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SAN ANTONIO (ICIS)–The US programme that will
phase down the use of hydrofluorocarbons (HFCs)
in refrigerants and blowing agents used In
polyurethanes will hit some major milestones in
the upcoming months – while states consider
broad bans on fluorinated materials that could
encompass the new chemicals that will replace
them, hydrofluoroolefins (HFOs).
The US and other countries in the world are
phasing down HFCs because they are
exceptionally powerful greenhouse gases.
Worldwide, the global phasedown of HFCs should
prevent the planet’s temperatures from rising
by as much as half a degree Celsius, according
to the Environmental Protection Agency (EPA).
UPCOMING MILESTONESThe
US adopted a phasedown schedule as part of the
American Innovation and
Manufacturing (AIM) act, which became
law earlier in the decade.
The Environmental Protection Agency (EPA)
intends to finalise the technology transitions
rule no later than 7 October, said Margaret
Sheppard, environmental scientist at the EPA.
She made her comments at the Polyurethanes
Technical Conference, held by the Center for
the Polyurethanes Industry (CPI).
The EPA should meet that deadline even if the
US government shuts down at the end of
September, she said.
Implementation of the phasedown will then
proceed.
Sheppard expects implementation will go much
smoother for the polyurethanes industry than
those involved with refrigeration and air
conditioning.
The polyurethanes industry has been preparing
for the phasedown for
several years by developing acceptable
blowing agents and by developing formulations
that are compatible with those new new blowing
agents.
HFC PHASEDOWN
SCHEDULEThe next big step takes
place in 2024, when US regulations will call
for a big decline in the amount of the amount
of HFCs that the nation can consume and
produce. That amount will be 60% of a baseline
established by a formula in the AIM law.
The following table shows the phasedown
schedule.
Year
% of baseline
2022-2023
90%
2024-2028
60%
2029-2033
30%
2034-2035
20%
2036 and after
15%
Source: EPA
In some cases, a suitable replacement for HFCs
has yet to be found, Sheppard said. The one
polyurethane application that falls into this
group is structural composite foam for marine
and trailer use.
In fact, the EPA is describing the process as a
phasedown because there could still be some
cases where no alternative to HFCs can be
found.
STATE PFAS BANS COULD INCLUDE
HFOSThe polyurethane industry
has been relying on HFOs as a replacement for
HFCs because they are exceptionally weak
greenhouse gases and they do not threaten the
ozone layer.
However, some governments could adopt broad
definitions and bans of per- and
polyfluorinated alkyl substances (PFAS) that
could include HFOs, said Ian Choiniere,
director, product advocacy for the CPI.
These definitions would go beyond those of the
EPA, which do not include HFOs as PFAS, he
said.
The US state of Maine signed into law such
restrictions that could ban HFOs in 2030,
Choiniere said.
Minnesota is another US state that could impose
a similar ban in 2032, Choiniere said.
Maine has since implemented a legislative
working group that would look into the
rulemaking process, he said. That opens up the
possibility of the state considering the
implications of such a ban and developing
exceptions to it.
Minnesota is has not begun the rulemaking
process, so that also opens up the possibility
of exceptions, Choiniere said.
FOREVER CHEMICALSThe
state restrictions come amid growing concerns
about PFAS being forever chemicals that take
several years to break down and that accumulate
in the body.
However, HFOs are not forever chemicals because
they were purposely designed to break down.
This was intentional to prevent HFOs from
reaching the ozone layer and destroying it.
There has been concerns about secondary
byproducts of the breakdown of HFOs, especially
trifluoroacetic acid (TFA).
Choiniere quoted comments from the ozone
secretariat of the UN Environment Programme
(UNEP), which said that TFA concentrations are
too low to pose a threat. Moreover, the
biological effects of TFA are different from
PFAS.
INTERNATIONAL APPROACH TO
HFOSStates have defended their
approach on PFAS definitions by pointing to
steps being taken by regulators in Europe,
Choiniere said.
However, the EU has not progressed to risk
management, he said. Instead, the EU is
reviewing any substances that have a CF2 or CF3
group, he said. That would include HFOs.
The UK PFAS Preliminary Regulatory Management
Options Analysis is assessing the need for
regulatory action.
In Canada, Environment and Climate Change
Canada releases a report urging a class
approach to PFAS using the definition of the
Organisation for Economic Cooperation and
Development (OECD).
