Olin declares Freeport chlor-alkali FM from hurricane

Spanish Market: Chemicals, Petrochemicals
10/07/24

US-based chlor-alkali producer Olin declared a force majeure (FM) on 10 July for its Freeport, Texas, plant after Hurricane Beryl caused significant damage.

The company said the force majeure was for all its chlor-alkali and derivative vinyl products produced at the site. Olin said it was having difficulty accessing power, raw materials, feedstocks, and other crucial services which made managing logistics and production challenging. The company was conducting a comprehensive inspection and assessment of its facility, but there was no timeline for an end to the outage.

In addition to caustic soda and chlorine, the site produces several other derivative products. The company sells spot ethylene dichloride (EDC) from Freeport to overseas vinyl producers, epoxy resin, and vinyl chloride monomer (VCM) that it supplies to Shintech by direct pipeline.

Shintech buys VCM from Olin under contract to support its own polyvinyl chloride (PVC) plant in Freeport, which produces roughly 1.45mn tons of PVC per year. Shintech indicated earlier in the week it did not see any significant damage to its facility after the storm and was intending to restart its operations in short order.

The Olin force majeure could hinder Shintech's Freeport operations, but Shintech has not provided a timeline for its own restart and did not respond to a request for comment.

Olin also supplies Dow Chemical with chlorine by direct pipeline to run Dow's isocyanate plant in Freeport.

By Aaron May

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13/06/25

EPA proposes record US biofuel mandates: Update

Updates with new pricing, reactions throughout. New York, 13 June (Argus) — President Donald Trump's administration today proposed requiring record biofuel blending into the US fuel supply over the next two years, including unexpectedly strong quotas for biomass-based diesel. The US Environmental Protection Agency (EPA) proposal, which still must be finalized, projects oil refiners will need to blend 5.61bn USG of biomass-based diesel to comply with requirements in 2026 and 5.86bn USG in 2027. Those estimates — while uncertain — would be a 67pc increase in 2026 and a 75pc increase in 2027 from this year's 3.35bn USG requirement, above what most industry groups had sought. The proposal alone is likely to boost biofuel production, which has been down to start the year as biorefineries have struggled to grapple with uncertainty about future blend mandates, the halting rollout of a new clean fuel tax credit, and higher import tariffs. The National Oilseed Processors Association said hiking the biomass-based diesel mandate to the proposed levels would bring "idled capacity back online" and spur "additional investments" in the biofuel supply chain. The EPA proposal also would halve Renewable Identification Number (RIN) credits generated from foreign biofuels and biofuels produced from foreign feedstocks, a major change that could increase US crop demand and hurt renewable diesel plants that source many of their inputs from abroad. US farm groups have lamented refiners' rising use of Chinese used cooking oil and Brazilian tallow to make renewable diesel, and EPA's proposal if finalized would sharply reduce the incentive to do so. Biofuel imports from producers with major refineries abroad, notably including Neste, would also be far less attractive. The proposal asks for comment, however, on a less restrictive policy that would only treat fuels and feedstocks from "a subset of countries" differently. And EPA still expects a substantial role for imported product regardless, estimating in a regulatory impact analysis that domestic fuels from domestic feedstocks will make up about 62pc of biomass-based diesel supply next year. The Renewable Fuel Standard program requires US oil refiners and importers to blend biofuels into the conventional fuel supply or buy credits from those who do. One USG of corn ethanol generates one RIN, but more energy-dense fuels like renewable diesel can earn more. In total, the rule would require 24.02bn RINs to be retired next year and 24.46bn RINs in 2027. That includes a specific 7.12bn RIN mandate for biomass-based diesel in 2026 and 7.5bn in 2027, and an implied mandate for corn ethanol flat from prior years at 15bn RINs. EPA currently sets biomass-based diesel mandates in physical gallons but is proposing a change to align with how targets for other program categories work. US soybean oil futures surged following the release of the EPA proposal, closing at their highest price in more than four weeks, and RIN credits rallied similarly on bullish expectations for higher biofuel demand and domestic feedstock prices. D4 biomass-diesel credits traded as high as 117.75¢/RIN, up from a 102.5¢/RIN settle on Thursday, while D6 conventional credits traded as high as 110¢/RIN. Bids for both retreated later in the session while prices still closed the day higher. Proposed targets are less aspirational for the cellulosic biofuel category, where biogas generates most credits. EPA proposes lowering the 2025 mandate to 1.19bn RINs, down from from 1.38bn RINs previously required, with 2026 and 2027 targets proposed at 1.30bn RINs and 1.36bn RINs, respectively. In a separate final rule today, EPA cut the 2024 cellulosic mandate to 1.01bn RINs from 1.09bn previously required, a smaller cut than initially proposed, and made available special "waiver" credits refiners can purchase at a fixed price to comply. Small refinery exemptions The proposal includes little clarity on EPA's future policy around program exemptions, which small refiners can request if they claim blend mandates will cause them disproportionate economic hardship. EPA predicted Friday that exemptions for the 2026 and 2027 compliance years could total anywhere from zero to 18bn USG of gasoline and diesel and provided no clues as to how it will weigh whether individual refiners, if any, deserve program waivers. The rule does suggest EPA plans to continue a policy from past administrations of estimating future exempted volumes when calculating the percentage of biofuels individual refiners must blend in the future, which would effectively require those with obligations to shoulder more of the burden to meet high-level 2026 and 2027 targets. Notably though, the proposal says little about how EPA is weighing a backlog of more than a hundred requests for exemptions stretching from 2016 to 2025. An industry official briefed on Friday ahead of the rule's release said Trump administration officials were "coy" about their plans for the backlog. Many of these refiners had already submitted RINs to comply with old mandates and could push for some type of compensation if granted retroactive waivers, making this part of the program especially hard to implement. And EPA would invite even more legal scrutiny if it agreed to biofuel groups' lobbying to "reallocate" newly exempted volumes from many years prior into future standards. EPA said it plans to "communicate our policy regarding [exemption] petitions going forward before finalization of this rule". Industry groups expect the agency will try to conclude the rule-making before November. The proposed mandates for 2026-2027 will have to go through the typical public comment process and could be changed as regulators weigh new data on biofuel production and food and fuel prices. Once the program updates are finalized, lawsuits are inevitable. A federal court is still weighing the legality of past mandates, and the Supreme Court is set to rule this month on the proper court venue for litigating small refinery exemption disputes. Environmentalists are likely to probe the agency's ultimate assessment of costs and benefits, including the climate costs of encouraging crop-based fuels. Oil companies could also have a range of complaints, from the record-high mandates to the creative limits on foreign feedstocks. American Fuel and Petrochemical Manufacturers senior vice president Geoff Moody noted that EPA was months behind a statutory deadline for setting 2026 mandates and said it would "strongly oppose any reallocation of small refinery exemptions" if finalized. By Cole Martin and Matthew Cope Proposed 2026-2027 renewable volume obligations bn RINs Fuel type 2026 2027 Cellulosic biofuel 1.30 1.36 Biomass-based diesel 7.12 7.50 Advanced biofuel 9.02 9.46 Total renewable fuel 24.02 24.46 Implied ethanol mandate 15 15 — EPA Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Borealis not reviewing assets in Europe: CEO

