Integrating Sustainable Processes Into the Petrochemical Sector

Cooke notes in an article for Oil Review Middle East that environmental sustainability is a major obstacle for petrochemicals and chemicals firms in the region.

Producers are being analysed for their environmental impacts, including the amount of water used in production, the types of trash they generate, and the global warming potential of their finished goods. Single-use plastics are only one example of a product made from petrochemicals and chemicals for which consumers and investors are becoming increasingly aware of the environmental toll they exact.

As a result of this "global sustainability movement," producers in the GCC region are "increasingly embracing circular economy principles to better their performance in this area," as stated by Cooke. Use of recycled plastics as feedstock, monomers, and polymers is only one example of how closed loop value chains for plastics can keep scrap from entering landfills.

There has been a regional uptick in the adoption of circular economy policies and tactics by the region's policymakers. For instance, by 2035, Saudi Arabia hopes to have achieved a nationwide zero-waste circular economy. To put this theory into effect, SABIC has partnered with the Saudi Investment Recycling Company (SIRC) to build a chemical recycling plant in the kingdom that will process mixed plastic trash into feedstock for pyrolysis oil, a synthetic fuel that might be used as a substitute for petroleum. By 2025, BASF, a plastics firm in neighbouring Bahrain, hopes to have processed 250,000 metric tonnes (MT) of recycled and waste-based raw materials annually through its Circular Economy Programme and to have doubled the €17 billion in revenues generated from circular economy innovations. Circular feedstocks, novel material cycles, and alternative business models are at the heart of its strategy.

Long-term value development in the critical petrochemicals and chemicals industry cannot be realised without innovation-led sustainable goods and practises, and this realisation is spreading throughout the region's government and business stakeholders.

Cooke continues by elaborating on the ways in which Gulf producers can lessen their supply chains' negative effects on the environment and the ways in which they are turning to big data solutions to anticipate shifts in the market; such solutions not only help to shorten the time and resources required to bring a new product to market, but also encourage creative approaches to business model development and boost competitiveness.

To assist regional manufacturers compete on a global scale, Cooke adds, "more investment in research and innovation will be critical to promote product differentiation, raise process efficiencies, secure cost advantages, and enhance sustainability."

Rebounding demand and healthy profits

After the initial shock of COVID-19 in 2020, the industrial sector slowly recovered, and markets reopened, fueling a rise in demand for petrochemicals. Polyethylene (PE) and polypropylene (PP) showed resilience in the face of high demand from the packaging industry, increasing by 5 to 6 percent from 2020 to 2021. Despite taking a hit in 2020 with flat or negative growth, other plastics like polyethylene terephthalate (PET), polystyrene (PS), and polyvinyl chloride (PVC) have rebounded at a rate higher than pre-COVID-19 levels. The resumption of activity in consumer markets has been a major factor in this improvement. As an illustration, more people were able and willing to travel as immunisation rates rose. Businesses and stores in the textile, construction, and transportation sectors can now return to normal operations.

Most petrochemical companies have seen their margins increase thanks to the resurgence of demand. The petrochemicals business has been on a steady upward growth trend since early 2020, when it experienced a decline in EBITDA. In 2021, the top 100 petrochemical companies' EBITDA by market cap increased by 50 to 100 percent from their pre-COVID-19 levels. The average EBITDA margin also increased to approximately 20 percent, compared with about 14 percent in 2019. Increased demand was a contributor to margin expansion, although price spikes caused by supply disruptions and market scarcity were also important.

Toxic, but necessary

In many ways, the chemical and petrochemical industry presents two sides. On the one hand, this industry accounts for 7% of GDP and provides employment for 15 million people while also producing innumerable essentials like plastics, adhesives, and paints. Nonetheless, it's responsible for 10% of world energy consumption and 7% of industrial greenhouse gas emissions (mostly CO2) . The World Business Council for Sustainable Development established 17 Sustainable Development Goals to cut down on pollution and boost productivity in response to rising environmental consciousness.

Khaled Ali Al-Ghanim, Vice Chairman, Boubyan Petrochemical stated, “A widespread issue is the incorporation of streams and their energy content. Energy management and control is one approach that could be used to address this. Incorporating good energy monitoring and process control systems reduces energy usage and costs inside the organisation by approximately 5%. This is on top of the fact that the personnel within the firm should be aware of the energy targets, which reduces the energy consumption in daily activities. Because of this, we need to implement monitoring and sub-metering systems.”

While most refineries have made significant investments in cutting-edge process control systems, there is room for improvement in the entire energy management infrastructure. Only a subset of streams within a single process unit are tracked by the tools currently available for energy management. They are also limited in their ability to capture the entire process chain, as they are only useful in simple, static contexts. Incorporating a cutting-edge energy management technology throughout the entire refinery, mapping energy sources including steam, hydrogen, electricity, and fuel, has been found to reduce annual energy use by 8%. As a result, $2.2 million in savings was realised annually.

Innovating a New Strategy

Condugo, a company that  provides energy management services for industrial companies, has developed a new method they term "Energy Hub" to implement these findings. The hub's unique metamodel approach with graph-based models, as seen in the following graphic, allows it to avoid all of the aforementioned drawbacks. As a result, a metering point can be integrated into a network of nodes to record the complete efficiency of all conversion processes occurring locally. Additionally, energy consumption and energy losses for a particular batch can be assigned and traced back.

Habes Yaseen Al-Shammari, CEO, Methanol Chemicals Company commented, “When you implement the Energy Hub, you'll have unprecedented visibility into usage, efficiency, and outliers in real time. The findings of the industrial validation showed an improvement of up to 15% in energy efficiency and a 30% reduction in CO2 emissions. In order to stay ahead of the curve during the impending energy transition, this cutting-edge programme will prove to be an invaluable asset in your pursuit of a sustainable, decarbonized industry.”