While that definition encompasses HFO blowing
agents, Canada’s current risk management
recommendations only focus on firefighting
foams, Choiniere said.
BANS AND FLUORINE
CHEMISTRYBroad definitions of
PFAS could encompass materials beyond HFAS.
Fluoropolymers such as Chemours’s
Nafion are used as membranes in
hydrogen fuel cells and electrolysers, which
split water molecules to produce green hydrogen
with renewable energy.
Polyvinylidene fluoride (PVDF) is used as a
lithium-ion binder and separator.
Fluoropolymers have dielectric properties that
protect data from noise and preserve its
fidelity in 5G networks.
Semiconductor fabrication plants, known as
fabs, require tubing that can resist the
chemicals used to etch wafers. Fluoropolymers
are typically used because of their properties.
Choiniere said he was unable to comment about
these restrictions spreading to other
fluoromaterials because he is focused on
fluorinated gases.
The Polyurethanes Technical Conference runs
through Wednesday.
Polyurethanes are made with isocyanates and
polyols.
27-Sep-2023
LONDON (ICIS)–Advanced design work has begun
on a hydrogen production project that could
have capacity of up to 1GW and is expected to
produce approximately 230,000 tonnes/year of
low-carbon hydrogen, the developer said on 25
September.
Hydrogen produced by the HPP2 project, due
online in 2026 and being developed by EET
Hydrogen, will be used by local industrial and
power generation customers in the northwest of
England within the HyNet cluster.
This follows on from the front-end design and
engineering (FEED) completion on the 350MW HPP1
plant, also due online in 2026, back in
September 2021. The two plants are adjacent to
each other.
HPP1 and HPP2 combined are expected to capture
some 2.5m tonnes/year of CO2 before increasing
capacity to 4GW by 2030. This would be 40% of
the UK government’s 10GW target for low-carbon
hydrogen generation capacity.
However 5GW of the 10GW target covers renewable
hydrogen produced via electrolysis which
neither HPP1 or HPP2 will qualify for.
27-Sep-2023
LONDON (ICIS)–The UK and Germany have signed a
declaration to work together to underpin
international trade in hydrogen, the UK energy
department said in a statement on 26 September.
The agreement was signed in Berlin by UK energy
efficiency minister Lord Callanan and
German energy secretary Philip Nimmermann.
The two countries will “accelerate the role of
low-carbon hydrogen in their nations’ energy
mix, showing the world how to expand new net
zero-friendly markets”, the statement said.
Under the agreement, hydrogen technologies
should become “cheaper and more accessible”,
the statement added.
Five key pillars of collaboration were agreed:
Accelerating the development of hydrogen
projects for industry and consumers
Establishing international leadership on
hydrogen markets, setting safety standards and
regulations to aid trade
Research and innovation on hydrogen from
production to end use
Promoting trade for hydrogen plus related
goods, technologies and services
Joint market analysis to support planning
and investment by government and industry.
Both Germany and the UK are forecast to see
strong hydrogen demand in the coming years,
with ICIS data showing demand will reach
88TWh in Germany and 24TWh in the UK by 2030.
While the UK is seeking to produce all its own
hydrogen with potential for exports from
Scotland, Germany will import the bulk of its
hydrogen requirements from other countries.
Germany expects to import between 50%-70% of
its hydrogen via a mix of pipeline flows from
nearby countries and maritime ammonia from
other global regions.
27-Sep-2023
VIENNA (ICIS)–The European petrochemical
markets are in a trough, with no demand upturn
expected for 2024.
While sentiment at the European Petrochemical
Association (EPCA) meeting in Vienna was not
one of optimism, it was of resilience.
Demand is expected to remain at a low level for
2024; however, market participants did not
expect conditions to worsen.
“Expectations of pick-up in demand in 2024 are
based on hope, not market fundamentals,” said
one chemical major.
“We will continue to play this game for another
year and a half,” said one major producer.
While survival was the theme of last year’s
event, flexibility became a key theme this
year, with companies adapting to the ‘new
normal’ for the markets.
The fall in gas prices provided some relief for
European sellers, who were able to move into
defence mode, lowering prices throughout 2023
and closing the window to material from Asia
for some markets.
European operating rates remain low, and
producers will be required to carefully manage
balances next year.
“Next year will be a
year of flexibility and adjusting,” said one
producer.
“Flexibility will have a higher priority than
in previous years,” commented a producer.