12/06/25

Borealis not reviewing assets in Europe: CEO

London, 12 June (Argus) — Austria-based petrochemicals producer Borealis is not conducting any asset reviews in Europe despite prolonged weakness in the region's polyethylene (PE) and polypropylene (PP) markets, chief executive Stefan Doboczky told Argus . "It's not that we would never look into something," Doboczky said. But "none of our major installations [in Europe] I would say are being a real problem, they are all contributing [to profitability]." Doboczky acknowledged that "Europe will never be the cost leader". But "there are strong differences between the economics of crackers and the polyolefin systems", he said. "If you look at our more coastal setups, we are much more flexible than certain steam crackers would be inland." Borealis' coastal steam crackers in Porvoo, Finland, and in Stenungsund, Sweden, have greater flexibility to run lighter feedstocks and optimise product yields. Their location also allows for easier feedstock procurement via vessel, Doboczky said. Borealis will continue to bring polyolefins into Europe from its sister plants in the Middle East and North America, which have advantageous positions on feedstock and production costs. Doboczky's comments follow Netherlands-based LyondellBasell's announcement last week that it plans to divest four European olefins and polyolefins plants to focus on "economically sustainable sites". The European petrochemicals sector has faced mounting pressure from weak demand and high costs, prompting several producers to review or close assets. Saudi Arabia's Sabic is also understood to be assessing its European footprint, although details remain limited. Borealis, by contrast, is pursuing a differentiation strategy focused on downstream expansion. Last week, it announced a €100mn ($114mn) investment to triple PP foam production capacity at its Burghausen site in Germany. The firm has 650,000 t/yr of PP production capacity at that site. "We are very much focused on investing in smaller units, in the €50mn-100mn space to gain a strong share in a particular niche," Doboczky said. This is in addition to around €2bn of overall capital expenditure already committed in Europe for new projects. "Borealis has no alternative to this [polyolefins] business," Doboczky said, adding that the company will continue to focus on specialty, high-end applications rather than volume-driven segments. It also has a notable presence in the downstream compounding sector, which uses part of its PE and PP resin output. Demand outlook Borealis expects 2025 demand to be broadly in line with 2023-24 levels, although it could vary by grade and segment. "We see too much volatility at the moment and I think we need to see how the world looks like after 9 July," Doboczky said, referring to the 90-day tariff pause on US imports. "The general sentiment that PP is even more difficult, I would subscribe to that." PP demand has been hit harder than PE, given its exposure to big-ticket consumer goods and the automotive segment, both of which have been affected by cost-of-living pressures. Construction demand is also under pressure due to economic headwinds and high financing costs. For the time being, Borealis continues to see offtake from the automotive segment within its expected range, owing to a larger share of electric vehicle production, which uses a higher proportion of PP to offset battery weight. The company is also targeting growth in rigid and flexible packaging through increased innovation. Project updates Earlier this year, OMV and Adnoc agreed to merge Borealis and Borouge into a new entity, Borouge Group International, which will be headquartered in Vienna and listed on the Abu Dhabi Securities Exchange. The move coincided with the acquisition of Canada-based Nova Chemicals by the new entity. Borealis is constructing a 750,000 t/yr propane dehydrogenation (PDH) plant in Kallo, Belgium, which is scheduled to come online in the second quarter of 2026. The Borouge 4 project in Abu Dhabi is on track to start up ethylene and PE production in late 2025 or early 2026, Doboczky said. By Sam Hashmi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK ETS emissions fell by 11pc on the year in 2024

