AFPM ’23: Zero carbon plastics create opportunity to command higher pricing – Dow CEO

Joseph Chang


SAN ANTONIO, Texas (ICIS)–Growing demand for low and zero carbon plastics, along with recycled and renewable-based plastics, will create the opportunity for differentiated pricing, the CEO of Dow said on Sunday.

The Dow CEO pointed to Germany-based automaker Volkswagen building an electric vehicle (EV) battery plant in Canada as the government aims to foster a manufacturing industry that will help automakers produce a net zero car – not just in terms of direct emissions, but the components that go into it as well.

In a typical car, around 28-40% of the material is based on chemicals and polymers, he noted.

“You’re seeing a lot of demand for that kind of material. I think it will create the opportunity to command higher pricing because the value they’re going to get from the end user is higher,” said Jim Fitterling, CEO of Dow, in an interview with ICIS.

Fitterling spoke to ICIS on the sidelines of the International Petrochemical Conference (IPC), hosted by the AFPM.

“It has to be priced based on its own supply/demand and also based on the driving force which is that unmet need out there in the marketplace today,” he said, noting this would apply to recycled and renewable-based materials as well.

Dow’s flagship project – its net zero carbon emissions cracker in Fort Saskatchewan, Canada with downstream polyethylene (PE) units – will incorporate the use of hydrogen to fuel cracker furnaces, and carbon capture and storage (CCS) through the existing Alberta Carbon Trunk Line. Dow aims to make a final investment decision on that project by the end of 2023 and is targeting start-up for 2027.

“We’re not going to build another cracker that doesn’t have zero carbon emissions,” aid Fitterling.

“In this environment it makes no sense. I think the public has spoken. They want industry as well as the utility sector to eliminate carbon emissions. We can play our role to bring carbon emissions down and it isn’t going to be at the same cost as what we do today,” he added.

A net zero carbon emissions cracker would cost 10-15% more in terms of the cracker design and autothermal reforming to produce hydrogen, not including the cost of sequestering the CO2, he explained.

“There are more unit operations that have to be built. But on balance, it fits that three-legged stool – it’s more sustainable, reliable and it’s relatively affordable,” said Fitterling.

Dow has outlined detailed projects to get to net zero on Scope 1 (from plant operations) and Scope 2 (from energy consumed) emissions through 2050. About half of these emissions come from cracker operations and half from use of power and steam.

“We’re not going to achieve our carbon emissions goals by selling assets. We’re going to achieve them by real investments in new technologies that bring our actual Scope 1 and 2 emissions down,” said Fitterling.

Dow plans to spend around $1bn/year on these projects, some of which would have been spent regardless of the goal since certain power and steam assets are approaching end of life and would need to be replaced with more efficient systems, he noted.

“I feel really good about the plan… If we are successful, we will continue to try to accelerate the pace on those. The biggest question I get is: Can you do it faster? Our mind is in the space of, we’d love to do it faster, but there’s a lot of new technology development and we want to make sure we get it right first. Once we get it right, then we can accelerate,” said Fitterling.

“Zero carbon emissions is what the world expects us to do… and they expect us to make products that can be recycled. We’re working hard on both, and I think we’re going to be a leader in both,” he added.

Dow also plans to unveil a Scope 3 (mainly from purchased raw materials) emissions target by the end of the year.

“We’ve been working through our supplier partnership team at Dow… for the last three years. We’re building up the database to understand what our Scope 3 exposure is. By the end of this year, we’ll have enough data to review that and set a target,” said Fitterling.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 26-28 March in San Antonio, Texas.

Interview article by Joseph Chang


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