Heavy destocking has been seen across all
markets, with players managing working capital
closely given the ongoing financial pressures.
This will disrupt traditional destocking
behaviour in the fourth quarter, with the value
chain already at a depleted level.
“Destocking is over and we have reached a
steady state,” said one seller.
The risk of the lower inventories was another
key topic, with the potential for prices to
spike sharply in the event of production
outages, with a lack of buffer in the system.
Memories turned to 2008, after the economic
crash and the last time the industry saw a
significant downcycle, with the lower
investment in facilities a risk for supply
constraints once demand does increase.
This reinforced the need to corporation,
flexibility and multiple supply options for
buyers, already looking further ahead and
strategically planning for after the current
downcycle.
The EPCA annual meeting runs from 25-28
September.
Focus article by Katherine
Sale
Front page image shows the Danube Canal in
Vienna (image credit: Nicolas
Economou/NurPhoto/Shutterstock)
27-Sep-2023
LONDON (ICIS)–Arkema is investing €130m in a
new purification process to cut carbon dioxide
(CO2) emissions by 20% at its Carling acrylic
monomers production site in France, it said on
Wednesday.
The French chemicals major will implement the
new, patented purification technology by 2026
to improve operational efficiency and the
site’s environmental footprint.
“After the introduction of biobased acrylic
monomers in 2022 using the mass balance
approach, this new project at Carling is
another key step to position Arkema as a leader
in low-carbon acrylic materials, and to help
our customers reduce their Scope 3 emissions,”
said Richard Jenkins, senior vice-president for
Arkema’s Coating Solutions.
The Carling facility produces acrylic monomers
used in performance coatings, adhesives, water
treatment and other performance materials used
in various applications.
Arkema said the project was part of its global
decarbonisation capital expenditure roadmap and
has been partly funded by the French state
under the France 2030 programme, which supports
the development and industrialisation of
renewable energy solutions.
27-Sep-2023
SINGAPORE (ICIS)–UK energy firm BP has started
building a solar project in Texas that will
supply electricity to the joint venture
petrochemical project of ExxonMobil and SABIC
in the US Gulf Coast.
The Peacock Solar project will have a capacity
of 187 megawatts defined conditions (MWdc) is
located 10 miles north of Corpus Christi in San
Patricio County, BP said on 26 September.
Financial details of the solar project were not
disclosed.
BP’s 50:50 joint-venture partner – global solar
firm Lightsource bp – is developing the project
and managing the construction on behalf of the
UK energy firm.
“Peacock will sell all of the electricity it
generates under a long-term power purchase
agreement to Gulf Coast Growth Ventures (GCGV),
a joint venture between ExxonMobil and SABIC,
which produces materials used to manufacture
clothes, food containers, packaging,
agricultural film and construction materials,”
it said.
GCGV’s complex in Corpus Christi has a 1.8m
tonne/year cracker; two polyethylene (PE)
production units with a combined capacity of
1.3m tonnes/year; and a 1.1m tonne/year
ethylene glycols unit, according to ICIS Supply
and Demand Database
“Once online, the solar-generated electricity
will be used to partially power our plant and
help reduce emissions in support of a net-zero
future,” GCGV president Paul Fritsch said.
Start of commercial operations at the complex,
which is a joint venture between US energy
giant ExxonMobil and Saudi petrochemical major
SABIC, was
announced in January 2022.
The Peacock solar project is part of BP’s “aim
to invest in and build renewable energy
capacity of 50 gigawatts (GW) by 2030”, it
stated.
27-Sep-2023
HOUSTON (ICIS)–Brazil Potash said that the
leadership of the Mura people has informed the
Canadian producer of their vote in favour of
the Autazes Potash project.
Currently, Brazil Potash is advancing the
estimated $2.5bn project in the state of
Amazonas with the proposed mine and processing
facilities located 75 miles southeast of the
state capital Manaus.
It had previously submitted an indigenous
consultation study (ECI) to the government
indigenous rights protection agency, yet
earlier this month, a local court had suspended
the preliminary permit.
Federal prosecutors had claimed to the court
that permitting procedures were not properly
undertaken. The company, which has expectations
of starting production by 2026, denied any
wrongdoing at the time.
In a statement, the governor of Amazonas,
Wilson Lima, said the support of the Mura
people is crucial with there now being the
possibility of establishing a new economic
foundation for the state.
