The Future of Petrochemicals slides IEA.pdfThe bulk of the US petrochemical capacity is located on...

© OECD/IEA 2018

The Future of Petrochemicals

Columbia SIPA, Center on Global Energy Policy, 17th October 2018

IEA

Peter Levi, Energy Analyst

© OECD/IEA 20182

The IEA Global Family

The IEA works around the world to support accelerated clean energy transitions with unparalleled data,

rigorous analysis and real-world solutions.

© OECD/IEA 20185

The IEA is shining a light on areas of the energy system that do not garner as much attention as they

deserve.

Exploring key “blind spots” in global energy

© OECD/IEA 2018

Petrochemicals todayVarious roles in society, the energy system and the environment

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Petrochemicals are all around us

Our everyday lives depend on products made from petrochemicals. Many products needed for the

clean energy transition also rely on petrochemicals.

https://twitter.com/IEABirol/status/1048519758830886912

© OECD/IEA 20188

Demand for plastic has grown faster than for any other bulk material, nearly doubling since the

millennium.

Petrochemical products have been growing fast

Production growth for selected bulk materials and GDP

200

400

600

800

1 000

1 200

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Inde

x (1

971

= 1

00)

Steel

Aluminium

Cement

GDP

Plastic

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Higher-income countries consume up to 20 times as much plastic per capita as lower-income

economies, indicating significant global growth potential.

Plastics are a key driver of petrochemical demand

Per capita demand for major plastics in 2015

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Korea Canada UnitedStates

WesternEurope

Japan China Mexico Brazil India Africa

Pla

stic

res

in d

eman

d (k

g/ca

pita

)

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8%

40%

15%

4%

21%

12%

Primary gas demand (2017)

The importance of petrochemicals in oil and gas demand

Today, petrochemicals account for 14% of global oil, and 8% of global gas demand.

14%

5%

5%

56%

8%

12%

Primary oil demand (2017)

Chemicals

Power

Other Industry

Transport

Buildings

Other

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“Feedstocks” fly under the radar

Feedstock accounts for half of the chemical sector’s energy inputs, of which oil and gas account for

more than 90%.

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Asia dominates both global primary chemical production and naphtha feedstock consumption. North

America is the leader in ethane-based petrochemical production.

No “one size fits all” for production and feedstock…

HVCs (mainly for plastics)Ammonia (mainly for fertilisers)Methanol (diverse products)

Oil (ethane)Oil (naphtha)Oil (other oil)Natural gasCoal/COG

© OECD/IEA 201813

Asia dominates both global primary chemical production and naphtha feedstock consumption. North

America is the leader in ethane-based petrochemical production.

No “one size fits all” for production and feedstock…

North America

Middle East

Asia Pacific

Oil (ethane)Oil (naphtha)Oil (other oil)Natural gasCoal/COG


Europe

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Among the main costs of production, feedstock is the most influential factor in determining regional

production advantages.

…owing, in part, to regional cost advantages

Simplified levelised cost of petrochemicals in 2017

0

200

400

600

800

1 000

1 200

EthaneMEA

EthaneUS

EthaneEurope

MTOChina

NaphthaUS

NaphthaMEA

NaphthaChina

NaphthaEurope

US

D/t

HV

C Process energy

Feedstock

CAPEX/OPEX

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For integrated refiners, the petrochemical path can offer higher margins than fuels.

Oil companies are strengthening links with petrochemicals

Indicative economics for fuels and petrochemicals in Europe

0 500 1 000 1 500 2 000 2 500

Naphtha

Diesel

Gasoline

USD/tonne

Crude cost

Refinery gross margin

Retail gross margin

Ethylene margin

Polyethylene margin

Tax

© OECD/IEA 201816

The bulk of the US petrochemical capacity is located on the Gulf Coast, coinciding with substantial

refining capacity. The region is a hotspot for both natural gas and crude oil processing.

Levels and types of integration vary between regions

Legend

Refineries (1 to 600 kbbl per year)

Crackers (30 to 1 260 kt per year)

MTO, CTO, MTP (N/A)

PDH (650 to 750 kt per year)

Markers sized according to capacity. This map is without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries, and to

the name of any territory, city or area.