12/06/25

UK ETS emissions fell by 11pc on the year in 2024

Seville, 12 June (Argus) — Emissions in sectors covered by the UK emissions trading scheme (ETS) declined by 11.5pc year on year in 2024, data published by the UK ETS authority show, slowing their decline slightly from the previous year. Stationary installations covered by the UK ETS emitted 76.7mn t of CO2 equivalent (CO2e), down by 12.9pc from 2023, the data show. But this was offset somewhat by a 2pc increase in aviation emissions to 8.99mn t CO2e. Overall UK ETS emissions now have declined for two consecutive years, having fallen by 12.5pc in 2023. Emissions under the scheme rose by 2.5pc in 2022, as a strong rebound in aviation activity following earlier Covid-19 restrictions outweighed declining stationary emissions. Stationary emissions have decreased in every year since the scheme launched in 2021. The majority of the decline in stationary emissions under the UK ETS last year took place in the power sector, where emissions dropped by 18.2pc to 30.6mn t CO2e. The country's last coal-fired plant, Ratcliffe-on-Soar, closed in September last year. And the share of gas-fired output in the generation mix dipped as wind, solar and biomass production and electricity imports edged higher. Industrial emissions also declined, by 8.9pc to 46.1mn t CO2e. The iron and steel sector posted the largest relative drop of 30pc to 6.54mn t CO2e. Emissions from crude extraction fell by 6.4pc to 6.0mn t CO2e, while emissions from gas extraction, manufacture and distribution activities decreased by 8.9pc to 5.3mn t CO2e. The chemicals sector emitted 2.28mn t CO2e, down by 5.2pc on the year. A total of 43 installations were marked as having surrendered fewer carbon allowances than their cumulative emissions since the launch of the UK ETS, as of 1 May. A further two installations failed to report their emissions by the deadline. "Appropriate enforcement action" will be taken against operators that fail to surrender the required allowances, the UK ETS authority said. Overall greenhouse gas emissions across the UK economy dropped by a smaller 4pc last year, data published by the government in March show. This decline also was driven principally by lower gas and coal use in the power and industry sectors, with smaller declines in transport and agriculture, not covered by the UK ETS, and an increase in buildings emissions, also out of the scheme's scope. Emissions under the EU ETS in 2024 dipped by a projected 4.5pc from a year earlier, based on preliminary data published by the European Commission in April. The UK and EU last month announced that they will "work towards" linking the two systems together. By Victoria Hatherick UK ETS emissions mn t CO2e Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ethane rejection concerns heighten on export block