“This is a very important day, a historic day
because we are taking a significant step
towards changing the lives of the people who
reside in the state of Amazonas, especially
those in the municipality of Autazes,” said
Lima.
“This is a fundamental step, and I consider it
the most important one, which is the process of
consulting the Mura people about the potassium
exploration activity in the municipality of
Autazes.”
Adriano Espeschit, the president of the
company’s subsidiary Potassio do Brasil, said
that the potash produced worldwide is a crucial
fertilizer for crops and that right now, Brazil
is very dependent on imports rather than being
self-reliant.
“This is a new moment for Autazes, for
Amazonas, for Brazil, and why not say it for
the world, as food security depends on
fertilizers for agriculture, to feed people and
eradicate hunger in our world,” said Espeschit.
“This is a strategic project to end world
hunger. We will work on the next steps to
advance licensing and begin the project’s
installation in Autazes.”
Current estimates show that Brazilian annual
potash consumption is approximately 12.6m short
tons, with roughly 85% of those needs served by
imports, but Brazil Potash expects that the
Autazes project will eventually be producing
2.2m tons per year.
26-Sep-2023
HOUSTON (ICIS)–Australian fertilizer developer
Minbos Resources announced it launched its
phosphate fertilizer brand, Prosper
Primeiro, at an industry workshop earlier
this month in Angola.
The producer is currently advancing the Cabinda
Phosphate project plant and the Capanda green
ammonia project in Angola.
Minbos said it held a workshop attended by
representatives of the nation’s Agriculture,
Economy and Mining Ministries, the Institute
for the Development of Agriculture (IDA) and
the Fund for the Development of Agriculture
(FADA).
Representing the producer was CEO Lindsay Reed
and Country Manager Camache Caturichi, with the
aim of the event to not only launch the new
brand but provide technical support to IDA
extension workers and industry regarding local
soils and growing conditions.
Minbos said it was also an opportunity to
introduce extension workers to phosphate-based
fertilizer and the importance of large
applications in the first year.
It gave the producer a chance to demonstrate
its phosphate decision support tool, which is
an interactive application available for free
which allows farmers to make decisions on the
rates and returns for Prosper
Primeiro.
Minbos said it also provided an update on field
and greenhouse trials featuring the efficacy
for the yield increases delivered by
Prosper Primeiro.
26-Sep-2023
SAN ANTONIO, Texas (ICIS)–A US law intended to
promote energy efficiency is beginning to
stimulate demand for polyurethane insulation,
an official with Covestro said on Tuesday.
The law, called the Inflation Reduction Act
(IRA), is relatively new, so it is just now
beginning to have an impact, said Judi Bayer,
head rigid raw materials for Covestro. She made
her comments on the sidelines of the
Polyurethanes Technical Conference, held by the
Center for the Polyurethanes Industry (CPI).
Polyurethane spray foam and polyisocyanurate
board stand to benefit from such
energy-efficiency policies because they are
among the strongest insulating materials
available. Spray foam has the additional
benefit of functioning as a building envelope,
which prevents air leakage.
HOME BUILDERS RESPOND TO LOW HOUSING
STOCKBayer said there are signs
that home builders in the US are increasing
construction activity to address the shortage
of available housing.
She pointed to number of US housing starts for
single-family homes.
Although the number of housing starts fell in
August from July, they rose year on year and
they were up from the winter and spring months,
as shown in the following chart. Figures are
not seasonally adjusted.
Source: US Census Bureau
Nonetheless, high costs are making it more
difficult for consumers to afford a new house.
Higher mortgage rates, higher material costs
and higher labour costs have all made new
houses increasingly unaffordable.
And because of the shortage of more affordable
existing houses, consumers often have little
choice but to buy a more expensive new house.
Home builders
are taking steps to get costs under
control, such as reducing the size of housing.
SNAPSHOT OF CURRENT AUTO
MARKET
Automobiles are an important end-market for
flexible polyurethane foam, and for much of
2023, automobile sales have been increasing
globally by the mid single digits, said Scott
Skolnekovich, vice president flexible foam,
performance materials North America, Covestro.
For North America, the growth rate for
automobile sales has been in the high single
digits, he said.
Automobiles have stood out among major
polyurethane end-markets because of its growth,
he said. Other major end-markets for flexible
foams have not been as robust.
Flexible foam demand for furniture and mattress
production has been lagging because consumers
had splurged on these purchases during the
depths of the coronavirus pandemic,
Skolnekovich said.
