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SAN ANTONIO (ICIS)–Some individual US states are considering restrictions on fluorinated materials that are so broad, they could threaten the use of the latest generation of refrigerants and blowing agents that are used by the polyurethanes industry. The restrictions are part of a longstanding trend of individual states adopting different regulations. The result creates a patchwork of regulations throughout the US that chemical companies have to navigate on a case-by-case basis. STATE RESTRICTIONS ON PFASThe Center for the Polyurethanes Industry (CPI) noted that some states are considering broad definitions of per- and polyfluorinated alkyl substances (PFAS) that go beyond the ones adopted by the US Environmental Protection Agency (EPA). The problem with these broad definitions is that they can include hydrofluoroolefins (HFOs), a family of chemicals used as refrigerants and as blowing agents in polyurethane foams. HFOs are replacing hydrofluorocarbons (HFCs), which are exceptionally powerful greenhouse gases. If individual states adopt their own PFAS regulations that restrict the usage of HFOs, then polyurethane companies could face a variety of regulations that would require different polyurethane formulations for different states. The state bans point to another challenge. They imply that the polyurethanes industry would have to develop other blowing agents to replace HFOs. These replacement would need to be benign greenhouse gases that do not fall under the broad definition of a PFAS. For the polyurethane industry, developing another replacement is problematic because they already have gone through the complicated process of reformulating their products to make them compatible with HFOs. Polyurethanes are complicated systems made up of isocyanates, polyols, additives, catalysts and blowing agents. A change in one component could require changes in the others. States could carve out exceptions for hard-to-replace materials such as HFOs, said Ian Choiniere, director, product advocacy for the CPI. He made his comments on the sidelines of the Polyurethanes Technical Conference. They could also delay the restrictions so they could study how they could sabotage other environmental goals. The danger of continued use of powerful greenhouse gases as refrigerants could be worse than replacing them with HFOs. STATE ENERGY CODES AND SPRAY FOAMState policy could slow down adoption of polyurethane spray foams, which function both as powerful insulators and as building envelopes that prevent air leakage. This threat to spray-foam adoption could occur because states can choose how they adopt the latest updates of the International Energy Conservation Code (IECC) from the International Code Council (ICC). The code sets standards for air leakage, windows and other energy conservation measures for construction. These kinds of codes can affect demand for polyurethane spray foam insulation and other building chemicals. If states pick looser standards, that could allow builders to use materials other than polyurethane spray foam as insulation. To encourage the adoption of the latest codes, the administration of US President Joe Biden is offering grants totalling $400m. The Polyurethanes Technical Conference continues on Tuesday and runs through Wednesday.

TORONTO (ICIS)–Canadian labour union Unifor started collective bargaining talks with General Motors (GM) on Tuesday, but has not set a strike deadline. Unifor represents about 4,300 GM workers at three facilities in Ontario: a powertrain plant in St Catherines, near Niagara Falls; an assembly plant at Oshawa, east of Toronto; and a parts distribution centre at Woodstock, southwest of Toronto. The powertrain plant builds engines for several GM vehicles and powertrains for the Chevrolet Equinox and Corvette. The Oshawa plant assembles Chevrolet Silverado vehicles. Unifor will use the terms of its three-year collective deal reached with Ford last week as a template for its talks with GM, it said. Unifor’s Ford members ratified the deal over the weekend with 54% voting in favour, a slim margin that suggests that ratification of a similar deal at GM cannot be taken for granted. The terms of the Ford deal include an increase in the “base hourly wage” of nearly 20% for production and 25% for trades over the three-year agreement, Unifor said. Hourly wages for production workers at Ford Canada were now Canadian dollar (C$) 11/hour ($8/hour) or 35% higher than wages for comparable US auto workers at Ford, according to Unifor. It remains to be seen to what extent, if at all, the Ford Canada deal may influence the ongoing auto labour dispute in the US, where a widening strike entered its 12th day on Tuesday. US-Canada auto manufacturing is tightly integrated, with disruptions in either country affecting suppliers from the chemicals, plastics and other industries on both sides of the border. The petrochemicals industry is paying close attention because an extended  auto strike would massively disrupt demand for polymers. A typical vehicle contains nearly $3,950 of chemistry including chemical products and chemical processing. The automotive industry is a major global consumer of petrochemicals that contributes more than one-third of the raw material costs of an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). ($1 = C$1.35) Additional reporting by Adam Yanelli, Al Greenwood and Joseph Chang Please also visit the ICIS automotive topic page Thumbnail image shows sports-utility vehicles sitting at a Chevrolet dealership in Englewood, Colorado. Photo by David Zalubowski/AP/Shutterstock

