Chemicals recycling technologies that would pave the way for petrochemicals to avoid crude oil as feedstock are still not sufficient to drag down overall demand in coming decades, according to the International Energy Agency’s petrochemicals analyst.
Kim Tae-Yoon said that “there is a chance” of innovations in chemicals recycling to catch up in coming years. But the world’s overall thirst for petrochemicals derivatives like plastics will mean that crude oil remains the fundamental feedstock.
The IEA’s World Energy Outlook (WEO) presented in Paris this week includes two scenarios. First, what it calls Stated Policies Scenario taking into account current pledges made by countries regarding energy use, although as climate warming becomes more of a factor those policies may change in the future.
The second scenario, which the IEA has termed the Sustainable Development Scenario, “provides a strategic pathway to meet global climate, air quality and energy access goals in full” as per the 2015 Paris Agreement to limit global warming.
In both scenarios, however, petrochemicals’ demand from crude oil is set to increase.
“We recognise the chance [for chemicals recycling technologies to become more common], we know there are companies that are working in innovation,” said Kim.
“However, among the options on the table until 2040 there are not too many technologies that can have a material impact on petrochemicals production … Further technological innovation will be needed.”
Even if recycling rates increased to 35-50% globally – the most optimistic scenario the IEA envisages – this would not be sufficient to “make a big dent” in petrochemicals’ demand for crude oil.
Kim said, however, that some encouraging signs are coming from certain companies’ efforts to produce feedstocks from plastic waste, which would be a sign of true circularity if successfully commercialised.
These efforts, however, need to be scaled up, the analyst said.
However, there is so much to be done in terms of recycling for the chemicals industry to reduce its dependence on crude oil, and the answer can only come from governments – with regulatory change – and companies, voluntarily or forced by regulation.
But the most important factor driving petrochemicals demand for crude oil is the growth of emerging economies, whose needs for plastics are exepcted to rocket in coming decades.
Kim said advanced economies use up to 20 times as much as plastics as emerging economies such as India: the demand growth potential is massive.
Equally, a disparity in recycling policies and low efficiency in recycling processes would also cause the petrochemicals industry to continue having crude oil as its main feedstock.
“Although efforts to increase recycling are gaining traction in Europe, Japan and South Korea, these efforts are far outweighed by surging plastic consumption (and disposal) in developing economies, where policies and recycling infrastructure are not yet widespread,” he said.
“Equally, there is low efficiency of the recycling processes: only a small portion of collected scrap is recycled to displace virgin plastics. There are also significant value losses after collection, during sorting and reprocessing processes, which reduce the saving in oil demand.”
BIOFEEDSTOCKS: PETCHEMS COME LAST
The chemicals industry has been for years debating whether real change could come from green feedstocks that allow reducing its dependence from crude oil drastically.
The idea has not caught up because crude oil is abundant and cheap, when compared with potential biofeedstocks.
Securing the biomass to produce those biofeedstocks also presents a challenge, as arable land is limited and precious.
Moreover, Kim said, higher production of biofeedstocks would run parallel to higher demand from a range of sectors – mainly transport or heating – that would place petrochemicals at the end of the queue without further policy interventions.
“In the Sustainable Development Scenario, industries compete for this biomass-based feedstock. There would be many energy uses that require biomass, and there are already some policies in place to support biofuels in transport or heating,” said Kim.
“Therefore, chemicals would need to compete with these sectors to secure this feedstock. We don’t see biomass being a game changer for the petrochemicals industry without further technological breakthrough or stronger policy push.”
IEA’s SUSTAINABLE SCENARIO VS REALITY
The pathway to achieve global climate goals – as envisaged in the IEA’s Sustainable Development Scenario – clashes, year after year, with reality.
Carbon dioxide (CO2) emissions and energy consumption reached new highs in 2018, and large polluting countries like the US have withdrawn from the 2015 Paris Accord to limit global warming.
Kim conceded that the world is “definitely not on the right path” and the IEA sees a “very deep disconnect” between the ambitions established in the Accord and the reality of, among other worrying factors, more coal-based power plants being set up globally or the use of crude oil rising apace.
“Fossil fuels use remains stubbornly high in the energy mix, and a lot needs to be done,” he said.
The analyst said that apart from potential new sources of energy, the world “cannot ignore the existing stock” of building or industrial assets that are far from being energy efficient.
For instance, the large number of coal-fired power plants around the world could be retrofitted with carbon capture, utilisation and storage (CCUS), repurposed to focus on providing system flexibility, or retired early to achieve a significant reduction in emissions.
CCS: THE ELEPHANT IN THE ROOM
CCS technologies have proved to be effective in reducing CO2 emissions, but their implementation has been very poor and costs remains high.
The IEA has always been a keen advocate of the technology, and every year demands policymakers’ support to give CCS a push – without success so far.
However, Kim preferred to see the glass half full and highlighted how the crude oil refining sector has made some progress in adopting CCS technologies.
“Some promising signs come from the efforts made in the production of hydrogen in crude oil refining. Some companies are installing some CCS in SMR [steam methane reformer] units to produce hydrogen in refineries, and also to produce hydrogen which goes into ammonia and methanol production,” he said.
“If you look at all industrial sectors, there are some segments where CCS can be applied at a relatively low cost. At the lower cost segments [like refining], some efforts have been made. If there was some strong policy support, this could expand to other segments.”
By Jonathan Lopez
Source: ICIS News
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