Global demand for renewable PE exceeds capacity – Braskem

HOUSTON (ICIS)–Global demand for Braskem’s renewable polyethylene (PE) is well above its current production capacity, the chief financial officer of the Brazilian polyolefin producer said on Wednesday.

Braskem produces renewable PE by dehydrating ethanol to make ethylene. The ethylene is then polymerised in a conventional plant to make PE.

Braskem produces renewable ethylene at its Triunfo complex in Rio Grande do Sul state in Brazil.

It plans to expand capacity of its renewable ethylene by 30% to 260,000 tonnes/year in 2022.

If Braskem could produce 1m tonnes/year of PE from its renewable ethylene, it would sell out the entire amount, said Pedro Freitas, chief financial officer. He made his comments during an earnings conference call.

“I think the market is there today for a million tonnes,” Freitas said.

Braskem is able to pass through the cost of ethanol through its sales contracts, he said. In addition, Braskem has clients who are willing to enter into long-term contracts for the company’s renewable PE.

The challenge for Braskem is finding a way to accelerate capacity expansion for the material, Freitas said.

Braskem is considering partnerships or developing the plants itself, Freitas said.

Recently, the company and Lummus Technology signed a a memorandum of understanding (MoU) to jointly license the technology to make renewable ethylene at projects in North America and Asia.

Braskem did not disclose details about the North American project.

The Asian project is with Thailand’s SCG Chemicals. The two companies announced in September that they signed a memorandum of understanding to study the development of the project.

The Lummus partnership provides Braskem with the possibility of delivering several renewable ethylene projects, Freitas said.

“The market will demand new developments around the world,” he said. “It’s a complementary move that is the start of something much larger going forward.”

Braskem started making renewable ethylene at Triunfo more than a decade ago. It markets the PE it makes from the renewable ethylene as I’m Green.