VIENNA (ICIS)–ExxonMobil Europe president Philippe Ducom sat down with ICIS chief news correspondent Tom Brown to discuss the US-based oil and gas major’s approach to its decarbonisation drive, and the global path to net zero. Click here to read ExxonMobil’s global outlook to 2050. Company emissions-reduction priorities are based on existing competencies such as geological infrastructure and transport knowledge, to feed a drive towards developing as a carbon-removal business European competitiveness in the petrochemicals industry is being challenged where much of the net zero transition work needs to happen Policymakers should focus on a simple, market-based, technology-neutral approach to regulation Green Deal has added to the complexity of operating in Europe, compliance weighs heavily on SMEs ExxonMobil has earmarked $17bn on lower-emission investments globally 2022-2027. Policy support, technological advances and market-driven solutions are all necessary for the success of energy transition, driven by collaboration across companies, governments, universities etc Permitting reforms necessary in Europe to drive development of infrastructure and capacity Europe has a “far more prescriptive and punitive” policy approach than the US, as the Inflation Reduction Act is a more pragmatic, incentive-driven approach for companies to deploy a range of low-carbon projects and technologies Crucial that the EU does not bring more regulations for picking winners, which will restrict competition and exclude technologies ExxonMobil’s sustainability plans require a stable, sustainable investment environment Click here to read ExxonMobil’s global outlook to 2050.

VIENNA (ICIS)–The EU chemicals industry is likely to be hit by substantially higher carbon prices and a more ambitious wave of CO2-reduction reduction targets from the European Commission in the years ahead, the director general of industry body Cefic said on Tuesday. Carbon prices have increased rapidly and far exceeded projections made a few years ago, but a lack of carbon credits in the current emissions trading system (ETS) directive beyond 2036 means that prices could spike even higher than expected, Marco Mensink said at the opening panel of the annual European Petrochemicals Association (EPCA) meeting. “By 2036 in the EU ETS directive there is no more credit in the system, which means by 2036 if you still emit carbon, you’re going to pay through the nose, there is no other way,” Mensink added. Higher carbon pricing is likely to be exacerbated by European Commission 2040 targets, which are expected to be determined in early 2024. The European Scientific Advisory Board on Climate Change (ESABCC) has recommended that policymakers target 2040 greenhouse gas reductions of 90-95% compared to 1990 levels, from 2030 targets of minus-55%. Policymakers are leaning towards an 85% reduction, according to Mensink, but that would also constitute a major shift for the chemicals sector. “Brussels has to come out with the 2040 targets,” Mensink said. “The science panel says minus-95% and politicians say minus-85%. Minus-85% might as well be minus-100%.” The potential for a substantial increase in carbon pricing beyond the mid-2030s raises the pressure on companies to make the right bets in their next investment cycle, Mensink added, particularly as higher costs will also impact consumers, creating pressure for parliament to support either industry or households. Developing sectors such as electric vehicles (EVs), batteries and semiconductors is a priority for the European Commission – and are all value chains that the chemicals sector supplies to – but it has yet to benefit significantly from subsidies flowing to those industries, Mensink said. The changing competitive dynamics and the additional pressures from higher carbon costs and intensified greenhouse gas reduction targets are likely to drive a shake-up in the chemicals sector, with substantial advantages to the first movers into the “10% will die… 10% might get state aid, and the middle will suffer. The message is to be among the 10%,” Mensink said. INEOS Project One CEO John McNally recently said that European chemical firms need to  be prepared to make major investments in assets that can help lower carbon intensity and have a competitive cost base. ““I think we’re at a crossroads – we’re either going to start reinvesting in Europe or we give up,” he told ICIS. The 57th annual EPCA meeting takes place in Vienna, Austria, from 25-28 September Front page picture shows view of Vienna’s cityscape from Vienna International Airport in Schwechat, Austria (image credit: CHRISTIAN BRUNA/EPA-EFE/Shutterstock)

