Is Degradable Plastic PBAT Still Competitive?

Biodegradable plastics are considered an effective way to solve the problem of single-use plastic waste pollution. Biodegradable plastics include PLA (polylactic acid), PHA (polyhydroxyalkanoate), PBS polyester degradable plastics such as PBAT (polybutylene terephthalate-adipate), PBS (polysuccinic acid) Butylene Diester), PBSA (Poly Butylene Succinate-Adipate), PCL (Polycaprolactone) and PGA (Polyglycolic Acid) etc. It is estimated that by 2025, China's annual demand for degradable plastics will reach 3 million tons/year, but by then, China's biodegradable plastics production capacity will exceed 5 million tons/year, of which the newly planned capacity of PBAT alone will exceed 3 million tons. In the future, for the PBAT industry, who will the real competitiveness belong to?

Degradable plastics in China

The annual global plastic production is as high as 350 million tons, and China is close to 100 million tons. Globally, only 10% of single-use plastic products are recycled each year, about 12% are incinerated, and more than 70% are discarded into soil, air and oceans.

In terms of demand, in 2020, Northeast Asia represented by China is the world's largest biodegradable plastics market, accounting for more than 60% of global consumption, followed by Europe (25%) and North America (10%). In North America, the consumption of biodegradable plastics is expected to grow at an average annual rate of 6%. The food packaging, cutlery, cutlery and bag industry is the largest end-use consumer and the main growth driver of biodegradable plastic consumption. Benefiting from the global restrictions on plastic shopping bags and packaging, the world will achieve double-digit growth in the next few years.

From the perspective of supply, the production of biodegradable polymers in North America will increase to about 220,000 tons in 2021. Polylactic acid is the largest biodegradable plastic, accounting for 85% of the output; Western Europe will produce 200,000 tons, most of which come from starch and PBAT. and a small amount of PLA. In recent years, China's degradable plastics have grown rapidly. According to incomplete statistics, the scale of China's degradable plastics industry exceeds 1 million tons per year, including PBAT, PLA, PPC, PGA, PBS, PHA and PCL. In terms of product scale, the PBAT industry is the largest, with a total production capacity of nearly 800,000 tons per year, followed by PLA, with a total production scale of more than 200,000 tons per year. In 2021, China's biodegradable plastic output will be about 800,000 tons, basically achieving a balance between supply and demand.

China is the main battlefield of PBAT

It is estimated that by 2025, the demand for degradable plastics in China will reach 3 million tons, but by then, the production capacity of degradable plastics in China will exceed 5 million tons/year, of which the newly planned capacity of PBAT alone will exceed 3 million tons/year, followed by Added capacity from PLA and PGA.

PLA is an important sub-sector in the field of bio-based plastics and biodegradable products. As an ideal green and environmentally friendly polymer plastic, PLA has become the main product in biodegradable plastics. However, the short-term production capacity of PLA is difficult to rapidly expand to meet the growth in demand. The primary problem that plagues the development of China's PLA industry is the synthesis technology of PLA intermediate product lactide

PGA is an ideal completely biodegradable plastic with the characteristics of microbial degradation and water degradation. It can be completely degraded within 1 to 6 months according to its molecular weight and degradation environment. It is non-toxic and harmless. The final degradation products are carbon dioxide and Water, in addition to meeting the requirements of industrial composting, can also meet the requirements of household composting, soil degradation and marine environmental degradation. Several domestic enterprises have produced PGA through dimethyl oxalate (DMO), an important intermediate product of coal-to-ethylene glycol.

Due to its good tensile strength, toughness, ductility and heat resistance, PBAT is one of the best degradable plastics currently on the market and the largest source of degradable plastics in China in the future. Chinese PBAT consumption is mainly used to produce starch-containing compounds, or blended with PLA. The compound helps to greatly improve the tear strength and elongation of the finished product without compromising post processing. These compounds can reduce product cost while still maintaining their biodegradable and compostable properties, and are further processed into shopping bags, roll waste bags, electronics packaging, food packaging and mulch.

