Energy

BARCELONA (ICIS)–ExxonMobil is selling its refinery at Gravenchon, France, to Canadian refining group North Atlantic. The two companies have entered exclusive negotiations for North Atlantic to acquire an 82.89% controlling interest in Esso Société Anonyme Française SA and 100%  of ExxonMobil Chemical France. Filing of a tender offer is expected in the first quarter of 2026 for the deal which includes Exxon’s refinery at the Gravenchon site, the second largest refinery in France. The  transaction will be submitted to local trade unions in accordance with French law. In 2024, ExxonMobil sold its Fos-Sur-Mer refinery near Marseille, France, along with fuel terminals in Toulouse and Villette. The company also closed its cracker and downstream production  at Gravenchon in 2024. At the time, the company said the site had lost more than €500 million since 2018 and despite efforts to improve the site’s economics, it remained uncompetitive. According to the ICIS Supply & Demand Database ExxonMobil still has some small chemicals capacities at Gravenchon and nearby Port Gerome including propylene, polyalphaolefins and oligomers. Local trades union, CSEC, said in a press release that ExxonMobil would market chemicals and specialty products on behalf of the new owners. ExxonMobil did not reply to a request for confirmation of this. It also has large base oils capacities in France including 12,000 barrels/day at Port Jerome and 3,200 barrels/day at Gravenchon. In a statement released on 28 May, North Atlantic said it has the ambition to consolidate Gravenchon as a center of French energy and industry for decades and to grow North Atlantic into a transatlantic energy champion. Located on a 1,500-acre site in the Normandy region of France, the combined facility is one of the largest integrated chemical complexes in western Europe. The refinery includes two distillation trains, several conversion units and associated logistics facilities. The site has the capacity to process 230,000 barrels/day of crude oil and other feedstocks, according to North Atlantic. North Atlantic said it aims to develop Gravenchon into a green energy hub to accelerate the deployment of low-carbon fuels and renewable power. The company said it is committed to maintain employment and existing compensation and benefits. Ted Lomond, president and CEO of North Atlantic and president of North Atlantic France said: “This is a pivotal moment for North Atlantic as we enhance our transatlantic presence and commitment to energy security through innovative energy solutions aligned with global energy needs”. Ajay Parmar, ICIS director of energy and refining said: “My view is that Exxon is choosing to sell assets where profitability has been and likely will continue to be dented going forward. Refinery margins in Europe have returned back to around their pre-COVID levels this year, after a few years of bumper profits post-pandemic.” He added: “These refinery assets are less profitable and so the company is probably looking to divest for this reason. Exxon/Esso also sold off the Fos-Sur-Mer refinery last year – I think the strategy is to steadily exit these lower margin businesses.” Photo: Part of an oil refinery complex (Shutterstock) Focus article by Will Beacham

28-May-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. I could present a dozen charts such as the main one in today's post on polypropylene (PP) — for example on polyethylene (PE), ethylene, propylene and styrene—and the patterns would be similar though, of course, the numbers would differ. During the pandemic, while demand dipped in many places, China’s PP consumption rose—from 7% growth in 2019 to 9% in 2020, then stayed strong at 7% in 2021. The same trend played out across other chemicals and polymers. This was the “China in, China out” story: Rising imports of feedstocks to make finished goods that lockdown-affected, cash-rich Westerners were snapping up, backed by stimulus. Margins climbed—not just from demand, but also from refinery feedstock shortages as fuel demand dropped and refinery rates were cut. But 2022 marked a shift. As ICIS Data and Analytics illustrates, multiple headwinds kicked in: The Evergrande Turning Point, China's constantly deteriorating demographics, and a China petrochemicals self-sufficiency drive dating back to 2014. Focusing on China's PP self-sufficiency and exports: China's PP capacity as a percentage of domestic demand is expected to surge from 89% in 2014 to 134% by 2028. In 2020, China’s PP exports were around 500,000 tonnes. In 2023 they reached 1.3m tonnes and climbed to 2.4m tonnes in 2024. ICIS data suggests China’s exports in 2025 could reach 3.1m tonnes. On current trends, China’s exports to ASEAN could exceed 1 million tonnes to ASEAN in 2025 versus less than 900,000 tonnes in 2024. The trade war? Hard to say if it's moved the needle. These structural trends were in motion long before it began—and they’ll likely outlast it too. Sentiment swings (as seen since April’s “Liberation Day”) will keep influencing prices and buying patterns, but the fundamentals remain. The Chemicals Supercycle is over. What comes next? That’s the big question. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

