Green Plastics and PET Recycling Gain Ground as Chemical Industry Spending Continues to Improve

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Over the past decade, the Chemical Processing Industry (CPI) has witnessed a growing movement toward "going green," as consumers and advocate groups began to make demands on the industry to take a leading role in preserving the environment and resources. Several new and grassroot plants have been constructed in the United States in recent years, with product lines focused on producing bio-plastics and bio-resins. Considering the cost to develop and explore new technologies to support this production, many plans for new capacity were delayed or slowed as a result of the recent economic woes. As global markets improve, so will the outlook for access to the R&D dollars needed to develop the new technologies necessary to make production of "green plastics" more economical on a commercial scale.

For the CPI, going green isn't limited to bio-plastics, it also includes polyethylene terephthalate (PET) recycling, waste tire recycling, and production of big block chemicals like polyethylene and polypropylene, plus materials for rechargeable batteries. PET recycling is one segment of this environmental movement that actually gained ground in recent years despite investment challenges. The trend to collect and recycle post-consumer plastics has been supported by consumers and industry groups with the construction of several grassroot plants in the last few years with at least six new PET recycling plants currently being planned in the U.S.

Braskem SA (NYSE:BAK) (Sao Paulo, Brazil), The Dow Chemical Company (NYSE:DOW) and others are planning world-scale unit additions in South America to produce green plastics such as polyethylene and polypropylene, with chemical feedstock originating from sugarcane or similar resources rather than traditional petroleum feedstock. Although these projects currently seem limited to regions like South America where green feedstock appears abundant, the trend seems destined to grow globally as technologies advance and cost competitiveness improves against long-established feedstock.

The recycling of post-consumer automotive tires to produce oils and virgin carbon black continues to gain lots of interest, although very few seem to make it successfully to the construction phase in comparison to market potential. Millions, if not billions, of automotive tires are disposed of in North America every year. Attempts to economically recover some of their value--while also keeping them out of landfills--are constrained by the attractive operating cost for producers of carbon black from cheap natural gas. As with most environmental challenges, success often depends on an acceptance and persuasion by consumers or advocacy groups. Spending for the North America CPI is set to increase in the quickly approaching year, setting expectations the increase will help to spur interest and investment dollars in some of these "going-green" projects.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.