© OECD/IEA 201817

Despite being the largest industrial energy consumer, the chemical sector ranks third among industrial

CO2 emitters.

Petrochemicals take an environmental toll

Global final energy demand and direct CO2 emissions by sector in 2017

0

500

1000

1500

2000

2500

0

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600

900

1 200

1 500

Chemicals Iron and Steel Cement Pulp and Paper Aluminium

Direct C

O2

emissions (M

tCO

2 /yr)Fin

al e

nerg

y de

man

d (M

toe)

Final energy demand

Direct emissionsCO2

© OECD/IEA 2018

What is the current trajectory

for petrochemicals?The Reference Technology Scenario (RTS)

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0

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800

1980 1990 2000 2010

Pro

duct

ion

(Mt)

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80

2017 2020 2030 2040 2050

Production (kg/capita)

Production of key thermoplastics more than doubles between 2010 and 2050, with global average per

capita demand increasing by more than 50%.

Plastics continue their strong growth trajectory…

Production of key thermoplastics

0

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400

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600

700

800

1980 1990 2000 2010

Pro

duc

tion

(Mt)

PET

HDPE

PVC

LDPE

PP

PS

Other

0

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80

2017 2020 2030 2040 2050

Pro

ductio

n (kg/cap

ita)

RTS per capita

High demand variant

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9.6

0.6 1.6

1.7

2.5

3.2

0

2

4

6

8

10

Shipping/other

Passengervehicles

Aviation Road freight Petrochemicals Growth2017-2030

mb/d

Petrochemicals are the fastest growing sector of oil demand, accounting over a third of growth to 2030,

and nearly half to 2050.

Petrochemicals grow more than any other oil demand driver

Oil demand growth to 2030

© OECD/IEA 201821

Regions with a feedstock advantage and a strong source of domestic demand account for the lion’s

share of production increases in the longer term.

Underpinned by robust growth for primary chemicals


© OECD/IEA 201822

The Middle East and North America utilise available ethane, while Europe and Asia Pacific stick to

naphtha and coal.

Feedstocks remain in familiar territory in the RTS

0

30

60

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120

150

2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050

North America Europe Middle East ROW

Mto

e

HVCs

0

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350

2017 2030 2050

Asia Pacific

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25

2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

Ammonia

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75

2017 2030 2050

Asia Pacific

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20

2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

Methanol

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24

36

48

60

2017 2030 2050

Asia Pacific

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25

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75

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125

2017 2030 2050 2017 2030 2050

Ammonia Methanol

Mto

e

Global totals

0

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300

450

600

750

2017 2030 2050

HVCs

Coal/COG Natural gas

Other oil Naphtha

Ethane Bioenergy

Electricity

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90

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150

2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

HVCs

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2017 2030 2050

Asia Pacific

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25

2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

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Ammonia

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60

75

2017 2030 2050

Asia Pacific

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2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

Methanol

0

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36

48

60

2017 2030 2050

Asia Pacific

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25

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75

100

125

2017 2030 2050 2017 2030 2050

Ammonia Methanol

Mto

e

Global totals

0

150

300

450

600

750

2017 2030 2050

HVCs


Other oil Naphtha

Ethane Bioenergy

Electricity

0

30

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90

120

150

2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

HVCs

0

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350

2017 2030 2050

Asia Pacific

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25

2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

Ammonia

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60

75

2017 2030 2050

Asia Pacific

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2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

Methanol

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36

48

60

2017 2030 2050

Asia Pacific

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125

2017 2030 2050 2017 2030 2050

Ammonia Methanol

Mto

e

Global totals

0

150

300

450

600

750

2017 2030 2050

HVCs


Other oil Naphtha

Ethane Bioenergy

Electricity

HVCs – (mainly for plastics)

Ammonia – (mainly for fertilisers)

0

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60

90

120

150

2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

HVCs

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350

2017 2030 2050

Asia Pacific

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2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

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Ammonia

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2017 2030 2050

Asia Pacific

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2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

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Methanol

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60

2017 2030 2050

Asia Pacific

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125

2017 2030 2050 2017 2030 2050

Ammonia Methanol

Mto

e

Global totals

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450

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750

2017 2030 2050

HVCs


Other oil Naphtha

Ethane Bioenergy

Electricity

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2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

e

HVCs

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2017 2030 2050

Asia Pacific

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2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