26-May-2025

HOUSTON (ICIS)–Asia-US rates for shipping containers rose this week, leading ocean carriers to rush to ramp up capacity to handle an expected surge in bookings. Rates from online freight shipping marketplace and platform provider Freightos rose by 3% to both US coasts, while rates from supply chain advisors Drewry showed a 2% increase on rates from Shanghai to Los Angeles and a 4% rise in rates from Shanghai to New York, as shown in the following chart. Following the latest US-China trade developments, Drewry expects an increase in spot rates in the coming week as carriers are reorganizing their capacity to accommodate a higher volume of cargo bookings from China. Kyle Beaulieu senior director, head of ocean Americas at Flexport, said during a webinar this week that carriers who initiated blank sailings and discontinued services to the US are now resuming services. Beaulieu said there were 10 China-US services that were halted, and as of today, six are planning to resume from Week 22 to Week 24. Beaulieu said ports in the Pacific Northwest have been the biggest beneficiaries so far as that is the shortest route to the US. Alan Murphy, CEO, Sea-Intelligence, said carriers who were reducing transpacific capacity due to the decrease in bookings from China amid 145% tariffs are now working to ramp up capacity prior to the 14 August deadline. This means that typical peak season volumes now must be shipped no later than mid-July. Judah Levine, head of research at Freightos, said there is still confusion on whether July and August deadlines mean goods need to be loaded at origins by those dates – as was the case with the 9 April tariff deadline – or that goods must arrive in the US by then. “The latter would significantly shorten these lower-tariff windows,” Levine said. “Ocean shipments from Asia would have to move in the next week or two to arrive before 9 July.” Levine noted that carriers have separately come out with mid-month general rate increases (GRIs) from $1,000-3,000/FEU (40-foot equivalent unit) and have similar GRIs planned for 1 June and 15 June with aims to get rates up to $8,000/FEU. “If successful, rate levels would be about on par with the Asia – US West Coast 2024 high reached last July,” Levine said. “Daily transpacific rates as of Monday have already increased about $1,000/FEU to the East Coast and $400/FEU to the West Coast to about $4,400/FEU and $2,800/FEU, respectively.” Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES HOLD STEADY US liquid chemical tanker freight rates as assessed by ICIS held steady this week despite upward pressure for several trade lanes. There is upward pressure on rates along the US Gulf-Asia trade lane as charterers are seeking to send cargos to the region following the pause on tariffs. The announcement caused a significant uptick in spot activity. The increase in interest should be significant but almost certainly short lived as cargoes rush to arrive prior to the 90-day expiration date. Several parcels of monoethylene glycol (MEG) and methanol were seen quoted in the market. Similarly, rates from the USG to Rotterdam were steady this week, even as space among the regular carriers remains limited. Contract tonnage continues to prevail and given the limited available space; spot demand remains relatively good. Several larger sized cargos of styrene, methanol, MTBE and ethanol were seen in the market. Several outsiders have come on berth for both May and June, adding to the available tonnage for completion cargos. Easing demand for clean tankers has attracted those vessels to enter the chemical sector. For the USG to South America trade lane, rates remain steady with a few inquiries for methanol and ethanol widely viewed in the market. Overall, the market was relatively quiet with fewer contract of affreightment (COA) nominations, putting downward pressure on rates as more space has become available. On the bunker side, fuel prices have declined as well, on the back of lower energy prices, as a result week over week were softer. Additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

