The Emergence of the Circular Economy as a New Market in the Petrochemical Sector
The Emergence of the Circular Economy as a New Market in the Petrochemical Sector AZoM
sdgtalks
In the energy industry, oil and gas continue to maintain a position of prominence, but the sector is currently undergoing a transition, changing its focus from crude oil resources for hydrocarbon-based fuel production to chemical manufacturing.
S&P Global Commodity Insights recently released revisions to its projections for direct crude oil-to-chemical capacity (COTC) growth, with an anticipated significant increase to 6 million barrels per day (b/d) by the year 2050.
This projection considers the anticipated decrease in crude refinery runs, which could result in a net loss of 10.7 million b/d in comparison to levels recorded in 2022. By 2050, a complete investment of $137 billion is anticipated for more petrochemical production (only the refinery portion of the investments is included, i.e., COTC & integrations, to the exclusion of further chemicals’ manufacturing process investments).1
Combined with a high degree of investment, the petrochemical industry is also seeing substantial transformations due to market forces and trends.
This article will thus explore some of the core developments that have taken place in the fast-growing and transformative petrochemical market, with a focus on the increasing need for circular economy initiatives.
It will also look at selected PAC solutions that assist in addressing current and future needs for examining a variety of streams like heavy crude for COTC, waste plastic pyrolysis oil (WPPO), and bio-based streams to be processed in petchem-FCC or steam cracker units.
Market Forces and Recent Trends Shaping the Petrochemical Industry
There are a number of trends and market forces that are shaping the future landscape of the petrochemical industry. These include economic factors, environmental regulations, public pressure, and technological advancements.
The recent advancements include revamping existing units for higher yields of petrochemical building blocks, novel direct feedstock conversion techniques, improved chemical recycling technologies, and advanced catalysis.
Companies need to find a way through these trends and forces to ensure efficiency and arrive at informed investment decisions, offering both uptime and innovation and allowing future-proofing of their existence during a disruptive era. 2
Due to public, financial, environmental, and technological forces, specific trends have appeared that can alter how companies conduct their businesses, as described below.
Expanding the Use of Plastics and Circular Economy Incentives
Plastics continue to play an increasingly important role across a number of different industries, including in the production of green technology, such as electric cars, wind turbines, and solar panels.
The overall amount of plastics that have been manufactured globally since the early 1900s has reached ~10 billion tons and more than half of this remains in the form of waste.³ This is mainly caused by the low average global recycling rate of plastics, estimated at around 9 %.³
The increasing worry surrounding plastic waste has resulted in increasing emphasis on circular economy initiatives. Efforts to increase sustainable consumption of plastic and embrace circular economy approaches were highlighted at the United Nations Environment Assembly meeting in 2022, where a consensus was reached to establish a global treaty on plastic pollution by 2024.2,4,5
Shrinking Margins of Refineries
Refineries, which are the petrochemical industries’ primary source of feedstock, are dealing with narrowing margins. This is due to factors like intense competition, unstable crude oil prices, and stricter environmental regulations.
The result is refineries that are navigating diversification strategies, investing in petrochemical units, and adopting more sustainable practices for enhanced profitability. This has meant a rise in conversion and integration technology investing, including COTC conversions. 6
An key example of this is the recent investment in COTC technology by S-Oil, a South Korean refiner under the ownership of Aramco. Such initiatives are expected to set a precedent for numerous upcoming endeavors. It is anticipated that there will be a significant rise in COTC capacity, with an expected addition of 6 million barrels per day (b/d) by 2050.7
Decarbonization Attempts and Reduced Fossil Fuel Dependency
Mainly kickstarted by investors and policymakers who are sensitive to ESG-related topics, companies are looking for alternatives to fossil fuels and are investing in technologies that will help to reduce overall greenhouse gas emissions, aiding in the fight against climate change.
Worldwide trends in increased e-mobility, home office working, and the desire for greater fuel efficiency reinforced this idea and decreased fossil fuel consumption. To stay competitive, refiners are looking into ways to reposition themselves and use existing equipment in new ways.
This is being managed through a number of strategies such as investments in refinery-petrochemical integrations, fluid catalytic cracking (FCC) optimizations (petroFCC) for increased propylene yield, propane dehydrogenation (PDH) investments requiring relatively smaller capitals and heavy investments for COTC technologies.2,8
Expanding Use of Bio-Based Streams and Co-Blending
There is an increase in the petrochemical industry in adopting bio-based streams and blends to reach sustainability goals and limit dependence on fossil-based feedstocks. With this, the use of bio-feeds and waste plastic pyrolysis oils is on the rise worldwide.
Heavy feeds are also being used to address profitability concerns, though product quality requirements and volatile markets may still drive the technical and economic feasibility of feedstock switching. This highlights the importance of detailed characterization, impurity analysis, and group-type analysis of heavy oils and newly emerging feedstocks.
Emerging Needs of the Market
As a result of the trends that are heavily driving the players in their daily operations and future investment decisions and the strong forces shaping the market, several current and future needs stand out.
Those who are willing to participate in a sustainable future and are committed to ensuring long-term success in the circular economy are strongly encouraged to investigate the
SDGs, Targets, and Indicators
SDGs Addressed:
- SDG 7: Affordable and Clean Energy
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 12: Responsible Consumption and Production
- SDG 13: Climate Action
- SDG 14: Life Below Water
- SDG 15: Life on Land
Targets and Indicators:
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 7: Affordable and Clean Energy | 7.2: Increase the share of renewable energy in the global energy mix | – |
| SDG 9: Industry, Innovation, and Infrastructure | 9.4: Upgrade infrastructure and retrofit industries to make them sustainable | – |
| 9.5: Enhance scientific research and upgrade technological capabilities of industrial sectors | – | |
| SDG 12: Responsible Consumption and Production | 12.2: Achieve sustainable management and efficient use of natural resources | – |
| 12.5: Substantially reduce waste generation through prevention, reduction, recycling, and reuse | – | |
| SDG 13: Climate Action | 13.2: Integrate climate change measures into national policies, strategies, and planning | – |
| SDG 14: Life Below Water | 14.1: Prevent and significantly reduce marine pollution of all kinds | – |
| SDG 15: Life on Land | 15.1: Ensure the conservation, restoration, and sustainable use of terrestrial and inland freshwater ecosystems | – |
Note: The article does not explicitly mention specific indicators related to the targets mentioned above. However, the targets are relevant to the issues discussed in the article.
Copyright: Dive into this article, curated with care by SDG Investors Inc. Our advanced AI technology searches through vast amounts of data to spotlight how we are all moving forward with the Sustainable Development Goals. While we own the rights to this content, we invite you to share it to help spread knowledge and spark action on the SDGs.
Fuente: azom.com
Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.