Purchases that consumers would have normally
made in the future were made during the
pandemic years, he said.
Since then, consumers are spending their money
on services such as travel instead of
big-ticket items such as furniture and other
durable goods, Skolnekovich said.
Inflation is also discouraging sales of
furniture and mattresses, but not to the same
extent as changing consumer habits, he said.
The Polyurethanes Technical Conference runs
through Wednesday.
Polyurethanes are made with isocyanates and
polyols.
Interview article by Al
Greenwood
Recasts tenth paragraph to read “mid single
digits” instead of “low single digits”
26-Sep-2023
HOUSTON (ICIS)–US builders are reducing the
sizes of single- and multifamily housing to
make them more affordable as mortgage rates
reach 20-year highs, an executive at Huntsman
said.
US mortgage rates have been rising with the
benchmark interest rate, which is set by the
Federal Reserve.
The US central bank could raise rates by
one more quarter point from the current
5.25-5.50% as part of its campaign to bring
inflation down to its target of 2%.
That campaign by the Fed has helped push
average mortgage rates to 7.19%, a 20-year
high, according to Freddie Mac, a company that
buys and securitises home loans.
Those higher rates are one of the factors
making housing unaffordable to a growing number
of US consumers.
Home builders are responding by reducing the
size of single-family houses by 10%, said Jan
Buberl, Huntsman vice president polyurethanes
Americas and global propylene oxide (PO)/methyl
tertiary butyl ether (MTBE).
For multifamily housing, the reduction is 20%,
he said.
MULTIFAMILY
CONSTRUCTIONBuberl noted that
many multifamily projects under construction
were financed when interest rates were much
lower.
It is unclear if similar projects would be
viable under today’s much higher interest rate
environment, he said.
POLYURETHANES AND
CONSTRUCTIONConstruction is
important to Huntsman’s polyurethanes business
because two-thirds of its sales in the Americas
are tied to the sector, Buberl said. Out of
that, 60% is tied to residential construction
in the Americas and 40% is tied to commercial
construction.
For residential construction, a lot of
Huntsman’s polyurethane chemicals are used in
insulation and oriented strand board (OSB).
For the chemical industry in general, housing
is a key end-use market in the form of paints,
wire insulation, house-wrap, sealants, roofing
materials, resilient flooring, vinyl siding and
many other chemical and plastic-related
products. Other products include plastic
pipe, insulation, paints and coatings,
adhesives and synthetic fibres.
New housing also generates sales of appliances,
furniture, carpet, fixtures and window
treatments. In total, each start engenders on
average over $13,000 worth of chemistry.
AFFORDABILITY CRISISIn
years past, consumers would have bought
existing homes if they could not afford a new
one. However, the US has a shortage of existing
homes because of a drought in house
construction that followed the 2008-2009
recession.
In addition, people who own homes are reluctant
to sell them because their purchases were
financed with relatively cheap loans, Buberl
said. The average mortgage rate for current
homeowners is 4%.
If consumers continue to hang on to their
homes, they may choose to remodel and renovate,
which would require polyurethanes and other
plastics and chemicals used in construction.
IMPLICATIONSAlthough
housing is unaffordable for a large number of
consumers, a significant share of them are at
the age when people typically buy homes.
Those demographics, the shortage of housing and
the smaller size of new homes could encourage
more construction and sales even as mortgage
rates remain high.
For multifamily housing, higher interest rates
could make it more difficult to arrange the
financing for future projects. Developers could
try to offset those financing pressures by
building smaller projects.
CURRENT SNAPSHOT OF COMMERCIAL
CONSTRUCTIONBuberl noted that
office construction is in a difficult situation
because of vacancies caused by people working
from home.
Warehouse construction has just come off of a
wave of activity. It is close to equilibrium,
with room for some additional growth.
Companies are building a lot of industrial
plants closer to their customers in a
phenomenon known as reshoring or nearshoring,
Buberl said.
These types of industrial projects have flat
roofs that require insulation. Walls also
require insulation.
Roofs and concrete floors require coatings.
The Polyurethanes Technical Conference is held
by the Center for the Polyurethanes Industry
(CPI). It continues on Tuesday and runs through
Wednesday.
Interview article by Al
Greenwood
Thumbnail shows a home being built. Image
by the National Association of Home Builders
(NAHB).
26-Sep-2023
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