23-May-2025

SAO PAULO (ICIS)–Braskem’s stock rose sharply in Friday trading after reports citing unnamed sources said Brazilian entrepreneur Nelson Tanure would be seeking to acquire Novonor’s controlling stake at the petrochemicals major. At some point, Braskem’s share rose nearly 10% on Friday, taking the whole Ibovespa stock index in Sao Paulo higher. By afternoon trading, however, the stock had moderated the gain although it was still rising nearly 6%, compared with the previous close on 22 May. The offer was first reported by Brazilian daily O Globo, with financial daily Valor Economico and news agency Reuters subsequently also publishing reports confirming the bid, citing also unnamed sources. According to those sources, Tanure would be intending to indirectly assume control previously held by Novonor (called formerly Odebrecht) through one of his investment funds. The proposal includes maintaining Novonor in the shareholding structure with a minority stake of 3%-5%, signaling a gradual transition strategy. Novonor currently holds 50.1% of Braskem's voting shares, while Brazil’s state-owned energy major Petrobras controls 47%. However, the transaction depends on negotiations with Novonor’s creditor banks – Bradesco, Itaú, Banco do Brasil, Santander, and Brazil’s investment bank BNDES – which hold Braskem shares as collateral for debt estimated at Brazilian reais (R) 15 billion ($2.65 billion). These banks currently control 50.1% of Braskem's common shares, representing 38.3% of total capital. Any control change must also consider Petrobras' position as the second-largest shareholder with significant strategic influence. In a written response to ICIS, Braskem said it would not comment. Novonor and Petrobras had not responded to a request for comment at the time of writing. Braskem's financial metrics have been suffering for several quarter due to the global petrochemicals oversupply and low prices, which have hit hard some of the company's key products such polyethylene (PE), polypropylene (PP), or polyvinyl chloride (PVC). Earlier in May, however, it said it had swung to a net profit during Q1 2025, compared to a net loss in the same quarter a year earlier. Its sales and earnings, however, continued shrinking during Q1 in the year-on-year comparison. Braskem(in $ million) Q1 2025 Q1 2024 Change Q4 2024 Q1 2025 vs Q4 2024 Sales 3,331 3,618 -8% 3,285 1% Net profit/loss 113 -273 N/A -967 N/A Recurring EBITDA 224 230 -2% 102 121% WHO IS TANURE While it has been elusive for most media outlets to put a figure on Nelson Tanure’s fortune – even the well-known Forbes magazine has not put a figure on it and has not included him in its Rich List – the entrepreneur is considered one of Brazil’s richest men. His businesses span in a wide range of sectors such energy (mostly electric utilities), civil construction through its firm Gafisa; oil and gas through PetroRio and investments in the exploration of natural resources; telecommunications, with participations in operators Oi and TIM Brasil; and healthcare, with Alliance Health and diagnostic laboratories, among others. UNSUCCESSFUL DISPOSAL SO FARNovonor has attempted to sell its Braskem stake for years without conclusion. Previous interested parties included Abu Dhabi’s energy major Adnoc, Saudi Arabia’s SABIC – now part of oil major Aramco – and Brazilian conglomerate J&F, owned by the Batista brothers. J&F reportedly offered R10 billion for Novonor's stake, but neither this nor the other transactions materialized. Novonor suffers from high leverage since the 2010s, when the company was at the center of the large, Latin America-wide corruption scandal known as Lava Jato in the mid-2010s. The scandal also engulfed personalities from the first administration of the Workers Party (PT), the party of President Luiz Inacio Lula da Silva, now back in power again and at the time led by him and his successor Dilma Rousseff. ($1 = R5.67)

23-May-2025

UK energy price cap for July-September set at £1,720 for an average household This has risen £152 year on year, but is £129 lower than the Q2 cap Forward prices for Q4 ‘25 at premium to Q3 ‘25 anticipating higher winter demand By Anna Coulson and Ethan Tillcock LONDON (ICIS) –The UK energy price cap for July-September will be higher than the third quarter of 2024, energy regulator Ofgem said on 23 May, but will fall compared to the price cap in the second quarter of 2025. Ofgem stated that the recent fall in wholesale prices is the main driver of the overall price cap reduction, accounting for around 90% of the fall, with the remainder primarily due to changes to operating cost allowances suppliers can recover. If forward prices for delivery in the fourth quarter of 2025 remain at current levels, the wholesale component of the cap for the period October-December is expected to be higher than the third quarter. RISING PRICES ICIS assessed the British NBP gas Q3 ‘25 contract at an average of 94.400p/th from 18 February to 16 May, which was the period used by Ofgem to calculate wholesale energy costs for the upcoming cap. This is 35% higher than the Q3 ’24 contract average over equivalent dates in the previous year. Several factors are likely to have contributed to elevated wholesale gas prices. The end of Russian gas transit via Ukraine cut around 15.5bcm/year of remaining supply to Europe at the start of the 2025. European gas reserves finished the winter withdrawal season down significantly year on year, increasing forecast summer injection demand annually. This supported British hub prices as higher prices on the continent drive exports via the BBL and Interconnector pipelines. Investment funds amassed large net long positions in European gas futures amid speculation of a tight summer injection market. Hub prices declined towards the end of the period, trading lower on US tariffs driving global demand reduction forecasts, and the EU easing storage regulations, reducing expected summer injection demand. Gas is a key price driver for the UK power market due to its role in power generation, with power prices tracking the upward trend in NBP prices. ICIS assessed the UK power baseload Q3 ‘25 contract at an average £80.64/MWh between 18 February and 16 May, 25% higher than the Q3 ‘24 over equivalent dates. The Q3 ’25 UK power contract is at a premium to the European equivalents, indicating that the UK is likely to import power through the front quarter. Q4 CAP OUTLOOK On 22 May, ICIS assessed the NBP Q4 ‘25 contract at 94.525p/th, 7.950p/th above the Q3 ‘25 contract. On the same day, the UK power baseload Q4 ‘25 contract was £87.00/MWh, £6.85/MWh above the corresponding Q3 ’25 contract. European gas markets continue to exhibit sensitivity to multiple regulatory and geopolitical drivers. US tariffs are likely bearish for global demand due to stifling economic growth; however, de-escalation may continue in the coming months. Reduced gas storage targets at the EU level may push increased risk across the region from the injection season into Winter ’25 delivery. Entering the fourth quarter, cold weather and low wind generation present risks as this would increase heating and gas-for-power demand, with several periods of dunkelflaute in the previous winter causing demand surges. French nuclear availability is another key driver for UK power prices through the fourth quarter. ICIS assessed the UK power baseload Q4 ’25 contract at €102.41/MWh on 22 May, €25.61/MWh above the French contract, indicating that the UK is likely to import power from France. Data from EDF on 22 May shows that French nuclear availability is scheduled to average 57.1GW from 1 October to 31 December, 15.1GW above the 2020-24 average amid the recent commissioning of the 1.6GW Flamanville 3 plant. However, downward revisions in French nuclear availability through the fourth quarter of 2025 would be a bullish driver for French and UK power prices BACKGROUND Introduced in January 2019, the price cap sets the maximum price that energy suppliers can charge end-users for each unit of energy. .

