taking other precautionary measures as the eye of Francine – now a Category 2 hurricane – approaches the coast for imminent landfall. Hurricane Francine passes over Louisiana parish with many chem plants Ascension parish, home to Geismar and its many chemical plants, was among the regions hardest hit by Hurricane Francine, which has caused hundreds of thousands of power outages. SHIPPING: Asia-USEC container rates plunge by 20% as shippers avoid possible ILA strike Average global rates for shipping containers fell significantly this week, including a 21% decrease from Shanghai to New York, as shippers are shifting cargo deliveries to the US West Coast to avoid the planned strike on 1 October.

16-Sep-2024