Two financial quarters have passed since Tecnon OrbiChem business manager Jennifer Hawkins shared her insight from the European Petrochemical Association's (EPCA) 56th Annual Meeting in Berlin.
But from a panel event held as part of a gathering of 2000-plus delegates at the American Fuel and Petrochemicals’ (AFPM) International Petrochemical Conference in San Antonio, Texas last week, a markedly different outlook emerged.
Gone was the pervasive despondency of October 2022... In fact, as a cohort of industry leaders joined the panel discussion Reflections from the C Suite, optimistic words like ‘bullish’ and ‘recovery’ echoed from the event's Grand Hyatt Hotel hub.
Things look sweet from the c suite
Chairman, ceo and president of materials company Celanese Lori Ryerkerk spoke of 'an economic uptick' in both Europe and China over recent months.
‘There has actually been some good recovery in Europe in the last couple of months, as well as a bit of pick up in China,' she said.
Reiterating Ryerkerk ‘s optimism, the co-ceo of Houston, Texas-based natural gas and crude oil pipeline company Enterprise Products Jim Teague noted China’s improved outlook. ‘The country’s domestic flights returned to pre-pandemic levels this year,’ he said, adding that while the country is a rival in markets globally, it is also a much-needed international player.
'...There are three years of pent-up demand in the automotive sector. It is a sector in which the chemicals industry will begin to see some recovery...'
Celanese chairman, ceo & president Lori Ryerkerk
For the short-term, and in quarter two in particular, Ryerkerk predicts recovery – in the automobile sector specifically she said.
‘There's three years of pent-up demand’ out there according to Ryerkerk. And in terms of decarbonising the automotive industry, Ryerkerk sees great opportunity for engineered plastics in the EV supply chain. The Celanese portfolio for automotive solutions is a broad one, including almost 3000 products supplied from 38 manufacturing locations globally. According to our business intelligence platform OrbiChem360, the company's current polyamide 66 capacity alone is 214 ktpa – nearly a quarter of the US's total 2023 capacity.
Environmental, Social & Governance
Chevron Phillips Chemical president and ceo Bruce Chinn asked 'How do you balance [Environmental, Social & Governance] (ESG) with the desire to make and sell products?
'It has become clear to us that ESG will become part of our business. That means not only addressing the climate aspect but we must be honest with ourselves. We are looking for a 50% carbon reduction target by 2030. We will spend time with customers, make investments in advanced recycling from a technical standpoint,' Chinn added.
Addressing Environmental, Social & Governance issues and climate change is a team sport
Chevron Phillips Chemical president & ceo Bruce Chinn
Ryerkerk said her company looks at the issue in three ways. For her own company she said, ‘First, the goal is for a 30% GHG reduction by 2030.
‘What we do is make products that have a big part to play in helping others meet their ESG targets. We are making changes by being customer-led. And we need everybody to be part of this going forward,’ she added.
‘It’s a team sport,’ Chinn agreed.
Geopolitical tensions & trends of promise
Creating 'a world without petrochemicals amounted to a misguided effort in terms of the big picture,’ warned Chinn. Petrochemical products ‘keep food safe, they contribute to lighter weight vehicles’. These are some of the arguments that as an industry we need to be more vocal about in that space. He urged industry participants ask those advocating for a world without petrochemicals to imagine a world without plastic. Fully in agreement, Ryerkerk added 'the world cannot meet its net zero goals without petrochemicals, specifically plastics.’
'Cement, steel, ammonia and plastics are vital to civilisation,' according to Teague – ‘you cannot do away with any of those’ he added.
As Putin continues too play roulette with global peace and stability, the wider world must establish its new normal. In terms of the Russia/Ukraine conflict, Chinn believes that 'the longer the conflict drags on, we will find normalisation'. Russia, he said, 'has found a way to move oil and continue to trade despite the sanctions'.
'...When it comes to India and products like mobile phones, consumers want these products cheap and fast...'
Enterprise Products co-ceo Jim Teague
Teague meanwhile sees eastern promise burgeoning in our changing world. He raised the prospect of India leveraging the convenience of fossil-based feedstocks as a developing nation. With reference to the growing interest in the technological advances of western nations – such as mobile phones – Teague said Indian consumers want these products ‘cheap and fast’. When it comes to those developing nations, said Chinn, ‘speed and simplicity is what they are looking for.’
Transatlantic sustainability approaches
The chairman and ceo of BASF North America Michael Heinz told delegates that – when it came to promoting BASF to tomorrow's workforce – he relies on its USP that ‘with our customers, we are going to create not chemicals, but chemistry to improve the world.’
Heinz pointed to the different ways in which the US and the European legislature to bring about change in the industry - including the move from grey to green energy, and natural gas. ‘It requires new innovations. Are electric crackers even possible, he asks? So far chemical recycling is not really accepted. But making the changes that are needed will require a framework. The approach in Europe is totally different to the US.
'...In Europe, legislature regulates for you while the US uses the carrot-stick approach...'
BASF North America chairman & ceo Michael Heinz
‘In Europe,’ Heinz said, ‘the legislature says ‘we will regulate it for you, and that will change industry’.
In the US, he added, the approach is more carrot and stick-like. The Inflation Reduction Act (IRA) is a key factor. The act includes tax credits, incentives and other provisions that help companies tackle climate change, increase investments in renewable energy and enhance energy efficiency.
Ryerkerk told delegates she believed the IRA would promote growth in the EV sector. On the other hand, Ryerkerk sees the US Securities and Exchange Commission's emissions regulation disclosure regulation as 'so much work for no gain.'
Back to Blog