23-May-2025

SAO PAULO (ICIS)–Brazil’s state-owned energy major Petrobras and chemicals producer Unigel have finally signed an agreement to end contractual disputes related to the two fertilizers plants in the country’s north which had been leased to Unigel. Late on 22 May, the companies said the two fertilizers plants in the states of Bahia and Sergipe (northeast) would thus return to Petrobras’ portfolio. The agreement must still be ratified by Brazil’s Arbitral Tribunal. “The agreement provides for the reinstatement of Petrobras' possession of the fertilizer plants (FAFENs) in Bahia and Sergipe, and the resumption of operations by Petrobras through a bidding process for the contracting of operation and maintenance services, in compliance with applicable governance practices and internal procedures,” said Petrobras. “Petrobras aims to resume activities in the fertilizer segment to create value through the production and commercialization of nitrogen-based products, while aligning with the oil and natural gas production chain and the energy transition.” Meanwhile, Unigel said the agreement represented the “definitive resolution of the contractual disputes” and litigation existing between the companies due to disagreements about the lease for the two plants. The deal represents the withdrawal of the company from the fertilizers sector altogether. The Camacari plant in Bahia state can produce 475,000 tonnes/year of ammonia and 475,000 tonnes/year of urea. The plant in Laranjeiras, Sergipe, can produce 650,000 tonnes/year of urea, 450,000 tonnes/year of ammonia and 320,000 tonnes/year of ammonium sulphate (AS). FAILED FERTILIZERS ADVENTURE The agreement puts an end to the 10-year lease for the plants signed by Unigel and Petrobras in 2019. While successful at first, as fertilizers prices shot up immediately after the first wave of the COVID-19 pandemic, prices started to fall in 2022 though while prices for natural gas rose sharply. In 2024, Unigel idled the two plants as high prices for gas and low selling prices made operations unprofitable, it said. Along the way, Petrobras accused Unigel of not fulfilling the terms and conditions of what they had agreed. Moreover, from 2022, woes at Unigel’s petrochemicals divisions – mostly producing styrenics – added to those in fertilizers. By the end of 2023, the company was forced to enter a debt restructuring process from which it only emerged in 2024. Earlier in May, Unigel presented its first comprehensive quarterly financial metrics since 2023, when it entered the restructuring process. Brazil’s financial regulations provide for such a provision for companies in financial distress. While it posted small earnings before interest, taxes, depreciation, and amortization (EBITDA), the producer continued haemorrhaging money in the first quarter, with sales falling year on year and posting a net loss of Brazilian reais (R) 209 million ($37 million). ($1 = R5.71)

