INSIGHT: APIC ’23: Asia petrochemicals industry needs to recalibrate for sustainable growth
SINGAPORE (ICIS)–Industry leaders at the Asia Petrochemical Industry Conference (APIC) in India last week were fully focused on one topic – sustainability – as the region battles to meet the needs of its fast-growing population with future net-zero targets.
However, recalibration for the industry will be a daunting challenge given Asia’s current environmental regulations, legislation and targets lag behind the EU, whose member states are working more cohesively.
Still, industry leaders in Asia were unanimous in the need for concrete action and plans.
“Eco-consciousness will define the spirit of our times, and we will see increasing expectations placed on the petrochemical industry to adjust,” Mitchell Killeen, acting chairman of the Korea Petrochemical Industry Association (KPIA) told delegates at the conference.
“We must rise up to the challenges and opportunities presented by a range of environmental initiatives being pursued simultaneously,” Killeen, who was appointed in March as CEO and president of South Korean polymer producer Polymirae, said at the conference.
With the theme “Ushering in a Sustainable Future”, APIC emerged from a forced three-year hiatus due to the COVID-19 pandemic. The event attracted around 920 delegates.
Asia’s petrochemical demand is projected to post an annual growth of 4.0%, resulting in higher greenhouse gas emissions which must be addressed by developing and implementing new technologies, Japan Petrochemical Industry Association chairman Keiichi Iwata noted.
APIC members – Japan, India, Malaysia, Singapore, South Korea, Taiwan and Thailand – have a combined annual greenhouse gas emissions of 6bn tonnes, Iwata said, adding that “international cooperation is vitally important” to address the problem.
“Sustainability is no longer just a buzzword but a key imperative for future growth,” Malaysian Petrochemicals Association (MPA) chairman Akbar Thayoob told delegates at the conference in New Delhi.
The petrochemical industry must focus on three key areas: reducing its environmental footprint, promoting social responsibility, and fostering innovation, Akbar said.
Almost all APIC member countries are aiming for carbon neutrality by 2050, while India aims to achieve it by 2070.
More urgently, all of them have near term targets to slash carbon emissions by 2030.
By 2030, Japan has set a goal of reducing its greenhouse gas (GHG) emissions by 46%, India by 30-35%, Malaysia by 45%, Singapore by 36%, South Korea by around 27%, Taiwan by 50% and Thailand by 20%.
In line with the net-zero emissions target, Taiwan’s petrochemical industry is deploying toward new energy and new materials, investing in electric vehicles, battery materials, energy storage, focusing on the development of electronic chemicals, wind power products, and automotive products, Mihn Tsao, chairman of the Petrochemical Industry Association of Taiwan (PIAT) said.
Collaboration between industry players will also play a key role in promoting sustainable practices, said the chairman of the Petrochemical Industry Club of the Federation of Thai Industries (FTIPC) Charoenchai Pratuengsuksri said.
In the case of the FTIPC it is working with PPP Plastics and the Alliance to End Plastic Waste (AEPW) to develop prototypes and new ways to reuse plastics and preventing those plastics from leaking into the environment, according to Pratuengsuksri.
The FTIPC is also working on a project with the Thai government and academia to implement a code of practice to control volatile organic compound emissions (VOCs) from petrochemical industrial processes, he said.
The Asian petrochemical industry faces four key trends that will define its landscape to net-zero: the move towards a circular economy, a energy transition towards less oil use; rapid urbanization and the need for new technology to reduce GHG emissions, Lee Fagg, vice president of energy and chemicals at NexantECA, said at the conference.
China will make up 64% of Asia’s overall plastics consumption growth through to 2032, while India will make up 16% of Asia’s overall plastics consumption growth in 2022-2032. Southeast Asia is projected to have a 14% share, he said.
Asia’s incremental consumption of plastics which include polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), polyethylene terephthalate (PET) and polystyrene (PS) is expected at around 60m tonnes in 2022-2032, Fagg said.
INDIAN CAPACITY EXPANSIONS
With low plastic consumption per capita at around 18 kilograms, India – now the most populous nation – has massive potential for demand growth apart from southeast Asia at 19 kilograms per person and Africa at 10kg/person.
India’s petrochemicals demand is expected to nearly triple by 2040, with the industry’s value to reach the $1 trillion mark on the back of strong economic growth and investments, Hardeep Singh Puri, India’s minister of Housing and and Urban Affairs, Petroleum & Natural Gas, told APIC delegates.
“We are expecting in the coming decades to bring in investments worth more than $87bn,” the minister said.
“The Indian chemical sector continues to grow at a rate of 1.2-1.5 times the GDP [rate] going forward and if you look at Indian GDP growth, this is not insignificant,” he said.
To meet this demand growth, India will see a wave of new petrochemical production capacities through to 2030 as it seeks to meet growing domestic demand amid strong economic growth, the president of India’s Chemicals & Petrochemicals Manufacturers’ Association (CPMA) Kamal Nanavaty said.
In 2023, India added 1.25m tonnes/year of new PE capacity and 0.5m tonnes/year of PP capacity, he noted.
Another 1m tonnes/year of new PE and PP capacities will be added in 2024, Nanavaty said.
“By 2030, India is expected to add 7m tonnes/year of PE, 4.5m tonnes/year of PP and 2.5m tonnes/year of PVC capacities,” he said.
India’s economic growth is expected to hit 7% this year, he said, adding that the country’s exports of merchandise and services are “on course to touch $1 trillion soon”.
India’s expected annual growth rate of around 6-8% would mean that it requires sustained investments in polymers and chemicals as well as new materials, RIL executive director Nikhil Meswani said.
“We [India] will need an average of 1m tonnes of ethylene every year for the foreseeable future,” he said.
“Currently we are importing chemicals and intermediates and this is a very significant opportunity for investment dollars,” Meswani said.
Insight article by Nurluqman Suratman
(Thumbnail image: APIC 2023 in New Delhi. Photo by Pearl Bantillo)
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