Beyond ethics: Circularity is also good business

For Kenneth Lane, executive VP of Olefins and Polyolefins with LyondellBasell, the challenge for the petrochemical industry and others to transition to a lower carbon footprint for product manufacturing is not only essential but achievable, as well.

"Let’s face it," Lane said. "Our products are carbon, so the value of that carbon is going to continue to be there for the foreseeable future." One aspect that is important to remember about reducing the carbon footprint, Lane said, is the industry’s resilience when facing transition.

"We’ve transitioned from different energy sources, from different chemistries and feedstock sources, so I don’t really view this as anything different," he said. "We are an industry that has demonstrated, over time, the ability to do that, and I expect we will continue to do that, going forward."

A core part of the petrochemical industry is the continued drive toward sustainability and increasing the standard of living for people around the world, Lane observed.

"That’s not changing," Lane said. "Polyolefins, for example, have grown for more than 30 years, and they will continue to grow more over the next 30 years — I’m confident of that. If you look at the macro trends that are driving the economic growth, they’re not changing: growing population and higher standards of living. As you see those trends continue, you overlay that with the energy transition that polymers will facilitate."

Lane noted that many people maintain that GDP is driving polymer growth, but he believes the opposite to be true.

"I think polymers are driving GDP, because if you don’t have polymers, you don’t have access to quality healthcare," he said. "You don’t reduce food spoilage in places where food demand is increasing in a global economy, and reducing that spoilage becomes even more important. You won’t be creating insulation that improves energy efficiency of homes and buildings. You won’t facilitate the energy transition to electric vehicles because you can’t lightweight them. So today, we already have a sustainable product with many of our polymers."

Just as important as polymers are to demand-growth for global quality of life improvements is how the industry demonstrates the innovation necessary to produce them.

"Produce them with new processes — things like advanced recycling, lower carbon processes, electrification of hydrogen and carbon sequestration — all of those technologies that are really emerging right now. Those are going to come," he said.

Lane pointed to shorter-term actions that can be taken to improve energy efficiency.

"It’s operating our sites more efficiently by digitalizing sites and assets," Lane said. "All these things will combine to help us reduce the carbon intensity of how we make our products, but the products are still fundamentally carbon at the base."

The industry must consider, too, how it is going to innovate its products.

"We do need to have products that reduce the amount of recycled content where using mechanical recycling. It’s easy for advanced recycling, which starts with a virgin process and is then fed into your existing assets," Lane said. "But being able to innovate around the product side, which can transform more recycled content into products, is going to be a growing challenge."

Speaking on a panel at the World Petroleum Conference by S&P Global, held in Houston, Lane also noted, "there is a lot of good work happening between the industry and associations."

LyondellBasell launched a new strategy in March, Lane said, "and that strategy is sustainability. We’ve created a new circular and low carbon solutions strategic business unit. It really is a tremendous opportunity for us." Lane admitted that there are unique challenges to his company’s new strategy, but the potential benefits outweigh those challenges."

"This is a big part of the growth of the market," Lane said. "So let’s say the market grows by 4% over the next decade. Increasingly that growth rate is going to be driven by circular and renewable products. Unconstrained, we think that there is probably an opportunity there for increased demand of 15mn mt by 2030, but it’s going to be constrained by supply. If you don’t have public policy driving the ability to efficiently recover carbon molecules contained in the plastic waste, we will not be able to close the gap between the supply and that 15mn mt of demand. So public policy is a big part of that."

Advanced recycling

Joining Lane on the panel, Jennifer Chan, VP of Ventures with ExxonMobil Product Solutions shared that its low carbon solutions company was formed in 2021 with an eye on leading the industry’s energy transition. It commercialized emissions-reducing technology.

"We’re looking at things like carbon capture and storage, biofuels, and hydrogen," Chan said. "Our aim is to produce both the products and the energy that people need today in order to improve their quality of life and also provide sustainable solutions to meet society’s evolving needs."

Chan said that ExxonMobil has projects going on all around the world "that not only provide benefits for our customers, but also to their communities. These projects and plants create jobs and provide sustainable benefits to society. We’re producing products that make food packaging films more recyclable. We’re making products that go into solar panels and wind turbine blades."

Chan shared that ExxonMobil has also developed a particular technology for advanced recycling. "The beauty of this technology is that you can take mixed plastic waste and harder-to-recycle plastic waste that today goes to a landfill or incinerator, and we put that waste through a process that turns it into raw materials that then go into another process to make a wide variety of products and plastics with the same quality as if you started with virgin raw materials," she said. The company’s Baytown, Texas, facility, is one of North America’s largest and most advanced recycling facilities.

"By 2026, we hope to have more of those facilities deployed around the world," Chan said. "Combined, they’ll have a processing capability of about a billion pounds of plastic waste per year. That’s equivalent to what approximately two million Americans dispose of in a year."

Referring to the ability to mix plastic waste with hard-to-recycle plastic waste, Chan emphasized, "That doesn’t mean that the whole collection and sorting process is easy. Another thing that we’re doing is piloting a number of different business models in terms of the collection and sorting process."

ExxonMobil is also working on product design to make plastics "more sustainable by making the plastics more recyclable," Chan said. "And we’re working on sustainability inclusion in the greenhouse gas footprint and reducing emissions from our own operations. We have that net-zero ambition for Scope 1 and 2 emissions by 2050, and we’re working on things today to get there," she said.

Regulatory framework

Co-panelist Bruce Chinn, president and CEO of Chevron Phillips Chemical, said that while his company’s customers would absorb an even greater supply of recycled products if they were available, "there are complexities."

"I think you have to ensure that there is a regulatory framework. Right now, we’re in what I call the fight for the right classification for advanced recycling," Chinn said.

"We’re doing that state-by-state here in the U.S., and there really needs to be a federal bill. We support a federal bill around recycled content. Our industry association, the American Chemistry Council, has come out with five clear steps to the plan, and we support that."

One of those steps, Chinn said, is having the right mechanisms in place to encourage collection and recycling, "so you get that hard-to-recycle plastic into the value chain — and into recycled content that you need for advanced recycling."

"But I want to be clear," Chinn concluded. "We’re talking about recycling, but if you look at global demand, it is for both virgin and recycled polymers. Both will meet the demand the world says it needs."

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