23-May-2025

SINGAPORE (ICIS)– ChemOne Group is planning to incorporate bionaphtha as a feedstock for its upcoming $5.3 billion Pengerang Energy Complex (PEC) in Johor, Malaysia, a senior company executive said. The PEC is expected to process 150,000 barrels/day of condensate plus a side feed of naphtha, that will in turn produce 2.5 million tonnes/year of aromatics, 3.8 million tonnes/year of energy products output, and hydrogen output of 26,000 tonnes/year, according to Mobin Rahman, ChemOne Group’s Vice President for Technology. Construction of the PEC project is expected to start by mid-2025 after its operator secured an agreement for $3.5 billion of financing, with the start-up of the complex expected in Q4 2028. The hydrogen produced will be used to support the production of hydrogenated vegetable oil (HVO), which in turn can be processed into sustainable bionaphtha, according to Rahman. “The incorporation of bionaphtha as a feedstock in PEC will then advance ChemOne's work in creating a sustainable, circular petrochemical chain,” he said. Bionaphtha, a byproduct of HVO and sustainable aviation fuel (SAF) production, is increasingly used in Asia's petrochemical industry for sustainable plastics, packaging, and fuel blending. “The petrochemical industry globally is heavily reliant on fossil-based naphtha as a feedstock in steam crackers to produce olefins. Bionaphtha thus presents itself as a renewable alternative to fossil-based naphtha,” Rahman said. “This signals the potential for greater integration of bionaphtha into the petrochemical industry as its technology matures and supply increases,” Rahman noted. However, its relatively higher cost as compared to conventional fossil-based naphtha makes its adoption limited. Moreover, converting bionaphtha to paraxylene (PX) through catalytic reforming is challenging primarily due to the feedstock's composition and the inherent limitations of the process. Bionaphtha, derived from bio-crude oils, often contains a high proportion of normal paraffins and other non-aromatic components, which are difficult for catalytic reforming to convert into aromatics. BIONAPHTHA USE IN ASIA INCREASING   Major petrochemical companies in Asia are incorporating bionaphtha in their steam crackers as a drop-in feedstock in place of fossil-based naphtha, or in a mix with fossil-based material to produce partially renewable chemicals. “As a region that consumes the most plastics globally, the demand for plastics remains constantly high,” Rahman said. “When coupled with the increasing eco-conscious preferences among consumers, we see a resulting heightened demand for bioplastics. This has, as such, been a significant driver in the region's demand for bionaphtha as a feedstock for its production.” In line with the global green transition, multiple countries in Asia have also enacted fuel blending mandates. Singapore, for example, has set a 1% SAF blending mandate from 2026 onwards. Given the current mandate by countries to ensure that SAF is blended with jet fuel, the production of SAF, and consequently the use and production of bionaphtha, is set to rise, Rahman said. The International Air Transport Association (IATA) estimates that SAF could contribute to a 65% reduction in emissions, much needed by the aviation industry to achieve net zero emissions by 2050. Just like fossil-based naphtha, bionaphtha can also be used as a gasoline blending component – offering a more sustainable fuel blend to help countries and companies achieve their decarbonization goals, according to Rahman. While carbon capture & storage (CCS) and green hydrogen also offer valuable decarbonization strategies, bionaphtha provides a relatively easier and expected to be more readily available pathway. “Looking ahead, the global momentum towards sustainability will likely continue to see an increasing demand for bionaphtha in petrochemical production processes.” BIOPLASTICS USE GROWING One of the most promising downstream applications for bionaphtha lies in bioplastics, Rahman noted, including polyethylene furanoate (PEF), bio-polyethylene (bio-PE) and bio-propylene (bio-PP). PEF is a fully bio-based alternative to PET, while bio-PE and bio-PP are drop-in biopolymers with varying levels of bio-content, with bio-PP currently achieving up to 40% through the bio-mass balance process. In South Korea and Japan, leading beauty brands are already incorporating bio-naphtha into packaging and product development, setting a precedent for other industries to follow, Rahman noted. Companies like Japanese producer Nippon Shokubai and Indonesia’s Chandra Asri are exploring the use of bionaphtha in super absorbent polymer production (SAP), utilizing mass balance processes and independent certification bodies to ensure transparency and sustainability. South Korea’s LG Chem has also been manufacturing eco-friendly plastic products using bio-naphtha since 2020. LG Chem since 2021 has been shipping its bio-balanced SAP products – also certified with ISCC Plus – to overseas markets. ISCC PLUS is an international certification system that verifies the sustainability of bio-based and bio-circular raw materials throughout the supply chain. Separately, Mitsubishi Chemical has partnered with Japanese beverage company Suntory and apparel manufacturer Goldwin to use sustainable plastics for their end-products. The conglomerate also locked in partnerships