DUBAI (ICIS)--SABIC is planning to build a demonstration plant in Europe to transform waste plastic into feedstock for its crackers as part of the company's strategy to further advance its circular economy model for the business, a senior company executive said on Wednesday.
The new demonstration plant is intended to be built at its Geleen manufacturing site in The Netherlands, according to Abdulrahman Al-Fageeh, SABIC's executive vice president, petrochemicals.
The plant would target the chemical recycling of low quality, contaminated mixed plastic waste streams into a feedstock suitable for the company's crackers in Europe.
The feedstock, known as pyrolysis oil, is created by converting the plastic waste that would otherwise by incinerated for energy recovery or ends up in landfills.
The feedstock will then be refined and upgraded at the new demonstration plant.
“We are supporting greatly the mechanical recycling of plastics but we believe that the long term sustainable circular economy will lie in chemical recycling,” said Al-Fageeh.
“We are in the process to make sure we have the right technology [for the demo unit], the right process and of course you have to depend on the value-chain of the business."
The SABIC executive spoke to ICIS on the sidelines of the 13th Gulf Petrochemicals and Chemicals Association (GPCA) Annual Forum.
Such units could be an integral part in the circular economy model as it helps to create new feedstock supply while at the same time protecting the environment, Al-Fageeh added.
“We are really one of the pioneers for supporting and encouraging for the change of the model from a linear to a circular economy,” he said.
However, he said that the shift towards circularity would require the engagement of the value chain of the business.
“We started the World Plastics Council [WPC] in 2014 to bring the plastic producers onto a platform which will make sure that people understand the use of the plastics, a good collection system for waste plastics and to take it to the next level which is making sure that these waste plastics is going to be a sustainable feedstock into our crackers,” said Al-Fageeh, pictured right.
In order for the circular system to work it will also require the support of consumers and governments, he said.
“This starts from the end-user of the products, the schools... Everybody needs to be convinced that this is the right thing to do. Also it may require some intervention from the governments to make sure that there is some regulation for waste and how to deal and collect with the waste,” he said.
“The moment that we are going to demonstrate that this is a really good at sustainable feedstock for the crackers I’m sure it will go to the whole world.”
Meanwhile, the company is also focusing on a slew of mega projects – its crude oil-to-chemicals joint venture complex with Saudi Aramco in Yanbu, its cracker project in the US with ExxonMobil as well as its coal-based project in China’s Ningxia Hui.
“These are the three major ones that have been recently taking place to support our strategic growth,” said Al-Fageeh.
The company has also signed a recent memorandum of understanding (MoU) with the Fujian government in China “to explore the opportunity for petrochemical investment” in the region, he said.
“We consider China to be an important and strategic market for SABIC, and we have shifted our strategy from supplying products into China to be a major local player within China,” Al-Fageeh said.
He pointed to the company’s joint venture with Chinese major Sinopec in running its Tianjin petrochemical complex, and sees it as a “platform for expansion” in the country.
“The recently announced MoU in Fujian is a continuation of our strategy to continue to having a footprint in China,” he added.
Apart from its organic expansions, the company is “continuously looking” at its mergers and acquisitions (M&A) opportunities, Al-Fageeh said, pointing to its recent stake acquisition in specialty chemicals producer Clariant.
“We have seen that the specialty business is really a strategic for business and adds value for our customers. We are enlarging our specialty [business] and we are engaging with Clariant in order to complement our specialty strategy,” he added.
Pictured: SABIC's Geelen site in The Netherlands Pictures sources: SABIC, GPCA
Interview article by Nurluqman Suratman