06/06/25

Ethane rejection concerns heighten on export block

Houston, 6 June (Argus) — US traders and gas producers are mulling over the implications of higher rates of US ethane rejection as the indefinite curtailment of US ethane cargoes to China spurs fears of a supply glut of the feedstock. Exporters Enterprise Products and Energy Transfer , the only waterborne exporters of US ethane, announced on 29 May and 4 June, respectively, that the US Commerce Department's Bureau of Industry and Security (BIS) had ordered them to apply for licenses to export ethane to China. On 4 June, Enterprise reported that emergency license applications for three of its cargoes, totaling 2.2mn bl, had been denied . "News that the [BIS] doesn't intend to issue ethane export permits suggests an increasingly dire situation," said one market participant. US ethane inventories stood at 63.9mn bl in March, the latest data available from the US Energy Information Administration (EIA), up 9.8pc versus last year, when supplies totaled 58.2mn bl. The US produced 2.83mn b/d of ethane from natural gas processing in 2024, according to annual data from the EIA, resulting in a surplus of 500,000 b/d over its domestic petrochemical consumption. Nearly all of this excess is exported, and about 46pc of shipments last year, or 227,000 b/d, went to China. Large-scale exports of the feedstock, which is used in ethylene production at steam crackers, are relatively new. Waterborne exports of ethane began in 2016, and until that time, excess supply that wasn't profitable to fractionate and pipe to storage caverns at Mont Belvieu, Texas, were rejected upstream at processing plants into the natural gas stream. Midstream operators estimated that US ethane rejection clocked in around 500,000 b/d in 2015, when the US produced a little more than a third of the ethane it does today at 1.13mn b/d and consumed only 1.07mn b/d domestically. Some analysts fear higher rates of US ethane rejection going forward could depress natural gas prices. "The recently announced ethane export restrictions to China have raised some concerns over a potential oversupplied domestic market, which could lead to more ethane rejection and create near-term price pressures," on natural gas, RBC Capital Markets analyst Scott Hanold said in a note to investors. An uptick in ethane left in the gas stream also pushes gas operators to potentially contend with a higher calorific content. Natural gas producers have been investing in additional pipeline capacity to accommodate growing demand for LNG exports, however, and the infrastructure is more flexible now than it was back in 2016. "The US exports approximately 250,000 b/d of ethane to China, and that's about 0.4bn cf/d of ethane that would need to be rejected into the US natural gas system," according to Craig Barry, Argus ' lead ethylene consultant. "That should be manageable for US producers, especially as new natural gas egress pipelines come online in the second half of 2025 and into 2026." Short-term pricing From 28 May to 5 June, prompt-month Mont Belvieu, Texas, EPC ethane fell by 19.4pc to 19.25¢/USG, its lowest point since 13 November. Ethane's differential to its fuel value relative to Nymex natural gas at the Henry Hub turned negative on 29 May and remained negative thereafter, troughing at -5¢/USG on 4 June, the steepest discount since 15 December 2022. A flip to rejection by gas producers is typically indicated when ethane enters negative territory relative to its fuel value in spot natural gas in the Permian. Ethane's premium to spot gas prices at the Waha hub in west Texas declined from 12.37¢/USG to 9.4¢/USG across the period, and if Waha prices remain steady, ethane prices would need to halve to enter rejection territory in the Permian. Major operators may also be incentivized, however, to reject ethane into the gas stream at greater rates if prices fall below spot gas on the US Gulf coast, according to market participants, and would need to dip below a milder 17.375¢/USG to turn negative relative to its fuel value in Houston Ship Channel gas, which it sits at its tightest premium to since 4 March at 1.88¢/USG. Steep declines in prompt-month ethane pricing have widened the contango seen along the forward curve, possibly reflecting stronger sentiment once the US trade dispute with China is resolved. The prompt-forward month carry widened to 1.625¢/USG yesterday. June EPC ethane traded at a stronger 21.25-22.5¢/USG Friday morning, and sits at a 2.8¢/USG discount to its fuel value relative to Nymex gas, based on intraday values. By Joseph Barbour Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Growth, challenges for Mexico’s chemical industry: ANIQ

05/06/25

Growth, challenges for Mexico’s chemical industry: ANIQ

Houston, 5 June (Argus) — The Mexico chemical industry faces challenges in the coming years, said National Chemical Industry Association (ANIQ) foreign trade director Guillermo Miller said this week. There has been a decline in chemical production from Mexico's state-owned Pemex. The company produced around 9mn metric tonnes (t) of chemicals in 2010 but only 2.5mn t in 2024. This is a challenge to the industry which needs to find formulas that allow Pemex to increase production, Miller said at the UTECH Las Americas polyurethane conference in Mexico City, Mexico. Additionally, investment has slowed into the chemicals industry in Mexico. The last peak was in 2014 for a polyethylene project. Logistics also pose a challenge for the country and increase costs as the current infrastructure is forcing product to move around to be used, said Miller. Mexico currently relies heavily on imports of chemical feedstocks, with the majority coming from the US. The availability of raw materials is extremely limited, especially for byproducts of natural gas, ethane and propane. Despite these challenges, the chemical industry, which was 1.7pc of the country's GDP in 2024, is projected to have growth of 5pc on average over the next 10 years, Miller said. There also remains a strong demand for polyurethane since Mexico is in the top five countries for car and refrigerator production and is first in television production, said Miller. The country should focus on innovation, infrastructure, certainty in investments and addressing the raw material shortage, said Miller. By Catherine Rabe Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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