with providers of the key bioplastics ingredient bionaphtha. It announced a strategic partnership with Finnish company Neste for the bioplastics supply chain. SUSTAINABILITY MANDATES TO PLAY KEY ROLE  Regulatory frameworks and sustainability mandates play a significant role in accelerating the adoption of bionaphtha, Rahman said. “Policies surrounding the reduction of plastic waste – like Japan's Plastic Resource Circulation Act for example – can incentivise manufacturers to adopt more sustainable production materials, while also encouraging retailers and consumers to opt for biobased plastics as an alternative to single-use plastics.” “In addition to that six other Asian governments – Philippines, China, South Korea, India, Bangladesh, and Malaysia – are regulating plastic waste, thereby building a potential market for biobased alternatives.” Other regulatory frameworks surrounding the general reduction of carbon emissions also help drive the adoption of bionaphtha in the petrochemical sector, as companies seek to harness potential financial incentives and avoid regulatory penalties, Rahman noted. “Take for example carbon taxes implemented in countries like Singapore, with carbon tax rates that will increase at least thrice within the decade to reach $80 per tonne of GHG [greenhouse gas] by 2030,” he noted. “Companies looking to comply with such regulatory requirements, or to be eligible for carbon credits and offsets, may turn towards bionaphtha to help reduce lifecycle greenhouse gas emissions along the supply chain.” South Korea's emission trading scheme also specifically rewards companies that integrate renewable feedstocks into their petrochemical production, providing a financial incentive for the adoption of bionaphtha in the industry, Rahman added. BIONAPHTHA MARKET SET FOR RAPID GROWTH  The market size for bionaphtha continues to expand at a compounded annual growth rate (CAGR) of 19% and is projected to reach more than 3 million tonnes by 2032, according to Rahman. The expansion is due to increased environmental awareness, policies that encourage the use of sustainable energy, and improvements in production technology, he said. “Currently, about 15% of sustainable aviation fuel (SAF) production results in bio-naphtha as a byproduct. If demand continues to rise, this ratio can be increased to 40%, but the industry must also grapple with the limited availability of bio-based raw materials such as waste cooking oil.” “To ensure long-term viability, diversification of feedstock sources and the development of alternative production methods are imperative.” COST COMPETITIVENESS REMAINS AN ISSUEThe key challenge for bionaphtha revolves around cost competitiveness, and this is especially pertinent for Asian petrochemical producers who operate on thinner margins compared to their Middle East and US counterparts who benefit from cheaper feedstocks, according to Rahman. “Investing in low-carbon technologies is difficult for Asian producers if it further erodes their profit margins,” he said. “Besides, in terms of feedstock, while bio-based alternatives such as bionaphtha are available, many petrochemical complexes still rely on fossil-based naphtha.” “This is due to the comparatively higher prices of its alternatives, limited supplies depending on international supply chains, as well as potentially incompatible infrastructure where retrofitting is too costly.” Steam cracking operates at temperatures above 800°C and consumes large amounts of energy. This is mostly powered by fossil fuels, as its alternative – the electrification of steam crackers, requires high-capacity renewable energy that is not cost-competitive in Asia at the moment. “Even if high-capacity renewable energy becomes more accessible, the electrification of steam crackers requires a complete redesign or a retrofit that would incur very high costs. As such, decarbonizing these steam crackers poses significant technical and economic hurdles for businesses,” Rahman said. TECHNOLOGY TO THE RESCUETechnological advancements – like the introduction of new hydrotreating catalysts, help to improve conversion efficiency and reduce coke formation, according to Rahman. Other innovations like mild hydrocracking configurations that allow for targeted production of bionaphtha fractions can also enhance the overall efficiency of bionaphtha production, he said. More importantly, however, advancements that allow for better hydrogen recovery are particularly crucial in enhancing both the scalability and efficiency of bionaphtha production. “Especially in complexes like ChemOne Group's PEC, where hydrogen is produced as a by-product and used in the downstream production of hydrogenated vegetable oils, embedding strong hydrogen recovery systems can help improve yield efficiency and reduce costs. This in turn better primes its production for scalability,” he said. “In addition, at ChemOne Group's Pengerang Energy Complex, engineering-driven improvements in its LD-PAREX technology have yielded an almost 10% increase in conversion percentage from its Condensate Feedstocks to its higher value aromatics products,” Rahman said. “This also enhances the efficiency of downstream SAF/bionaphtha production and thereby improves production economics, both of which enhance the supply and cost appeal to facilitate further scaling of bionaphtha production.” Interview article by Nurluqman Suratman