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Ammonia

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2017 2030 2050

Asia Pacific

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2017 2030 2050 2017 2030 2050 2017 2030 2050 2017 2030 2050


Mto

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Methanol

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60

2017 2030 2050

Asia Pacific

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2017 2030 2050 2017 2030 2050

Ammonia Methanol

Mto

e

Global totals

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750

2017 2030 2050

HVCs


Other oil Naphtha

Ethane Bioenergy

Electricity

© OECD/IEA 2018

An alternative, more

sustainable pathwayThe Clean Technology Scenario (CTS)

© OECD/IEA 201824

050

100150200

2017

Index

Carbon dioxide

Air pollutants

Water pollutants

Carbon dioxide

Air pollutants

Water pollutants

The Clean Technology Scenario, helps achieve several UN Sustainable Development Goals. By 2050,

environmental impacts decrease across the board, including CO2, air and water pollutants.

Building towards a more sustainable chemical sector

Pollutants from primary chemical production

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50

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150

200

2017 2030 2050

Reference Technology Scenario

Clean Technology Scenario

Index 2017 = 100

050

100150200

2017

Index

Carbon dioxide

Air pollutants

Water pollutants

Carbon dioxide

Air pollutants

Water pollutants

Relevant UN SDGs

© OECD/IEA 201825

By 2050, the collection rate for recycling nearly triples in the CTS, resulting in a 7% reduction in

primary chemical demand.

Plastic recycling increases sharply in the CTS

Secondary plastic production, primary chemical production savings and plastic collection rates

0%

20%

40%

60%

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100%

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2017 2030 2030 2050 2050 2030 2050

Secondary plastic production Primary chemicalsavings

Global average collection rate

Glo

bal p

rodu

ctio

n/sa

ving

s (M

t)

Secondary plastic production (2017)

Secondary plastic production (RTS)

Secondary plastic production (CTS)

Primary chemical savings (CTS)

Global average collection rate

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0

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2017 2020 2025 2030 2035 2040 2045 2050

Fee

dsto

ck o

il de

man

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b/d)

Feedstock oil demand Proportion of total oil demand

RTS

0%

5%

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15%

20%

25%

30%

2017 2020 2025 2030 2035 2040 2045 2050

CTS

The share of chemical feedstock in total oil demand in the CTS is much higher than in the RTS, despite

lower absolute volumes, as oil demand for other sectors declines much more sharply.

Challenges for refiners as feedstock dominates oil demand…

Oil demand for chemical feedstock and share in total oil demand by scenario

16%

26%

© OECD/IEA 201827

Petrochemical feedstock is the only oil growth segment in the CTS. By 2050, per capita oil demand for

plastic consumption overtakes that of road passenger transport in several regions.

…even overtaking road passenger transport

0.5 toe/capita

Oil demand for road

passenger transport

Oil demand for plastic

consumption

2017 2050 2017 2050

United States

European Union

China

India

© OECD/IEA 201828

Chemical sector emissions of CO2 decline by 45% by 2050 in the CTS, with energy-related emissions

declining much less steeply than process emissions.

Reducing CO2 emissions in the chemical sector is key…

Direct CO2 emissions by scenario

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Cum

ulative emissions (G

tCO

2 )Ann

ual

emis

sion

s (G

tCO

2)

Additional emissions (RTS)

Energy-related emissions (CTS)

Process emissions (CTS)

Cumulative emissions reductions (CTS)

© OECD/IEA 201829

A balanced portfolio of options are required to deliver cumulative emissions reductions relative to the

RTS of 24% between 2017 and 2050, in the CTS.

A more sustainable chemical sector is achievable

Contribution to cumulative CO2 emissions reductions between the CTS and RTS

6%9%

25%

25%

35%

Alternative feedstocks

Plastic recycling

Energy efficiency

Coal to natural gas feedstock shifts

CCUS

© OECD/IEA 201830

Additional CO2 capture capacity deployed in the CTS relative to the RTS is primarily for storage

applications.

