🏭 We love corn plastic

Good morning. Since the Inflation Reduction Act was signed into law yesterday, it's probably worth reading about its implications for the chemical industry.

From the condenser:

· LG Chem and ADM's new PLA JV

· Dow's plans for small nuclear reactors

· POTD: sunscreen

Corn-based PLA is coming to Illinois

South Korean chemical company, LG Chem, and US-based grain processor, ADM, have agreed to form two joint ventures for the production of lactic acid and polylactic acid (PLA).

A little background:

When we talk about bio-based and biodegradable plastics, there are three main polymers you'll hear about: PLA, polybutylene adipate terephthalate (PBAT), and polyhydroxyalkanoates (PHAs). All of them come from different raw materials, have different physical properties, and different rates of biodegradation. PLA is made via the condensation polymerization of lactic acid (which was made via the fermentation of plant-based sugars). The polymer has properties similar to a PS and PET blend and will biodegrade under the right conditions.

So, what's the deal here?

Last September, these two companies signed a memorandum of understanding (MoU) to start exploring collaborative options (which is sort of like going on a first date). Now, a year later, the companies have announced their plans for working together (which is sort of like making it official). The plan is for ADM to own the majority of a new lactic acid plant in Decatur, Illinois, and for LG Chem to own the majority of a new PLA plant next door. The two companies still need to make their final investment decisions, and plan to do so sometime next year (which is sort of like asking for permission to propose).

Bigger picture:

The current global capacity for PLA is about 300,000 tons per year, so this new 75,000 ton per year site represents a huge bump in the supply side of the market. That bump should be welcomed as the demand for bioplastics is expected to triple over the next 5 years. That growth rate may sound impressive, but let's not forget the scale here. Total global polymer production is roughly 370 million tons per year. Even if bioplastic capacity grew 10x next year, it would still account for less than 1% of our total global production.

Dow Chemical's plans for tiny nuclear reactors

Midland-based chemical company, Dow Chemical, is partnering with X-energy to deploy a small modular nuclear reactor (SMR) at one of Dow's Gulf Coast sites by 2030.

The context you need:

Chemical manufacturing is special because value creation is closely tied to the amount of energy required to make and separate a given molecule. For example, there aren't minimum thermodynamic heat requirements needed to piece together a car, but those requirements do exist for splitting molecules (as you would do in a steam cracker). That's why the industry is "hard-to-abate". You need a lot of heat to do stuff, which is typically delivered via steam, which is typically produced by the combustion of natural gas.

Okay, so nuclear power?

Believe it or not, this isn't the first time Dow has toyed with the idea of using nuclear power for its sites. Back in 1967, Dow and the Consumers Power Company started talking about the same thing. By 1984, everyone was afraid of nuclear and the project was cancelled after flushing $4 billion down the drain (looking at you, Three Mile Island). A few years later the site was converted into a natural gas power plant.

Looking forward:

Think of this nuclear option as a hedge against Dow's development work on electric steam crackers with Shell. The question we need to be asking is what is likely to be more feasible by the time everyone's net-zero emission goals need to be achieved. Since X-energy is on-track to deliver four of these reactors by 2027, and the world does have one operational SMR, it seems like a safer bet.

Some more headlines:

• Tatneft is going to make helium and LNG

• Asia will build the most hydrotreaters in the next four years

• Mitsui Chemicals and Teijin are planning to make bio-based BPA and PC resins

• Sasol Chemicals will use more bio-based cogeneration steam in Germany

• Baker Hughes started up a new oilfield chemicals plant in Singapore

Product of The Day:

Today, we're breaking down sunscreen.

For the most part you can think of sunscreen as an emulsion with an oil phase (30%) mostly containing the active ingredients (more on that below), and the aqueous phase (70%) being mostly water with some added moisturizers (like propylene glycol). Sunscreen producers, like Johnson & Johnson, mix, pack, and market their own proprietary combinations of these molecules, but they aren't the ones who make them.

It's widely understood that sunscreen contains molecules that either reflect or absorb incoming UV rays from the sun. That's why people usually talk about sunscreen active ingredients in two broad groups: mineral or organic, the former (usually oxides of zinc or titanium) reflects photons and the latter (such as avobenzone, homosalate, octinoxate, octisalate, octocrylene, and oxybenzone) absorbs photons. Those reflecting metal oxides are mined or refined by folks like US Zinc, Chemours, and Venator. DSM makes a lot of those absorbing organic molecules including homosalate and octocrylene.

In case you're interested:

• Course: Want a complete overview of the major petrochemicals and how we make them? This will cover all the bases.*

• Company History: Ever wondered where all of these big oil companies came from? Read about how Rockefeller's company gave birth to them all.

• Podcast: Check out this episode featuring Dr. Tina Tosukhowong of PTT Global Chemical on her career and stance on sustainability.

• Tip: Whether you're in school or not, ramen is always good in a pinch—Immi is putting classic dorm-room-ramen to shame.*

The bottoms:

All views represent those of the author not their employer.