Recently, major companies have launched PBAT, such as Hualu Hengsheng 30,000 tons/year PBAT, Donghua Tianye 400,000 tons/year PBAT, Dongfang Shenghong 180,000 tons/year PBAT, Yongrong Holdings 500,000 tons/year PBAT , Shaanxi Coal Group 120,000 tons/year PBAT, Huayi New Materials 300,000 tons/year PBAT... The planned PBAT production capacity exceeds 3 million tons.

PBAT is synthesized from BDO, PTA and adipic acid AA. In terms of availability and cost of raw materials, BDO is the most critical raw material.

From the perspective of production cost, BDO accounts for 63% of the cost of the three raw materials and 56% of PBAT's revenue. Since both adipic acid and PTA belong to major categories of products, and the industry has a large production capacity and a meager production profit, they can rely on external mining to meet the demand for raw materials. As the production capacity of PBAT continues to expand and market competition intensifies, the price of PBAT appears or declines. However, BDO is driven by the demand of PBAT and traditional downstream spandex, and the price may further rise. For PBAT without BDO, it will face continuous losses. the predicament.

Whoever wins BDO wins the world

In 2021, the domestic BDO production capacity is about 2.3 million tons, and the consumption is about 1.7 million tons. The largest downstream application is the PTMEG-spandex industry chain, accounting for more than 50%, followed by PBAT and γ-butyrolactone for lithium battery materials. From the demand side, the new production capacity of spandex is limited, and it will only drive 300,000 tons of BDO consumption in the next few years. But for PBAT, 1 ton of PBAT consumes 0.54 tons of BDO. It is estimated that by 2025, China's demand for PBAT will be about 3.5 million tons, and about 3 million tons will be added on the basis of 2020, which means that at least Increase BDO production by 1.6 million tons to meet raw material demand. Although there are many BDO production capacity planned in the near future, the actual production capacity is expected to be less than 1.5 million tons by 2025, and the actual output is estimated to be less than 1 million tons.

The industry generally recognizes that BDO is the biggest competitive weakness, so most PBAT planned production capacities are equipped with BDO production lines to meet the demand for raw materials. However, there are still many insurmountable problems.

From the process point of view, the technologies for producing BDO include acetylenic aldehyde method, maleic anhydride method, butadiene acetyl oxidation method, allyl alcohol method and dichlorobutene hydrolysis method. The latter three processes have the problems of large investment, many by-products and difficult production. The acetylene aldehyde method is the most mature process route for the preparation of BDO, using acetylene and formaldehyde as raw materials; the source of acetylene raw materials is divided into the calcium carbide method to acetylene and the natural gas to acetylene route, both of which are currently mature and applied process methods. However, the investment of butane maleic anhydride hydrogenation method is large, and butane as the main raw material has a large external dependence.

Overseas, BDO is mainly produced through the natural gas-to-acetylene route. In China, the vast majority of BDO is based on calcium carbide method. As an important clean energy, natural gas has many restrictions on the development of natural gas chemical industry, and new natural gas-acetylene-BDO units are rare; under the dual-carbon policy, the approval of new calcium carbide production capacity is not easy, and the production process of calcium carbide consumes a lot of money Electric power and calcium carbide are made from coal, and the approval of new coal chemical projects will also be gradually tightened.

However, to prepare BDO by the hydrogenation of n-butane maleic anhydride (1.14 tons of n-butane is required to produce 1 ton of BDO), it needs to rely on external butane as a raw material. For propane dehydrogenation enterprises, it actually has a natural advantage. But for butane, it was originally mainly used for blending with propane as fuel demand. With the intensification of the global energy crisis, butane gas will gradually rise, and the demand for chemical industry will continue to increase, such as propane cracking, PBAT The demand for fuel is still increasing, and the price of butane will gradually deviate from the fuel properties in the future.

In the future, for the PBAT industry, the real competitiveness lies in having low-cost integrated BDO resources: one is to have supporting calcium carbide resources; the other is to obtain stable butane resources based on PDH devices. Only by developing PBAT based on resource advantages can we obtain a sufficiently strong market competitiveness.