CCU/S delivers more than one third of CO2 savings in the CTS

CCU/S deployment in the CTS and the RTS

0%

5%

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15%

20%

25%

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2017 RTS CTS RTS CTS RTS CTS RTS CTS RTS CTS RTS CTS RTS CTS

2020 2025 2030 2035 2040 2045 2050

Proportion of total generated

Em

issi

ons

(MtC

O2/

yr) Capture for storage

Capture for utilisation

Capture for storage,% of total generated

Capture for utilisation,% of total generated

© OECD/IEA 201831

The recycling infrastructure necessary in the CTS lays the groundwork to drastically reduce plastic pollution

from today’s unacceptable levels. Cumulative leakage more than halves by 2050, relative to the RTS.

Plastic waste leakage is an urgent pollution problem

Annual and cumulative ocean-bound plastic leakage by scenario

0

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600

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2010 2015 2020 2025 2030 2035 2040 2045 2050

Cum

ulative plastic waste leakage (M

t)

Pla

stic

was

te le

akag

e ra

te (

Mt/y

r)

CTS Annual leakage

RTS annual leakage

RTS cumulative leakage

CTS cumulative leakage

© OECD/IEA 201832

0

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1 000

1 250

0

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RTS CTS RTS CTS RTS CTS

Ammonia Methanol HVCs

US

D b

illio

n, H

VC

s

US

D b

illio

n

Avoided production

Coal to gas capital savings

Electrolysis

Carbon capture

Bioenergy based production

Core production equipment

Savings due to recycling and coal to gas feedstock switching mean the CTS (USD 1.5 trillion) is less

capital-intensive than the RTS (USD 1.7 trillion)

The CTS can be pursued cost-effectively

Cumulative capital investments by scenario

© OECD/IEA 201833

Beyond the CTS: What if only alternative feedstocks were used?

By 2050, total primary chemical production could require up to 1.25x total industrial electricity demand

and 7.5x industrial biomass demand.

Energy demand for primary chemical production from alternative feedstocks

0

500

1 000

1 500

2 000

2 500

3 000

2017 2017 2030 2050 2017 2030 2050

Bioenergy pathway Electricity pathway

Mto

e

Bioenergy

Electricity

Fossil fuels

Dashed lines indicated

additional requirements for

chemicals from refineries

© OECD/IEA 201834

Top 10 policy recommendations (1/2)

Production of chemicals

1. Directly stimulate investment in R&D of sustainable chemical

production routes and limit associated risks.

2. Establish and extend plant-level benchmarking schemes for energy

performance and CO2 emissions. Incentivise their adoption through

fiscal incentives.

3. Pursue effective regulatory actions to reduce CO2 emissions.

4. Require industry to meet stringent air quality standards.

5. Fuel and feedstock prices should reflect actual market value.

© OECD/IEA 201835

Top 10 policy recommendations (2/2)

Use and disposal of chemical products

6. Reduce reliance on single-use plastics other than for essential non-

substitutable functions.

7. Improve waste management practice around the world.

8. Raise consumer awareness about the multiple benefits of recycling.

9. Design products with disposal in mind.

10. Extend producer responsibility to appropriate aspects of the use and

disposal of products.

© OECD/IEA 2018

Conclusions: Shining a light on “blind spots” of global energy

• Petrochemical products are deeply embedded in our economies and everyday

lives. They also play a key role in many components of clean energy technologies.

• Petrochemicals are the largest driver of global oil demand, accounting for more

than a third of the growth to 2030, and nearly half to 2050.

• China, the United States and the Middle East lead the growth in petrochemicals

production.

• The production, use and disposal of chemicals take an environmental toll but

achievable and cost-effective steps can be taken to make these more sustainable.

• The IEA will continue to shine a light on energy “blind spots”: trucks, air

conditioners, modern bioenergy… now petrochemicals… and more to come.

© OECD/IEA 201839

Slide notes

General notesPrimary chemicals refers to HVCs, ammonia and methanol. HVCs = high-value chemicals (ethylene, propylene, benzene, toluene and mixed xylenes), COG = coke oven gas.

