Japan aims to eliminate gasoline vehicles by mid-2030s, boost green growth

MOSCOW (MRC) -- Japan aims to eliminate gasoline-powered vehicles in the next 15 years, the government said on Friday in a plan to reach net zero carbon emissions and generate nearly USD2 trillion a year in green growth by 2050, reported Reuters.

The "green growth strategy," targeting the hydrogen and auto industries, is meant as an action plan to achieve Prime Minister Yoshihide Suga's October pledge to eliminate carbon emissions on a net basis by mid-century.

Suga has made green investment a top priority to help revive the economy hit by the COVID-19 pandemic and to bring Japan into line with the European Union, China and other economies setting ambitious emissions targets.

"The government has set up ambitious targets to achieve a carbon neutral society in 2050," said Yukari Takamura, professor at the University of Tokyo.

"Making clear goals and policy direction in the green growth strategy will give incentives for companies to invest in future technology."

The government will offer tax incentives and other financial support to companies, targeting 90 trillion yen (USD870 billion) a year in additional economic growth through green investment and sales by 2030 and 190 trillion yen (USD1.8 trillion) by 2050.

A 2 trillion yen green fund will support corporate investment in green technology.

The plan seeks to replace the sale of new gasoline-powered vehicles with electric vehicles, including hybrid and fuel-cell vehicles, by the mid-2030s.

To accelerate the spread of electric vehicles, the government targets slashing the cost of vehicle batteries by more than half to 10,000 yen or less per kilowatt hour by 2030.

It aims to boost hydrogen consumption to 3 million tonnes by 2030 and to about 20 million tonnes by 2050 from 200 tonnes in 2017, in areas such as power generation and transportation.

The strategy identifies 14 industries, such as offshore wind and fuel ammonia, and targets the installation of up to 45 gigawatts (GW) of offshore wind power by 2040.

Japan also aims to use renewable energy "as much as possible" by 2050, mainly through off-shore wind farms, with reference goal of renewable energy sources accounting for 50% to 60% of the nation's power by 2050, up from less than 20% now, while reducing reliance on nuclear power.

As MRC informed earlier, Japan will aim to make hydrogen a power source viable enough to produce the output of more than 30 nuclear reactors by 2030, the Nikkei newspaper reported in December, 2020. To achieve that goal in its bid to reduce carbon emissions Japan will have to make a technology now in its infancy commercially viable at scale, as the world accelerates an energy transition to prevent the worst impacts of climate change. Japanese companies including Toyota Motor Corp on 7 December, 2020, said they established a new organisation, the Japan Hydrogen Association, to promote the creation of a hydrogen supply chain in the country. By 7 December, 88 companies had joined the initiative, including Japan's biggest refiner ENEOS Holdings Inc and trading house Mitsui & Co Ltd.

We remind that ENEOS Corporation (formerly known as JXTG Nippon Oil & Energy) took its larger naphtha cracker in Kawasaki off-line on 4 December 2020 for repairment after a technical issue reported at the butadiene separation unit in late November. The cracker was operating at 95% capacity before the shutdown in early December. The cracker with an annual capacity of 515,000 tons/year of ethylene, 300,000 tons/year of propylene, and 105,000 tons/year of butadiene would be shut for a month. The company’s smaller cracker at the same location is not affected by the issue.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- The Federal Reserve Bank of Dallas has appointed LyondellBasell CEO Bob Patel to its Houston branch board of directors for a term ending 31 December 2023, according to Chemweek.

Patel has served as LyondellBasell CEO since 2015. Patel also serves on the board of Union Pacific.

As MRC reported previously, in early December 2020, LyondellBasell, one of the world's largest plastics, chemicals and refining companies, announced it had joined the United Nations (U.N.) Global Compact, the world's largest corporate sustainability initiative. Under the U.N. Global Compact, signatories are encouraged to align their operations and strategies with key principles on human rights, labor and anti-corruption.

We remind that in September 2020, LyondellBasell announced that Duqm Refinery and Petrochemical Industries Company LLC (DRPIC) selected LyondellBasell's world-leading polypropylene (PP) and high-density polyethylene (HDPE) technologies for a new facility. The new plants will comprise of a PP plant that will utilize LyondellBasell's Spheripol PP process technology to produce 280,000 metric tons per year (m.t./yr) of PP and a 480-m.t./yr high-density polyethylene (HDPE) plant which will utilize LyondellBasell's Hostalen ACP process technology and will be built in Al Duqm, Oman.

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world"s largest licensor of polyolefin technologies.
MRC

MOSCOW (MRC) -- The global transition toward a lower-carbon future is rapidly changing the energy and feedstocks landscape for chemical and energy companies as they head into 2021. The pandemic caused worldwide crude oil demand to slump 10% in 2020, dramatically accelerating preparations by the refining sector to shift away from fuels toward a petrochemicals-centric future, reported Chemweek.

The world will still consume large amounts of oil for decades, but COVID-19 “reset world oil demand at a lower level,” says Jim Burkhard, vice president/crude oil markets at IHS Markit. Forecast global crude oil demand is now 3.5-4.0 million b/d less in the late 2020s compared with the pre-COVID outlook. “In our base case, world oil demand reaches a plateau in the mid-2030s. However, we do not rule out the possibility that 2019 was the peak in world oil demand, particularly if COVID-19 is not contained,” Burkhard said, speaking at the World Methanol Conference, held recently by IHS Markit in a virtual format. Last year may be remembered “as a pivot point when the energy transition moves from decades of slow motion to a faster pace of change,” he said.