LONDON (ICIS)–The EU and the US could scale up and fast-track the deployment of clean technologies if the two were to integrate their markets in terms of standardisation, regulatory alignment, capital flows and mutually reinforcing incentives. Speaking to ICIS, Ann Mettler, vice president, Europe for Breakthrough Energy said over the past decade US investors’ participation in EU cleantech deals increased sevenfold, while EU investors’ participation in US cleantech deals increased threefold. Furthermore, she said that 31% of European ventures which benefited from US capital had funding rounds of $100m or more, compared to only 8%, which did not benefit from US capital. A report published this summer by Cleantech Group and supported by Breakthrough Energy, an international organisation aiming to accelerate innovation in sustainable energy, also found EU innovators who had US investors reached equity growth around 20% faster compared to those without. STANDARDISATION The former director-general and head of the European Political Strategy Centre at the European Commission said new geopolitical dynamics are bringing the EU and the US together despite a sometimes fractious relationship in the past caused by diverging views on digital regulations. She pointed out that India and China set the new benchmark in terms of market size, with China additionally leading the world as far as solar panel and battery deployment is concerned. “I would say there are real benefits in closer integration. It doesn’t always have to be complete alignment but mutual recognition of standards and regulations are also important,” she said. For example, she noted that the wind sector is currently struggling on both sides of the Atlantic not only because of supply chain problems but also because there had been an excess of customisation, which had been pushing up costs and hit profitability. Standardisation could be a key catalyst to fast-track the mass deployment of cleantech, including wind, at a time when speed and scale are more important than ever before, she said. One recent success story is that the EU and the US have been able to agree on producing a common charger for heavy duty electric vehicles at the most recent EU-US Trade and Technology Council (TTC), she noted. However, such alignments ought to be expanded to big-ticket projects including the harmonisation of power grid equipment on both sides of the Atlantic. “This is really low-hanging fruit, which could be achieved,” she added. CARBON CLUB She said the EU and the US were now working to align the standards defining sustainable aluminium and steel. As an agreement may be reached as early as October, a new standard could have wide-reaching implications on two fronts. Firstly, since the EU and US economies, alongside Canada and the UK, represent a third of the global economy, meaning that the standards used for sustainable aluminium and steel on both sides of the Atlantic could in fact set standards worldwide and therefore drive a race to the top. Secondly, such an agreement could form the ‘kernel’ of a carbon club, where different countries with similar standards could trade freely, which in turn could incentivise those with a higher carbon footprint to improve their performance in order to also benefit from seamless access. The emergence of such a carbon club would coincide with the EU rolling out its carbon border adjustment mechanism (CBAM) in 2026 and following a pilot period which starts from next month. CBAM aims to equalise the price of carbon paid for EU products traded under the EU’s Emissions Trading Scheme (ETS) and imported goods. “There hasn’t been a product that has been targeted yet. If there is an agreement [on sustainable aluminium and steel] this could be the kernel of the carbon club,” she added. DIGITALISATION Another important workstream for the EU and the US would be the digitalisation of public authorities, with a special focus on permitting to help speed up the deployment of cleantech, especially wind, solar and power grids. Finally, EU companies, including start-ups, could benefit from tapping the US’ liquid capital markets to scale up operations and drive innovation. “This is more urgent than ever as the EU’s own efforts to complete a capital markets union have been uneven,” she explained. However, she warned that the EU and the US have a limited window of opportunity to identify and work on areas of integration before transatlantic divergences may reappear. “At the end of the day, there is a lot more that unites than divides us. And there is certainly a lot more we should be able to agree on than a common charger for heavy duty electric vehicles,” she said.

HOUSTON (ICIS)–US farmers have now harvested 15% of their corn crop and 12% of the soybean acreage according to the US Department of Agriculture (USDA) weekly crop progress report. The current pace for corn is above both the 2022 level of 11% and the five-year average of 13%. Right now, North Carolina is the leading state with 78% of its crop completed, followed by Texas at 73%. In other updates on the corn acreage the weekly report showed that there is now 95% of the crop which is dented and 70% that is mature. There is 53% of the crop being rated as good to excellent. Soybean harvest has reached 12% which is above the 7% achieved in 2022 and just ahead of the five-year average of 11%. The leading state for harvest progress is Louisiana at 79% completed, followed by Mississippi at 61%. Currently there is now 73% of the soybean acreage, which is dropping leaves, with 50% of the crop now rated as good to excellent.

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 22 September. US auto workers union to expand strike at 38 GM, Stellantis parts distribution facilities United Auto Workers (UAW) membership will begin a “Stand Up Strike” at 38 Stellantis and GM parts distribution centres at 16:00 GMT (noon EST) after negotiations with two of the Big Three have made no progress since the strike began eight days ago. INSIGHT: Large construction cost overruns hit US chemical plants A surge in new US industrial projects and a chronic shortage of construction labourers are contributing to cost overruns of about 50% for some renewable fuel and chemical projects. Ford reaches tentative labour deal in Canada, avoids strike Ford and labour union Unifor have reached a tentative three-year collective deal for about 5,600 Ford auto workers in Canada, thus avoiding a strike. US auto union’s ‘Stand Up Strike’ enters fourth day The United Auto Workers (UAW) union’s “Stand Up Strike” entered its fourth day on Monday, targeting one plant from each of the Big Three automakers amid efforts to improve wages and benefits for its 146,000 members.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at where ‘normal’ interest rates might be today Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. Paul Hodges is the chairman of consultants New Normal Consulting.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 22 September. Turkey PE, PP spot prices stable to firm as market braces for tougher access to loans Turkish polyethylene (PE) spot values remained unchanged this week, while prices in the polypropylene (PP) market were stable to firm, according to market sources. European jet fuel prices steady as demand woes offset by supply constraints With peak travel demand season long gone, the rally observed in European jet kerosene prices, tracking gains in upstream values, stalled earlier this week, lacking demand-side support. September Europe PX contract price up by €50/tonne The European September paraxylene (PX) contract reference price has risen by €50/tonne month on month on the back of an increase in feedstock costs and firmer PX values in the influential Asian market. Eurozone inflation modest decrease in August could stifle further interest rate hikes Eurozone inflation edged down in August, according to the latest data from the EU’s statistics agency Eurostat on Tuesday. Europe MMA prices firm on lack of imports Europe methyl methacrylate (MMA) prices have firmed due to a lack of cheap imported material.