Global demand for renewable polyethylene exceeds production capacity

It was reported on November 10 that the CFO of Brazilian polyolefin producer Braskem said on Wednesday that global demand for its renewable polyethylene (PE) far exceeds its current capacity.

Braskem produces renewable PE by dehydrating ethanol to produce ethylene. Then, ethylene is polymerized in conventional equipment to make polyethylene.

Braskem produces renewable ethylene at its Triunfo plant in the Greater South state of Brazil.

The company plans to expand its renewable ethylene production capacity by 30% to 260,000 tons/year in 2022.

Braskem chief financial officer Pedro Freitas said that if Braskem can use its renewable ethylene to produce 1 million tons of polyethylene per year, it will be sold out. He made the above remarks on the performance conference call.

"I think the market currently has a demand of 1 million tons." Freitas said.

He said that Braskem was able to pass on ethanol costs through sales contracts. In addition, Braskem has some customers willing to sign long-term contracts for the company's renewable PE.

Freitas said the challenge for Braskem is to find a way to accelerate the capacity expansion of the material.

Freitas said Braskem is considering establishing a partnership or developing its own factory.

Recently, the company signed a Memorandum of Understanding (MoU) with Lummus Technology to jointly license the technology to produce renewable ethylene in projects in North America and Asia.

Braskem did not disclose details about the North American project.

The Asian project is in cooperation with Thailand's SCG Chemical Company. The two companies announced in September this year that they had signed a memorandum of understanding to study the development of the project.

Freitas said that the Lummus partnership provides Braskem with the possibility of delivering multiple renewable ethylene projects.

He said: "The market will require the development of new projects on a global scale. This is a complementary initiative and the beginning of a greater cause in the future."