The ongoing shift toward increased demand for oil as a petchems feedstock is forecast to gain momentum in 2021 on the back of recent capacity additions in China and the US, according to the latest oil market report by The Organization of the Petroleum Exporting Countries (OPEC; Vienna, Austria). Petchems feedstock and industrial fuels will gather pace as economic activity recovers, with “all products estimated to grow year on year following the steep impairment in 2020,” it says. Global oil demand will reach a projected 95.89 million b/d in 2021, it adds. OPEC projects that global oil demand declined by 9.77 million b/d in 2020 to 89.99 million b/d.

Total oil demand in China grew for five consecutive months to above 13 million b/d in October 2020, with “a strong performance in petrochemical feedstocks, with both liquefied petroleum gas (LPG) and naphtha outperforming other products,” it says. Naphtha demand in China grew by 290,000 b/d year-on-year (YOY) in October and LPG demand is also on a rising trend, growing by 600,000 b/d YOY, it says. Increased runs in propane dehydrogenation (PDH) plants due to steady demand for plastics supported LPG consumption. “Petrochemical feedstock, especially LPG, is expected to perform better than other fuels and will be a key driver for China’s oil demand growth in 2021,” it adds.

Oil demand growth in the Americas is projected to be well supported in 2021, led by “a healthy petrochemicals sector, with ethane-cracking capacity in the US estimated to provide solid support for demand growth,” OPEC says.

Worldwide base chemicals production is forecast to grow by 4.2% in 2021 after a decrease of 1.2% in 2020, according to ACC. Bulk petrochemicals and organics output, meanwhile, will rise an estimated 4.0% worldwide this year, following a decline of 2.4% last year, it says.

Total worldwide base chemicals demand is currently about 650 million metric tons/year (MMt/y), according to Dewey Johnson, global vice president/chemicals at IHS Markit. Demand plunged about 10 MMt in 2020 for the six major value chains of ethylene, propylene, methanol, chlorine, benzene, and para-xylene (p-xylene), which together represent about 80% of the total, but is expected to “recover significantly” starting in 2021, he says. Ethylene demand is expected to return to its pre-COVID growth of about 6 MMt/y in 2022.

The typical capacity-induced downcycle that the sector was already experiencing was exacerbated by the recession in 2020, Johnson said at IHS Markit’s recent Global Chlor-Alkali & Vinyls online event. Additional capacity will continue to enter the industry, and global chemical earnings by value chain are facing “a sharp decline in profitability for 2–3 years, with recovery by 2023–24,” he said. Chemicals demand growth will continue to be at GDP rate or above, however. “There will be a strong chemical upcycle expected in 2025–26,” Johnson said.

An acceleration in refinery rationalization has been seen around the world as a result of COVID-19 and this could impact feedstocks, says Duncan Clark, vice president/aromatics and fibers at IHS Markit. More than 3.0 million b/d of refining capacity is earmarked for closure in Asia, Europe, and North America, with more expected, he said at IHS Markit’s base chemicals forum in December.

“This should be of concern to aromatics producers, who potentially may face some shortages or the closure of their refinery and consequently a lack of feedstock, even from a virtual refinery linkage. Integrated refineries, aromatics, and petchem complexes have tended to perform better than the standalone refineries, but clearly this is going to be a risk going forwards,” Clark said.

As MRC informed earlier, Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form in Russia rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Brazilian petrochemicals producer Braskem reported in a document sent to the regulator that its Mexican unit, Braskem Idesa, partially resumed polyethylene production under the terms of an "experimental business model", reported CA Posts.

Braskem Idesa partially halted production last month following an interruption in natural gas supplies, after the federal government decided not to renew the ethane supply contract with the company. The outage caused the total suspension of the processes of its Ethylene XXI plant. The group said it will take legal action to defend its rights but that it cannot predict when the Mexican unit will be fully operational, given the uncertainty related to its gas supplies.

Since taking office at the end of 2018, the administration headed by Lopez Obrador has canceled or asked to review millionaire energy contracts , a policy that has generated concern among the main investment partners in the country, such as the United States, the European Union and Canada. In the case of Braskem Idesa, the national oil company Pemex accumulated millionaire penalties for failing to comply with the supply of natural gas to the Ethylene XXI petrochemical complex.

As MRC wrote before, Brazil’s state-run oil company Petrobras is seeking 800 million reais (USD152 million) in compensation from engineering group Odebrecht in arbitration proceedings over its alleged violation of the shareholders agreement in petrochemical company Braskem. Odebrecht is seeking to sell its 38.3% stake in Braskem SA, while Petrobras aims to offload its 36.1% stake.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Dear readers of MRC!

We congratulate you on Christmas and New Year!

We wish you every happiness this Holiday season and throughout the coming year.

All of MRC staff join in saying "thank you" and wishing you a happy holiday and prosperous new year.

On this special day, we wish you happiness, prosperity and success, hoping that we continue our association through many more wonderful years ahead!

Best wishes,

MRC staff.

MRC