Clariant Closes Bioethanol Plant in Romania

Clariant, a sustainability-focused specialty chemical company, announced its decision to shut down its sunliquid® bioethanol production in Podari, Romania, and to downsize related activities of the business line Biofuels & Derivatives in Germany (Straubing, Planegg and Munich), said the company.

After developing the sunliquid® technology, Clariant had taken the decision in 2017 to establish its own commercial sunliquid® plant in Podari, which began producing bioethanol in the second quarter of 2022. In July 2023, Clariant started a strategic evaluation of the options for the plant after it became clear that the plant did not achieve Clariant’s targeted operational parameters.

Clariant management has concluded that, given continued losses, the economics of the plant in Podari cannot justify for Clariant to continue ramp up which would require significant additional capital expenditure. Following today’s announcement, activities within the business line Biofuels & Derivatives that supported the development and ramp-up of the plant will be downsized. Required capabilities to maintain the technology and to fulfill existing contractual obligations will be kept.

“After a careful review of all the strategic options, we have decided to close the Podari operation. We will work closely with employee representatives in Romania and Germany and are committed to finding solutions that are most socially responsible. For a company that focuses as much on innovation as we do, it is imperative to take firm decisions when a project does not fulfill expectations and to execute even more rigorously on our sustainable growth strategy,” said Conrad Keijzer, Chief Executive Officer of Clariant.

Clariant has also completed a preliminary financial assessment of the impact of this closure, as summarized in the table below. The company has concluded that restructuring costs and provisions relating to the closure and downsizing of approximately CHF 60 – 90 million, impacting EBITDA, will be incurred in December 2023. In addition, further impacts of approximately CHF 110 million will be incurred at the EBIT level, including a non-cash impairment to the current asset value of the Podari plant and other remaining assets.

These amounts will mainly be booked in December 2023 and will therefore be reflected in the full year 2023 results, due to be announced on 29 February 2024. Clariant anticipates a cash impact relating to the closure costs of approximately CHF 110 – 140 million in full year 2024. Additional costs of maintaining required capabilities relating to the technology licenses of CHF 10 – 15 million are anticipated in the full year 2024.

We remind, Clariant posted a 28% decrease on earnings before interest, tax, depreciation and amortisation (EBITDA) in the third quarter amid lower prices and volumes. Clariant expects to see an easing inflationary environment, but no economic recovery in the final three months of 2023, with macroeconomic uncertainties and risks remaining. Despite that, Clariant confirms its sales guidance for the full year 2023 of Swfr4.55bn–4.65bn, it said.

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China's State Power Investment Corp announced a USD5.85-B investment plan in northeast China to produce fuel from hydrogen produced from wind power, according to a company official and a local government report, said Hydrocarbonprocessing.

The projects, that include a 3.5 gigawatt wind power plant, a 164,000 metric ton per year hydrogen-making facility and 400,000 tpy each of sustainable aviation fuel (SAF) and methanol, will be built in Qiqihaer city of Heilongjiang province, according to a report carried on the city's official WeChat platform.

SPIC will first build a 10,000-tpy pilot plant making SAF from wind power based hydrogen applying technology from Tsing Energy Development Co, the report said, billing the project the first of its kind in China.

The report did not give a timeline building these plants, but a senior Chinese industry executive familiar with the investment told Reuters the SAF plant is slated for first fuel in late 2025.

The official, who declined to be named as these details are not public, said the technology involves blending hydrogen with carbon dioxide derived from corn-based ethanol.

Once the pilot project becomes successful it will be expanded to 400,000 tons annually by around 2030, the official added.

A SPIC representative confirmed the city government's report but declined to comment on the timelines of project building.

State-run SPIC has the largest renewables resources among China's state utilities, operating a total of 160-GW installed clean power capacity.

We remind, Mott Corporation, a global leader in filtration and flow control solutions, announced a new eight-figure agreement with South Korean refinery S-OIL. Mott and its Korean partner DL E&C are teaming up to provide critical filtration technology for S-OIL’s groundbreaking Shaheen project in Ulsan, South Korea.

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Mott Corporation, a global leader in filtration and flow control solutions, announced a new eight-figure agreement with South Korean refinery S-OIL. Mott and its Korean partner DL E&C are teaming up to provide critical filtration technology for S-OIL’s groundbreaking Shaheen project in Ulsan, South Korea, said Hydrocarbonprocessing.

This new partnership strengthens Mott’s position as one of the world’s top designers and manufacturers of filtration and flow control technology for a range of industries, including aerospace and defense, clean energy, healthcare, and petrochemical refining. Mott has delivered best-in-class engineering and technical services for customers in those industries and others for more than sixty years.

“This new partnership advances our strategy to apply our world class filtration and flow control technology to a variety of end markets,” said Patrick Hill, VP of Process Systems, Americas, at Mott. “We’re proud to partner with DL E&C to deliver this custom-engineered filtration system and play a part in the ambitious Shaheen project.”

