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Feedstock Supply & European Competitiveness Building a Sustainable European Chemical Industry Alastair Hensman, Senior Vice President Helsinki Chemical Convention 24 October 2019
Feedstock Supply & European Competitiveness
Building a Sustainable European Chemical Industry
Alastair Hensman, Senior Vice PresidentHelsinki Chemical Convention
24 October 2019
Nexant IntroductionThe Petrochemical IndustryWhere we are and how we got here…DecarbonisationImpacts on the IndustryThe Developing Sustainability ChallengeImpact of recycling on the IndustryImpact on CompetitivenessHow can Sustainability improve Competitiveness?Industry ResponseA future for Chemicals in Europe
Agenda
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1 King’s Arms YardLondonEC2R 7AFUnited Kingdom
T: +44 20 7950 1577M. +44 7717 631440E. [email protected]
Energy & Chemicals Advisory
Alastair HensmanSenior Vice President
1 King’s Arms YardLondonEC2R 7AFUnited Kingdom
T: +44 20 7950 1564M. +44 7786 276317E. [email protected]
Energy & Chemicals Advisory
Eric HudsonManaging Consultant
Nexant IntroductionAdvising the Industry since the 1960s…..
Nexant advises clients across the Global Energy and Chemicals value chain
October 2019 4
The Petrochemical IndustryHow we got here
It is easy to forget the capabilities of a barrel of oil;Over 60 years of development of a versatile downstream industry
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GASOLINEFOR 650
MILE TRIP
19GALLONSNAPHTHA
1 BBL OFPETROLEUM
(42 GALLONS)
OR
ETHYLENE
PROPYLENE
BUTADIENE,BUTENES
AROMATICS
FUEL FORABOVE
ETHYLENE GLYCOLPOLYETHYLENE
POLYPROPYLENEACRYLONITRILE
ELASTOMERS
CAPROLACTAM
21 SHIRTS6 GARBAGE CANS OR 276SQUARE METERS OF FILMFOR GREENHOUSES160 YARDS OF WATER PIPE4 BEER CASES OR30 ROLLS OF TWINE21 SWEATERS OR5 BLANKETS
1 CAR TIRE OR 13 BICYCLE TIRES
500 PAIRS PANTY HOSE
3 AUTOMOBILE TUBES OR17 BICYCLE TUBES
The European IndustryKey Challenges
Multiple external factors are influencing policy and economics
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Global refining and energy sectors have seen confidence return, but significant changes appear underway
10Nexant Steering Meeting Bazan February 2019
Renewables continue penetration into power
Air Qualityimpact on Diesel
Tipping point for electricvehicles imminent?
US becomes anenergy exporter
Renewed enthusiasm for Gas
Oil supported over $60per barrel?
Damietta LNG restart?
Refined Products
UK Q4 2018
Automotive focus on efficiency and electrification, adding to the pressures on the European refining sector.
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2005 2010 2015 2020 2025 2030LPG NaphthaGasoline Kerosene / Jet FuelDiesel / Gas Oil Residual Fuel Oil
2005 2010 2015 2020 2025 2030 2035Gasoline Diesel LPG/CNG Flex-fuelHEV BEV PHEV LSEV
Global PassengerVehicle Population
European Refined Product Supply
European refineries will become less attractive as feedstock suppliers…
The Developing Sustainability ChallengeHow can Sustainability make a difference?
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The industry must respond to the rapidly escalating concern about the impact of plastic wastes on the natural environment
Introduction
Globally Middle Classes continue to grow, society is uncovering inadequate waste management systems, and the volume of waste entering our environment appears to be increasing at an alarming rate.
Consumer facing brand have been quick to promote their initiatives to address the problem…..
Source of image: https://imgur.com/r/wtf/noKQM
Waste has no value, so what can we do about it?
