WPC 2021: Focus on resilience, sustainability, circularity ...

Accelerating trends in deurbanization, energy transition, and sustainability favor future demand for the global chemical industry, but increased collaboration is a must if the industry is to achieve circularity and solve issues such as plastic waste, executives told the IHS Markit World Petrochemical Conference 2021.

"There are so many trends that are accelerating, with additional trends around deurbanization and the energy transition," LyondellBasell CEO Bob Patel said during the "Building Resilience, Agility, and Innovation, in an Enhanced Global Role" session at the conference.

"In general, all of these trends related to deurbanization probably favor demand for our industry. One negative could be less miles driven, but in terms of chemicals and plastics we could see a lot more demand as a result of this," he said.

A higher rate of adoption in markets such as electric vehicles (EVs), particularly in Europe and the US, is a trend "that's very durable and likely to accelerate as time goes on," Patel said. The industry is likely to benefit from "tailwinds in terms of packaging, EVs, and other things that will benefit the chemical industry. I think they're here to stay, and I think we'll continue to see benefits from those," he added.

Circularity will remain important in the longer term, according to Patel. About 380 million metric tons/year of plastics are produced worldwide, with 70% of the waste collected but only 15% recycled, said Patel. "That means we're probably leaving $80-120 billion of value behind in the waste that doesn't get recovered and reused," he said.

The Alliance to End Plastic Waste was formed to have a "real impact" on ending plastic waste and prevent it from entering the environment, but "we as a company or one industry alone cannot solve this problem. This problem will only be solved, and plastic waste can only be ended, if we collaborate across the value chain … We must close the loop," he said.

Opportunities

Thomas Casparie, executive vice president/Shell Chemicals, described addressing climate change as the industry's biggest challenge, but he also sees it as an opportunity. "Among many other things, we're going to need more solar panels, more wind turbines, more lightweight material, better batteries. I could go on, but all of these products our industry actually provides the building blocks for. Demand for our products will continue to grow, throughout the energy transition," he said.

Achieving net-zero carbon dioxide emissions is "going to be a huge task, and if you look at our current business plans, they will not get us there," Casparie said. "They will need to change over time."

The chemical industry can, however, improve the efficiency of its existing assets, with Shell renewing cracker furnaces at its Moerdijk complex in the Netherlands, replacing them with only half as many but with the same overall total output, "effectively improving energy efficiency by 50%," he said.

Reducing reliance on fossil fuels is a key area moving forward and using plastic waste as a feedstock forms part of that ambition, said Casparie. "But we also believe in other renewable feedstocks, so we are very much investigating the use of bio, not only as a cracker feedstock but also potentially as a direct route to end products."

Mark Lashier, Chevron Phillips Chemical (CPChem) president and CEO, said the pandemic had "highlighted how essential our products are to everyone in society around the globe. We saw record sales and record volumes for our products throughout the pandemic, but we had to shift constantly to the changing demand patterns."

The industry was already in a downcycle, but over the long term CPChem "expects petrochemicals demand to grow at above GDP rate," Lashier said. "In spite of the pandemic, we continue to see that kind of growth. We're going to see that accelerate as economies reopen around the world, and we're starting to see that today."

The pandemic "has certainly tested our resilience," said Karen McKee, president of ExxonMobil Chemical. "We couldn't pursue our carefully considered plans in our usual way," she said.

Original reporting by Chemical Week.