The Shaheen project will produce chemicals including ethylene, one of the most widely used chemicals in the world, which enables production of everything from plastics to textiles. Mott’s advanced filter system removes fine particulates present in feeder streams for chemical conversion processes. The system is designed to run fully automated, 24 hours a day, 7 days a week without shutdown.

This announcement follows Mott’s acquisitions of Italian filtration supplier ASCO Filtri and Michigan-based water reclamation innovator Digested Organics. With the new partnership, Mott continues to diversify its business sectors and bolster its global network of partners and subsidiaries.

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Phillips 66 announced a 2024 capital budget of $2.2 B, including $923 MM for sustaining capital and $1.3 bn for growth capital. Excluding joint venture debt repayments due in 2024, the company’s 2024 capital budget is $2 bn, said Hydrocarbonprocessing.

“We continue to demonstrate capital discipline in support of our strategic priorities,” said Mark Lashier, president and CEO of Phillips 66. “The 2024 capital budget includes investing in our NGL wellhead-to-market value chain, completing the Rodeo renewable fuels facility and enhancing Refining performance. In addition, the capital budget is consistent with our plan to return $13 B to $15 B to shareholders by year-end 2024.”

Lashier added that the sustaining capital budget reflects $300 MM of efficiencies as a result of the company’s business transformation efforts. Phillips 66’s historical average sustaining capital spend was approximately $1 B per year prior to business transformation, and the consolidation of DCP Midstream adds approximately $200 MM in sustaining capital.

In Midstream, the capital budget of $985 MM comprises $392 MM for sustaining projects and $593 MM for growth projects focused on enhancing the company’s integrated NGL wellhead-to-market value chain. In addition, growth capital includes $250 MM related to the repayment of the company’s 25% share of the Bakken Pipeline joint venture’s debt due in 2024.

Phillips 66 plans to invest $1.1 B in Refining, including $412 MM for sustaining capital. Refining growth capital of $654 MM includes completing the conversion of the San Francisco Refinery in Rodeo, California, into one of the world’s largest renewable fuels facilities. Startup of the converted facility is expected in the first quarter of 2024. The conversion will reduce emissions from the facility and allow for the production of lower carbon-intensity transportation fuels. Refining growth capital will also support high-return, low-capital projects to enhance market capture.

We remind, Chevron Lummus Global LLC announced the completion and successful startup of an ISOTERRA unit as part of Chevron's renewable fuel conversion project at their El Segundo Refinery in Southern California. The ISOTERRA unit leverages both the refinery's existing assets and Chevron Lummus Global's proprietary catalyst and reactor internals technology to achieve exceptional diesel yields.

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Neste has partnered with Coleman Oil Company, a leading provider of fuels, biofuels, lubricants, and related products, to enable cities and businesses to have easier access to Neste MY Renewable Diesel in the state of Washington in the U.S., said Hydrocarbonprocessing.

This partnership expands the availability of Neste MY Renewable Diesel to key locations in Coleman Oil’s network of commercial fueling stations and other distribution channels, such as bulk fuel delivery and retail stations across Washington and offers this lower-emission fuel to the state’s construction, agriculture, heavy duty trucking industries, and municipalities. The partnership is expected to help the state reduce reliance on fossil diesel and make the transportation sector more sustainable.

“Washington State has demonstrated its commitment to sustainability by becoming the latest state to implement a Clean Fuel Standard. Today, Neste is supporting the state’s goal of reducing emissions from the transportation sector by providing renewable diesel to the companies and cities in Washington,” says Carrie Song, Vice President, Renewable Road Transportation, Americas at Neste. “We are excited to partner with Coleman Oil; their massive distribution network is crucial for us in making renewable diesel available across the state.”

“We are extremely excited to partner with Neste. Neste MY Renewable Diesel is a best-in-class product that will be at the center of our renewables strategy,” says Ian Coleman, President of Coleman Oil Company.

Made from sustainably sourced, 100% renewable raw materials, Neste MY Renewable Diesel can reduce greenhouse gas (GHG) emissions by up to 75%* over the fuel’s life cycle compared with fossil diesel. In addition to reducing GHG emissions, renewable diesel delivers strong performance. Because it does not contain sulfur, oxygen or aromatic compounds, it combusts cleaner. Additionally, Neste MY Renewable Diesel performs well in extreme cold conditions (down to -4°F/-20°C) and can be stored over long periods of time without deterioration, making it an ideal choice for businesses that operate in Washington, where the average daytime temperatures can range from the upper 30s to around 0°F (3° to -17°C) in winter.

We remind, in November 2023, the Ministry of Economic Affairs and Employment in Finland granted Neste an energy investment aid of EUR 1.96 million for heat recovery from the green hydrogen production being planned for the Porvoo refinery. The goal of the project, which is in the basic engineering phase, is to build a 120MW electrolyzer that produces green hydrogen for the refinery’s processes. In addition to green hydrogen, the production also generates heat that could be recovered. The investment decision readiness regarding the green hydrogen project is expected to be reached during 2024.

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