Petrochemicals and products derived from them, including plastics, fertilizers, packaging, clothing, digital devices, medical equipment, detergents and tires, are becoming the largest drivers of global oil demand, according to a major study by the International Energy Agency (IEA; Paris). The IEA said today that petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil/day (b/d) by then. They are also poised to consume an additional 56 billion cubic metres (bcm) of natural gas by 2030, and 83 bcm by 2050.
The report, titled The Future of Petrochemicals, is part of a new IEA series focusing on ‘blind spots’ of the global energy system – issues that are critical to the evolution of the energy sector but that receive less attention than they deserve. The report is among the most comprehensive reviews of the global petrochemicals sector, the IEA says.
“Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves. Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation,” said Fatih Birol, IEA’s executive director.
Demand for plastics has outpaced all other bulk materials such as steel, aluminum, or cement, nearly doubling since 2000. Advanced economies currently use up to 20 times more plastic and up to 10 times more fertilizer than developing economies on a per capita basis, underscoring the huge potential for global growth.
The dynamism of the petrochemical industry is also driving new trends around the world. After decades of stagnation and decline, the United States has re-emerged as a low-cost location for chemicals production thanks to the shale gas revolution, and is now home to around 40% of the global ethane-based petrochemical production capacity. Meanwhile, the Middle East remains the lowest cost centre for many key petrochemicals, with a host of new projects announced across the region.
While petrochemicals provide substantial benefits to society, including a growing number of applications in various cutting-edge, clean technologies critical to sustainable energy systems, production, use and disposal of petrochemical-derived products present a variety of climate, air quality and water pollution challenges that need to be addressed. Substantial increases in recycling and efforts to curb single-use plastics are underway, especially in Europe, Japan and Korea, but the impact these efforts can have on demand for petrochemicals is far outweighed by sharply increasing plastic consumption in emerging economies.
To address these challenges, the report outlines a clean technology scenario (CTS), which provides an alternative future in line with key UN sustainable development goals, such as climate action, responsible consumption and life below water, among others. The scenario provides an ambitious but achievable pathway to reduce the environmental impacts of petrochemicals: air pollutants from primary chemicals production decline by almost 90% by 2050; direct CO2 emissions reduce by nearly 60%; and water demand is nearly 30% lower than in the base scenario. It also emphasizes waste management improvements to rapidly increase recycling, thereby laying the groundwork to more than halve cumulative, ocean-bound, plastic waste by 2050.
In the CTS, petrochemicals become the only growing segment of global oil demand. Despite near-tripling in plastic waste collection by 2050, the limited availability of cost-effective substitutes for oil feedstock means that oil demand for petrochemicals remains resilient.
The IEA’s Future of Petrochemicals report was developed with input from governments, industry and other key stakeholders, and seeks to bring the sector the attention it deserves in the global energy policy debate. It also provides ten key policy recommendations to build a more sustainable and efficient petrochemicals industry, the IEA says.
By: Natasha Alperowicz
Source: Chemical Week
Sika AG (Baar, Switzerland) has opened a new plant in Santa Cruz de la Sierra, thus doubling its production capacity for mortar and concrete admixtures in Bolivia. With this new facility in one of the country’s main industrial agglomerations, Sika is positioning itself for continued growth in the dynamic Bolivian construction market.
Chevron Corporation (NYSE: CVX) and Renewable Energy Group, Inc. (NASDAQ: REGI) (REG) announced on Monday a definitive agreement under which Chevron will acquire the outstanding shares of REG in an all-cash transaction valued at $3.15 billion, or $61.50 per share.
Lotte Chemical Corp. will invest 10 trillion won ($8 billion) on hydrogen and battery materials through 2030 to achieve annual revenue of 50 trillion won and carbon neutrality. The Korean chemical producer on Thursday unveiled its new corporate vision outlining key corporate strategies with focus on growth through hydrogen energy and battery materials businesses.