🏭 The Column: November 8, 2024

Good morning. Today we’re talking a bit about ADNOC acquiring Covestro, how we recycle airplane deicing fluids, and Citroniq’s plans to make polypropylene from corn in Nebraska.

Things Happened:

ADNOC is taking over

After a year and a half of rumors, and talks with various petrochemical companies, Abu Dhabi’s oil and gas company, ADNOC, has finally closed a deal: Covestro’s board just approved their $16.3bn takeover offer. This follows ADNOC’s $11bn offer that was shot down in June 2023, a $2.1bn offer for 38.3% of Braskem that was shot down in November 2023, and the successful acquisition of 25% of Austria’s OMV this past February. Ultimately this deal comes down to a couple of factors: 1) wealthy Gulf states are looking to diversify out of oil and gas production, and going downstream is one way of getting there, and 2) the European economy is fairly weak and tempted by deals. It’s fair to assume that not much will change for Covestro and their employees anytime soon, especially since the German company still requires that German labor representatives and independent shareholders have seats on the board. [LINK]

Recycling mono-propylene glycol

The world makes its mono-propylene glycol (MPG) by cracking olefins and naphtha to make propylene, oxidizing that propylene to make propylene oxide (PO), and then hydrolyzing that PO to make propylene glycols (which include MPG). This stuff mostly ends up in unsaturated polyester resins, cosmetics, detergents, and dog food, but about 25% of it ends up in antifreezes and deicing solutions. It’s deicing that is relevant here: these are solutions of MPG in water that we spray on planes to remove snow and ice to make them safe to fly. Airports typically spray the planes on dedicated pads with drain systems that collect the MPG-laden water so that it can be sent to wastewater treatment plants, but some airports collect and condense the MPG for reuse on site, or to sell back to a player in the virgin MPG market. Clariant is a player in the virgin MPG market—and now they are expanding their ability to process recycled MPG because they can incorporate it into one of their deicing product lines. [LINK]

Citroniq is headed to Nebraska

We just talked about how we get to MPG from propylene, but the bulk of the world’s propylene isn’t oxidized to PO, it’s polymerized to polypropylene (PP). But that’s not the only way of doing it—you can also ferment corn to make ethanol, dehydrate the ethanol to ethylene, dimerize it to butene, and then do metathesis between butene and ethylene to make propylene (which you’d then polymerize to PP). This is what Braskem has been doing in Brazil for over a decade, except instead of fermenting corn they are fermenting sugar cane. Ultimately this comes down to a push from the corn and ethanol world because Braskem’s process hasn’t been economical enough to scale outside of Brazil, and this PP is only has a 20% lower carbon footprint. In any case, Citroniq is trying to commercialize the process in the US, and they just selected a site location in Nebraska. [LINK]

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Other Things Happened:

BASF opened a new lab in Germany. SABIC just opened a new $170 specialty resin plant in Singapore. Another green hydrogen plant is being built in California. Solenis is officially acquiring BASF’s mining flocculants business. Solvay is licensing its hydrogen peroxide process for a new PO plant in China. Technip Energies, Alterra, and Neste are combining their technologies for future plastic pyrolysis plants. Asahi Kasei is forming a joint venture with Honda to produce lithium-ion battery separators in Canada.