🏭 December 2022: Round-Up

Good morning. Welcome to the December 2022 Round-Up! These are usually sent on the first Monday of the new month, but last week was weird, so I decided to send it out a little later instead.

Anyways, here's what we talked about last month:

• Dec 2nd ($): Ineos' new VLEC charters and Shell's dairy-based RNG acquisition

• Dec 7th ($): Sasol’s petroleum-based alcohols are back and PKN Orlen and Aramco’s potential complex

• Dec 9th ($): Trillium's Series A round and more formaldehyde in Sweden

• Dec 12th: Shell's sulfur for lithium extraction and Air Products' new green H2 site

• Dec 14th ($): Metso Outotec and hydrogen-reduced iron and Clariant's struggling cellulosic ethanol plant

• Dec 16th ($): Exxon's molecular recycling site start-up and NET Power's upcoming SPAC

• Dec 19th: Bio-based ethylene for PET and less phthalic anhydride in Korea

• Dec 21st: Eni's cellulosic ethanol enzyme acquisition and Shell's small modular nuclear interests

• Dec 23rd ($): Fulcrum's waste gasification plant and cracking residue slurries in China

It's always more apparent to me in hindsight that The Column covers a smörgåsbord of topics than it is when I'm writing them. December feels particularly all over the place, but as long as "I'm writing about what I find to be most interesting", it's probably going to stay that way.

I've decided that the best way to look back at a month isn't to try to take every event and piece it into some grand narrative (as I've attempted to do in the past), but to look back and pick out a few topics that I think deserve extra attention.

When I do that, these were the things that stood out to me:

1. How we use Shell's sulfur to extract lithium.

2. Some connections between cellulosic ethanol, ethylene, and PET.

3. Fulcrum's plant as the far end of recycling.

Let's talk about Shell's sulfur ($) first.

This news wasn't interesting from an events perspective, it was interesting because it represents (1) a very weird connection between crude oil and lithium-ion batteries, and (2) a case where a chemical isn't used strictly for its fuel or material value.

It's worth breaking down that connection (1) before talking about that value thing (2).

Here's what's going on here: crude oil contains hydrogen sulfide, refiners remove that hydrogen sulfide and inadvertently become sulfur producers, that sulfur is sold to a mining company, the mining company uses it to make sulfuric acid, and then that sulfuric acid is used to extract lithium from lithium-containing ore.

Okay, now here's what I mean about the value thing (2)—when a chemical is used for it's fuel value, all of its bonds are broken in the name of harvesting energy. At the other end of the spectrum, when a chemical is used for its material value, its bonds are usually preserved for some eventual human-driven application.

The use of sulfur to make sulfuric acid for lithium extraction doesn't seem to fit either of those two options. It's final use is not as a fuel or in a material. It's final use is to perform a function.

Metals for catalysis are similar, as are polymer additives that serve solely as a processing aid but remain in the product's final form. I'm not sure how to think about these use cases quite yet, but they're important not to lose sight of, because they're everywhere.

Now let's talk about cellulosic ethanol ($), ethylene, and the connection to PET.

The conversation around ethanol typically is framed like a battle between corn processors and the refining industry. Refiners don't love that we blend ethanol into gasoline because it effectively reduces demand for gasoline (by substitution) and makes other petroleum-based gasoline oxygenates (like ETBE) obsolete. But we make a lot of ethanol because of the RFS, and with that scale comes the feasibility of using it as more than a fuel oxygenate. So when we look into sustainable paths to ethylene and its plethora of derivatives, ethanol is usually a top contender.

The fact that ethanol is a top contender is mostly due to a lack of better options. Since ethanol is made via fermentation, you eventually run into scaling issues (reaction rates, tank mixing issues, yields, batching, etc). Plus, ethanol is usually derived from hydrolyzed starch (as opposed to cellulose) that we depolymerize with amylase. That means producing ethanol requires a feedstock that could be food (the starch).

Cellulosic ethanol is meant to be a middle ground. It uses non-food based feedstocks (think wheatstraw), but it's expensive. So until costs drop or high-value material applications for cellulosic ethanol are created, it's just going to keep popping up, making headlines, and then dying off after a while (as it has for the last couple of decades).

When it comes to high-value material applications for cellulosic ethanol, ethylene derivatives like ethylene glycol (MEG) are what come to mind. MEG is commonly reacted with terephthalic acid (PTA) to make polyethylene terephthalate (PET), which has more obvious high-value consumer-driven applications (such as polyester clothing) than something like polyethylene.

In any case, Mitsui might build a ethanol-to-MEG plant somewhere in the US Southeast, which seems awfully compatible with Origin Material's ambitions. That ethanol will probably just come from corn starch, but if this value chain is built out, then any cellulosic ethanol plant headed to the US would probably follow the same chain.

Okay, now for the last thing: Fulcrum's recycling plant ($).

Fulcrum represents the far end of the recycling spectrum, where separation costs are so high that the only reasonable means of salvaging the waste is to completely destroy it prior to reassembly. In many ways gasification is sort of just like pyrolysis plus a second round of steam cracking, except you do less separation beforehand, and use more energy to get the job done.

But no matter how you look at it, it's hard to ignore the use case—if we want to eliminate the waste issue, some waste, like diapers, will need to be recycled as well. This begs some of my favorite questions in this realm: how much waste is an acceptable amount of waste? Does it really make sense to valorize every piece of trash we produce? How much energy should be expended doing so?

For now, sites like the one Fulcrum has built are a fantastic example of what is possible. I'm just wondering whether the goal should be eliminate all waste, or just some acceptable quantity of waste.

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