Yangtze River, China
The idea of a Circular Economy was developed to reduce waste and encourage reuse and recycling
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Recycling
UseDesign & Production
Reuse
Virgin Feedstock
Other Material Streams
Composting
LeakageEnergy Recovery
Future Circular Economy
Waste Generation
98% Virgin
Feedstock40%
Landfilled
32% Leakage
14% Collected for Recycling
4% Losses
8% Secondary Recycling
2% Closed Loop
Recycling
WTWE
14% Incineration
The ideal circular economy will greatly reduce the amount of virgin feedstocks we useSource: Adapted from the Ellen MacArthur Foundation: The New Plastics Economy, Rethinking the Future of Plastics, 2016
Current Status of Circular Economy
Common Applications Ease of Recycling Recycle Products
PET Plastic bottles, food packaging Easy Fibres, bottles
HDPE Milk cartons, shampoo bottles, plastic bins, cleaning products Easy Cartons, bins, pallets,
garden furniture, pipes
PPTupperware, bottle caps, toys,
bumpers, luggage, carpet fibres and filaments
Easy Clothing fibres, foodcontainers, car parts
PVC Pipe fittings, window fittings, car parts, food trays, food packaging Moderate Pipes, packaging
LDPE/LLDPE Shopping bags, foils Moderate Shopping bags, bin liners, plastic furniture
PSTakeaway boxes, plastic cutlery,
protective packaging, toys, insulation
Difficult Packaging
Other Crisp packets, salad bags, baby bottles, CDs Very difficult N/A
PET, PP and HDPE are commonly recycled plastics, while PVC, LDPE and PS recycling is more challenging and occurs on a smaller scale
15Helsinki Chemical Convention October 2019Disposable/single useDurable application
These trends will see a significant penetration of recycle sourced materials into the European polymer sector in the next decade
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WE Recycled Material Penetration Nexant forecast 2019 – 36MT
Recyclate Virgin
2030 > 45MT
Recyclate Virgin
Building a Recycled Polymer BusinessPractical Technologies
Chemical Recycling is best matched to allow continued production of premium product
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Resources Operations Customer Operations
Consumer Use End of Use
Reduce; Reuse
Remanufacture
Mechanical recycling
Chemical recycling (monomer)
Chemical recycling (Pyrolysis)
Chemical recycling (Gasification)
Energy recovery (Incineration)
Maximum resource recovery or carbon
saved
GHG Emissions
CO2 EmissionsPower
Using Specialities to optimise Product Performance is a key offering for European Producers
Chemical Recycling is best matched to allow continued production of premium product
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Chemical recycling (monomer)
Chemical recycling (Pyrolysis)
Chemical recycling (Gasification)
Useful for condensation polymers: polyesters, nylons, polycarbonate Transforms a single polymer waste input; requires sorting of input depending
on process Best recovery / recycling process for material, energy, carbon recovery
2-20T/d pyrolysis plants in Spain, 10y experience making(TACOIL-Thermal Anaerobic Conversion) oil from waste plastic (1kg waste->0.9l of fuel) Port of Amsterdam; 100T/d plastic waste converted to marine fuel, 35 million
litres/y
Preparation of Refuse Derived Fuel (scraps of paper, cardboard, wood, plastic, food…) Conventional Fischer Tropsch processing of Syngas Highest energy intensity of chemical recycling options
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Waste to oil technology has been around for many years but failed to commercialize due to technical, economic and scale-up problems
Waste Plastics to Fuel and Chemicals
In 1982, the Greater Manchester City Council collaborated with the University of Manchester to develop a process for the conversion of municipal waste to synthetic crude oil to alleviate the waste disposal problem.
The Circular EconomyCompetitiveness Implications
Sustainable feedstocks alone cannot improve the competitiveness of European cracking…
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CASH
COS
TGLOBAL CAPACITY
Capital recovery charges and operability issues mean that any recycled feedstock is likely to increase costs for European producers
ETHANE MIXED FEED NAPTHA
Shifting towards more efficient feedstocks can mitigate this impact and also reduce the industry’s environmental footprint
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0%
50%
100%
Ethane Propane NaphthaEthylene PropyleneButadiene Other
CASH
COS
T
GLOBAL CAPACITY
Steam CrackerFeedstock Efficiency
ConclusionsEmbracing Sustainability to build a Competitive Industry in Europe
Industry can implement a Circular Economy if it also leverages the advantages available from highly efficient feedstocks
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Future Circular Economy
The actual circular economy needs reinforcing with cost advantaged and efficient feedstocksSource: Adapted from the Ellen MacArthur Foundation: The New Plastics Economy, Rethinking the Future of Plastics, 2016
Existing & New Feeds
Recycle Feedstock
+ Efficient/New Feedstock
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