Slide 8Outputs of different industrial sectors are displayed on an indexed basis referred to 1971 levels. Aluminium refers to primary aluminium production only. Steel refers to crude steel production. Plastics includes a subset of the main thermoplastic resins. Sources: Geyer, R., J.R. Jambeck and K.L. Law (2017), “Production, use, and fate of all plastics ever made”, https://doi.org/10.1126/sciadv.1700782; Worldsteel (2017), Steel Statistical Yearbook 2017; IMF (2018), World Economic Outlook Database; USGS (2018a), 2018 Minerals Yearbook: Aluminium; USGS (2018b), 2018 Minerals Yearbook: Cement; USGS (2018c), 2018 Minerals Yearbook: Nitrogen.

Slide 9Plastics includes the main thermoplastic resins and excludes all thermosets and synthetic fibre. The quantities shown reflect the apparent consumption (production less exports plus imports) by the next tier in the manufacturing chain following primary chemical production (e.g. plastic converters for plastics). Source: METI (2016), Future Supply and Demand Trend of Petrochemical Products Worldwide, Tokyo.

Slide 10Petrochemicals includes process energy and feedstock.

Slide 11All flows in the diagram are sized on a mass basis. Secondary reactants and products are the compounds specified within chemical reactions that do not form part of the feedstock or main products. Key examples include water, CO2, oxygen, nitrogen and chlorine. Some of the secondary products entering the sector on the left of the figure may well coincide with those leaving it on the right – CO2 emitted from ammonia facilities and utilised in urea production is a key example. Mtce = Million tonnes of coal equivalent. Source: Adapted from Levi, P.G. and J.M. Cullen (2018), “Mapping global flows of chemicals: From fossil fuel feedstocks to chemical products”, https://doi.org/10.1021/acs.est.7b04573.

Slides 12-13The left pie chart of the pair for each region displays feedstock usage, while the right pie chart displays primary chemical production. The pie charts are sized in proportion to the total quantity (Mtoe or Mt) in each case. Source: IFA (2018), International Fertilizer Association Database and expert elicitation.

Slide 14Fuel and feedstock costs are calculated based on average prices during 2017, whereas capital expenditure (CAPEX) and fixed operational expenditure (OPEX) are assumed to remain constant both over time and between regions, for a given technology. CAPEX assumptions: USD 1 500 /tHVC for ethane steam cracking; USD 1 000/t HVC for MTO; USD 2 050/tHVC for naphtha steam cracking. Fixed OPEX: 2.5-5.0% of CAPEX. Discount rate is 8%. A 25 year design life is assumed for all equipment. Energy performance ranges: 12-19 gigajoules (GJ)/tHVC for naphtha steam cracking; 14-17 GJ/tHVC for naphtha steam cracking; 11 GJ/tHVC for MTO. Feedstock requirements correspond to those shown in Figure 2.4. Process energy requirements include fuel, steam and electricity, are calculated on a net basis, assuming full utilisation of available fuel gas in the product stream. ME = Middle East, US = United States. Sources: Feedstock prices from Argus Media (2018), Key Prices, www2.argusmedia.com/en/methodology/key-prices.

© OECD/IEA 201840

Slide notes (continued)

Slide 17Final energy demand for chemicals includes feedstock, and, for iron and steel, it includes energy use in blast furnaces and coke ovens. Direct CO2 emissions includes energy and process emissions in the industry sector. Mtoe = million tonnes of oil equivalent.

Slide 19Other refers to a selection of other thermoplastics: acrylonitrile butadiene styrene, styrene acrylonitrile, polycarbonate and polymethyl methacrylate. Volumes of plastic production shown are independent of the level of recycling. The impact of recycling is registered in the lowering of demand for primary chemicals required to produce the plastic volumes shown above. The RTS high demand sensitivity variant is a separate scenario performed to explore the sensitivity of our results to higher than expected demand. Only the per capita demand figures are show for the high demand sensitivity variant in Figure 4.2. Details of the high demand sensitivity variant analysis can be found in the online annex accompanying this publication. Sources: Data consulted in making projections from Geyer, R., J.R. Jambeck and K.L. Law (2017), “Production, use, and fate of all plastics ever made”, https://doi.org/10.1126/sciadv.1700782; Levi, P.G. and J.M. Cullen (2018), “Mapping global flows of chemicals: From fossil fuel feedstocks to chemical products”, https://doi.org/10.1021/acs.est.7b04573; OECD (2018), Improving Markets for Recycled Plastics: Trends, Prospects and Policy Responses.