22-May-2025

Additional reporting by Andreas Schroeder, Eduardo Escajadillo and Ghassan Zumot CCS could prove a game-changer for Germany's long-term energy vision Easing of debt brake could stimulate demand in new sectors Debate around resurrecting Nord Stream may be unhelpful now LONDON (ICIS)–Germany’s long-term energy policies are likely to witness critical adjustments as the new government will be looking to strike a balance between climate action, security of supply and economic competitiveness. Speaking to ICIS, Timm Kehler, CEO of the German and Hydrogen Industry (formerly Zukunft Gas), Germany’s foremost gas advocacy group, said the new administration remains committed to the country’s 2045 climate neutrality target but the means to achieve the goals are likely to undergo a sea-change. The new government has already announced its decision to lift a long-standing opposition to nuclear production, which is set to ensure the technology is treated on a par with renewable energy in EU legislation. Another game-changer might be the approval of carbon capture storage which would allow Germany to carry out plans to import gas and build gas-fired power plants while being able to transport and export carbon dioxide. OPPORTUNITIES Kehler said there are discussions on lifting the current ban on CCS and aligning with the London Protocol, an international agreement regulating the export of waste including CO2, which will provide clear signals for Germany to use gas while remaining committed to climate targets. This would open the door to a variety of opportunities including securing natural gas supplies on a longer-term basis and continuing to burn the fuel in critical sectors if it is used as feedstock for clean blue hydrogen, with the resulting carbon dioxide stored in CCS. One area that will be under scrutiny will be the decarbonization of heating, the second largest gas consuming sector after industry, which burns around 254TWh (24billion cubic meters) annually. “The decarbonisation of the heating sector is an emotional and complicated issue,” Kehler said. “It was a major breaking point of the previous government and has created headaches in the business because it’s not clear how they would tackle issues. There is a campaign to get rid of gas-fired heating but it’s not clear what that means in practice.” STIMULATING DEMAND Kehler said the ability of the current government to ease the debt brake and pave the way for a multi-billion-euro stimulus for investments in infrastructure, including energy, would implicitly lift demand for natural gas and electricity. Several areas of growth could include the construction sector, where Germany has been falling significantly below targets to expand the housing stock. Another area would be defence. “We see a shift towards investments in defence which could have an impact on the German economy,” he said. “The Coalition Treaty [an agreement signed by Germany’s mainstream centre right and centre left parties CDU/CSU and SPD] focuses on lead markets where the state has influence and which could decarbonise quicker such as green steel and defence technology, which could be a driver for new economic activity,” he added. Kehler said some sectors such as the chemical industry which was severely hit by rising energy costs in the wake of Russia’s invasion of Ukraine have seen a modest comeback but added that a share of the production that closed down or relocated may be lost for now. IMPORTS Despite the economic difficulties faced by Germany following the energy crisis of 2022, he questioned the viability of a possible regulated industrial price for electricity or gas that would help consumers to reduce costs. He said a more efficient option would be to reduce taxes to a minimum level rather than subsidise grid transmission tariffs to keep costs low. The expected surge in gas production globally could bring additional benefits to industrial consumers and Kehler believes that closer relations with the US, as the world’s largest exporter of natural gas, could be beneficial both economically and politically. He said current discussions on the potential return of Russian gas supplies via the idled Nord Stream 1 or 2 corridors were not particularly helpful. “From the point of view of supply we have lots of idle routes through Ukraine or Yamal [via Belarus and Poland] and before we have a discussion on Nord Stream we should put the focus on those transport routes in case Russian gas comes online. “However, we don’t see that [the return of Russian gas] happening, in fact we see the EU discussion moving in opposite direction [towards banning Russian gas imports],” he added. Kehler admitted that natural gas was very much part of the geopolitical discussions between the US and Russia and related to the future of Ukraine in a post-war scenario. Note: This piece previously referred to The German and Hydrogen Industry as Kukunft Gas. Zukunft Gas was renamed The German and Hydrogen Industry in 2024 to reflect its greater emphasis on the transformation of the gas industry and on hydrogen.

21-May-2025

Hals Agro became the second company to inject biomethane into Ukraine’s gas grid Second plant in Kyiv to double capacity by end of 2025 amid planned first exports EU certification key to unlocking export potential LONDON (ICIS)– Ukrainian agribusiness “Hals Agro” plans to begin exporting biomethane to the EU and double its production output to 6mcm/year by the end of 2025. Speaking to ICIS Mariia Bielozerskykh, assistant to Hals Agro’s CEO Serhiy Kravchuk said that Ukraine’s gas transmission system served as a conduit for Russian gas flows to Europe, but “today that same infrastructure holds the potential to be repurposed for the delivery of domestically produced green gas to both Ukrainian and European markets.” BIOMETHANE PRODUCTION IN CHERNIHIV In December 2024, Hals Agro became the second Ukrainian company after Vitagro Group to inject biomethane of its own production to the Ukrainian gas transportation system and inject it into Ukrainian underground gas storage facilities. The company’s first plant in Chernihiv, launched in 2023, currently supplies around 3mcm of biomethane made from “manure, sugar beet pulp and corn silage” per year. A second plant, now under construction, in Kyiv, is projected to bring total output to 6mcm/year and “remains on schedule for commissioning by the end of this year, coinciding with our first exports of biomethane to the European Union,” the company confirmed to ICIS. Abundant feedstock supplies generated from cereal cultivation, sugar processing, dairy farming, and livestock allows Hals Agro to turn organic waste into renewable gas and digestate, which in turn returns to the soil as fertilizer. As such, biomethane presents the opportunity to “reduce dependence on imported fuels while fostering a truly circular economy.” SUPPLY SCALABILITY DEPENDS ON EU INTEGRATION Hals Agro’s planned production scale-up coincides with the initial wave of Ukrainian biomethane exports to the EU, as demand for renewable gases rises under the REPowerEU strategy. The company aims to begin exports to the EU by the end of 2025 but as Georgii Geletukha, head of the Bioenergy Association of Ukraine (UABIO) warned last week, further exports hinge on regulatory alignment and export certification. Namely integration into the EU’s Union Database (UDB) for renewable gases. “Certification through the Union Database will enable us to demonstrate the quality and sustainability of our product,” said Bielozerskykh, adding that a “robust and predictable market” must be developed to support Ukraine’s biomethane sector. To that end, “firm, long-term commitments from the EU concerning biomethane imports – together with streamlined certification procedures, cross-border trade mechanisms and reliable guarantees of origin,” are needed to “send a clear market signal and encourage investment,” according to Bielozerskykh. POST-WAR RECONSTRUCTION Ukraine faces a record 4–6bcm gas import need this year due to production losses and low reserves. With forward contracts showing no summer softening, domestic biomethane could emerge as a valuable, sustainable alternative over dependence on fossil fuel imports, especially if producers such as Hals Agro can scale up. Looking ahead to Ukrainian reconstruction, Bielozerskykh stressed that “decentralized energy solutions will be essential for rebuilding rural communities and ensuring a reliable energy supply in areas where centralized infrastructure has been damaged or destroyed” by Russian missile attacks. At the Danish-Ukrainian agro-technological business conference in April, Oleh Ryabov, head of renewable energy at Hals Agro, emphasized that expanding biomethane production could shift the focus in Ukraine away from grain exports to food and feed production, turning “traditional agrarian regions [into] energy-profitable centers of a modern energy and agro-industry.” ICIS has expanded its coverage of the emerging biomethane market via the development of the topic page “European biomethane: data, news and analysis”. Click here to access