Slide 20Other includes the net contribution of all other oil demand sectors.

Slide 22COG = coke oven gas; ROW = rest of the world. Electricity denotes the use of electrolytic hydrogen, and is displayed in terms of electricity input.

Slide 24All environmental impacts relate to primary chemical production (ethylene, propylene, benzene, toluene, mixed xylenes, methanol and ammonia). Air pollutants includes nitrous oxides, sulphur dioxide and fine particulate matter. Water pollutants refers to ocean-bound plastic leakage. Carbon dioxide refers to direct emissions from the chemical and petrochemical sector.

Slide 25Error bars show the range of resin-specific global average collection rates. Projected volumes of total plastic production are independent of the level of recycling. The impact of recycling is registered in the lowering of demand for primary chemicals. Sources: Data consulted in making projections from Geyer, R., J.R. Jambeck and K.L. Law (2017), “Production, use, and fate of all plastics ever made”, https://doi.org/10.1126/sciadv.1700782; Levi, P.G. and J.M. Cullen (2018), “Mapping global flows of chemicals: From fossil fuel feedstocks to chemical products”, https://doi.org/10.1021/acs.est.7b04573; OECD (2018), Improving Markets for Recycled Plastics: Trends, Prospects and Policy Responses.

Slide 27toe/capita = tonne of oil equivalent per capita. The diameter of each circle is proportionate to the oil demand per capita for each year/sector/region. Plastic production refers to the oil demand for feedstock and process energy used for

© OECD/IEA 201841

Slide notes (continued)

Slide 28Cumulative direct CO2 emission reductions refer to primary chemical production and not to the total chemical sector, and cover the period 2017-50. Coal to natural gas savings include the reduction of process emissions in the production of methanol and ammonia. CO2 emission savings resulting from feedstock shifts within the same energy commodity (e.g. naphtha to ethane) are included in energy efficiency.

Slide 29Technology selection in the modelling underlying this analysis is based on constrained least-cost optimisation covering energy and investment costs. The investment estimates provided include the capital expenditure on core process technology and CO2 emission mitigation technologies, including carbon capture, installed between 2017 and 2050. The assessment is expenditure based within the sites of primary chemical production. Therefore, costs associated with plastic waste collection, sorting, processing and secondary production are not included, nor are costs relating to CO2 transportation and storage. Investments required for air pollution mitigation technologies are not included. Investment costs are not attributed to energy savings from improved operation and maintenance practices, unless they require new process equipment. Installation, construction and labour costs are not included since it is the investments that relate to the chemical sector specifically that are relevant to this analysis. If included, variation in local construction and labour practices would cloud the underlying trends, not to mention the greater uncertainty associated with such costs. All cumulative investment cost estimates are quoted in undiscounted terms.

Slide 31In the RTS, quantities of plastic leakage are estimated based on projections of plastic waste and estimates of current rates of leakage, the latter of which are assumed to remain constant. Current rates of leakage from Jambeck, J.R. et al. (2015), “Plastic waste inputs from land into the ocean”, https://doi.org/10.1126/science.1260352.

Slide 32Technology selection in the modelling underlying this analysis is based on constrained least-cost optimisation covering energy and investment costs. The investment estimates provided include the capital expenditure on core process technology and CO2 emission mitigation technologies, including carbon capture, installed between 2017 and 2050. The assessment is expenditure based within the sites of primary chemical production. Therefore, costs associated with plastic waste collection, sorting, processing and secondary production are not included, nor are costs relating to CO2 transportation and storage. Investments required for air pollution mitigation technologies are not included. Investment costs are not attributed to energy savings from improved operation and maintenance practices, unless they require new process equipment. Installation, construction and labour costs are not included since it is the investments that relate to the chemical sector specifically that are relevant to this analysis. If included, variation in local construction and labour practices would cloud the underlying trends, not to mention the greater uncertainty associated with such costs. All cumulative investment cost estimates are quoted in undiscounted terms.

Slide 33Primary chemical production is based on the CTS projection. The energy required to produce primary chemicals from refining is estimated based on the average energy intensity of HVC production in 2017.

The Future of Petrochemicals slides IEA.pdfThe bulk of the US petrochemical capacity is located on...

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