21-May-2025

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the fortnight ended on 16 May. NEWS Brazil’s Braskem swings to profit in Q1 but global petchems issues remainBraskem swung to a net profit in the first quarter, year on year, but sales and earnings fell slightly as the global petrochemicals downturn continues, management at the Brazilian polymers major said on Monday. Braskem-Idesa launches its ethane import terminal in MexicoBraskem-Idesa (BI) officially launched the Terminal Quimica Puerto Mexico (TQPM) on Wednesday, according to a notice from the company. Brazil's Unipar Q1 metrics show start of recovery, but further protectionism needed – execsUnipar’s Q1 sales and earnings rose strongly, year on year, despite the prolonged global petrochemicals downturn, weather-related disruptions at its Argentine operations, and lower self-generated energy availability in Brazil due to grid operator restrictions, executives the Brazilian chemicals producer said on Friday. Brazil’s Unigel small earnings save day in Q1; deal with Petrobras imminent ‘at no cost’ Unigel’s Q1 low earnings at Brazilian reais (R) 23 million ($4.0 million) represented, however, a recovery from negative earnings of R29 million in the same quarter of 2024, the Brazilian styrenics and acrylics producer said on Friday. Brazil’s Unigel still planning exit from fertilizers but may mull Petrobras plans for northern facilitiesUnigel could evaluate plans set out by Petrobras for the fertilizers plants in the northern states of Bahia and Sergipe which were leased to the Brazilian chemicals producer until this month, a spokesperson for Unigel said to ICIS. INSIGHT: Mexico’s automotive tariffs raise specter of recession, rest of LatAm more resilientMexico remains the potential largest victim of the change in US trade policy, but practically no country in the world would be spared from an impact, analysts said this week. INSIGHT: Brazil’s Lula visit to China bears fruit with multi-billion dealsBrazilian President Luiz Inacio Lula da Silva had already got several investment deals in the bag midway through his five-day state visit to China – among others, Envision Group has committed $1.0 billion in Latin America’s largest economy to produce sugarcane-based sustainable aviation fuel (SAF). MOVES: Mexico’s trade group ANIQ appoints Jose Carlos Pons as presidentMexico's chemicals trade group ANIQ has appointed Jose Carlos Pons as president for the 2025-2027 term amid intensifying pressures from trade disputes with the US and broader regional challenges. Mexico’s chemicals Q1 output down 1.4% amid wider industrial fallsMexico’s chemicals output fell by 1.4% in the first quarter (Q1), year on year, but production of plastics and rubbers rose healthily, the country’s statistical office Inegi said. Argentina’s fall in inflation further boosts Milei’s cause, but sustained success harder to come byArgentina’s annual rate of inflation fell further in April to 47.3%, down from 56% in March, according to the country’s statistical office Indec, in another boost to President Javier Milei drastic economic measures. IFA '25: Brazil Potash pushes to 'lock-in funding this year'Muriate of potash (MOP) mine developer Brazil Potash continues its pursuit of investors at the International Fertilizer Association (IFA) annual conference in Monte Carlo. Colombia’s fiscal woes to grow on lower crude prices, hit Petro’s pre-election spending plansPotentially lower crude oil prices in coming months will dent Colombia’s Treasury ability to collect proceeds from the key income-generator sector, which is dominated by state-owned Ecopetrol.  PRICINGLatAm PP domestic, international prices unchanged on sufficient supply, stable to soft demandDomestic and international polypropylene (PP) prices were unchanged this week across Latin American countries. LatAm PE domestic, international prices steady on stable demand, ample supplyDomestic and international polyethylene (PE) prices were assessed as steady this week across the region. LatAm PE domestic prices fall on the back of competitive imports from the USDomestic polyethylene (PE) prices fell across Latin American countries on the back of competitive offers from the US. LatAm PP domestic prices steady to lower on cheaper imports and feedstocksDomestic polypropylene (PP) prices were assessed as steady to lower across Latin American countries on the back of lower feedstock costs and competitive offers from abroad.

19-May-2025