Released May 09, 2024 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--One theme dominated Industrial Info's webinar held this week on the global Chemical Processing Industry: the rise of spending for environmental, social and governance (ESG) initiatives. In Wednesday's presentation, Trey Hamblet, Industrial Info's vice president of research for the Chemical Industry, discussed the outsize role that the quest for greener commodities is having on the industry.
Hamblet noted that there is $840 billion in Chemical Industry spending planned for 2024 and 2025 that has been given a high or medium probability (70-99%) of moving forward as planned. This represents a $343 billion increase over the prior two-year period, and Hamblet pointed to an influx of projects with an ESG component as being a significant driver in this spending growth.
These ESG project components are both helped and hindered by outside influences. While global greenhouse mandates and government incentives help lead to their development, constraints such as inadequate renewable power supplies, new and expensive technologies, and competition with traditionally produced commodities can present an obstacle to ESG development.
Hamblet noted that many of the projects that contain ESG elements didn't necessarily start off that way but became greener undertakings as time made environment-friendlier projects more desirable. Typical examples of these "add-on" ESG components include carbon-capture technologies added to methanol plants to give traditionally produced methanol a blue label.
While ESG initiatives can take different forms including carbon capture and emissions reduction and recycling, the largest component of movement within the ESG sector comes in the form of green or blue commodities, including hydrogen, methanol and ammonia. While green commodities use emissions-free renewable energy in their production, blue commodities employ carbon-capture techniques in their production that reduce their emission footprints. Of the more than $191 billion worth of these active ESG-related commodities projects, 68% are for grassroot plants, while unit additions make up 20% of the overall spend. Europe leads the world in the value of these ESG projects, coming in with more than $43 billion in planned spending, followed by $31.1 billion for the U.S. and Canada.
Global projects for the production of hydrogen lead the way in planned commodities projects in 2024-25, which include 367 planned new plants, more than 100 unit additions and 43 expansions, leading Hamblet to conclude that if all these projects were built, it probably would lead to "too much of the same thing at same time." Hydrogen is an important building-block component used as a fuel in itself or as the building block for other commodities such as methanol and ammonia. The spending numbers for the hydrogen sector show the outsized importance of ESG-related spending, with green and blue hydrogen accounting for nearly $120 billion worth of projects planned in the coming two years, compared with traditional hydrogen's current share of $3.8 billion. Hamblet said, "The blue hydrogen probably has some of the most likely scenarios because it is by and large a traditional technology," using production techniques from natural gas, with a carbon-capture system to reduce emissions.
Methanol also is trending in a greener direction, although perhaps not as much as hydrogen. Green and blue methanol account for nearly $13 billion in planned 2024-25 spending, versus more than $31 billion aimed toward traditional methanol production. Blue methanol projects that include a carbon-capture component are taking center stage in the U.S.
While it really doesn't come in green and blue forms, Hamblet also discussed the significance of another building-block component, ethylene, which accounts for more than $64 billion in planned 2024-25 spending. As with so much else, East Asia dominates the spending for this commodity, with the Middle East and North America rounding out the top three positions.
If you missed this presentation the first time or would like to review portions of it, the webinar soon will be available in Industrial Info's On-Demand Webinar Library.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
Hamblet noted that there is $840 billion in Chemical Industry spending planned for 2024 and 2025 that has been given a high or medium probability (70-99%) of moving forward as planned. This represents a $343 billion increase over the prior two-year period, and Hamblet pointed to an influx of projects with an ESG component as being a significant driver in this spending growth.
These ESG project components are both helped and hindered by outside influences. While global greenhouse mandates and government incentives help lead to their development, constraints such as inadequate renewable power supplies, new and expensive technologies, and competition with traditionally produced commodities can present an obstacle to ESG development.
Hamblet noted that many of the projects that contain ESG elements didn't necessarily start off that way but became greener undertakings as time made environment-friendlier projects more desirable. Typical examples of these "add-on" ESG components include carbon-capture technologies added to methanol plants to give traditionally produced methanol a blue label.
While ESG initiatives can take different forms including carbon capture and emissions reduction and recycling, the largest component of movement within the ESG sector comes in the form of green or blue commodities, including hydrogen, methanol and ammonia. While green commodities use emissions-free renewable energy in their production, blue commodities employ carbon-capture techniques in their production that reduce their emission footprints. Of the more than $191 billion worth of these active ESG-related commodities projects, 68% are for grassroot plants, while unit additions make up 20% of the overall spend. Europe leads the world in the value of these ESG projects, coming in with more than $43 billion in planned spending, followed by $31.1 billion for the U.S. and Canada.
Global projects for the production of hydrogen lead the way in planned commodities projects in 2024-25, which include 367 planned new plants, more than 100 unit additions and 43 expansions, leading Hamblet to conclude that if all these projects were built, it probably would lead to "too much of the same thing at same time." Hydrogen is an important building-block component used as a fuel in itself or as the building block for other commodities such as methanol and ammonia. The spending numbers for the hydrogen sector show the outsized importance of ESG-related spending, with green and blue hydrogen accounting for nearly $120 billion worth of projects planned in the coming two years, compared with traditional hydrogen's current share of $3.8 billion. Hamblet said, "The blue hydrogen probably has some of the most likely scenarios because it is by and large a traditional technology," using production techniques from natural gas, with a carbon-capture system to reduce emissions.
Methanol also is trending in a greener direction, although perhaps not as much as hydrogen. Green and blue methanol account for nearly $13 billion in planned 2024-25 spending, versus more than $31 billion aimed toward traditional methanol production. Blue methanol projects that include a carbon-capture component are taking center stage in the U.S.
While it really doesn't come in green and blue forms, Hamblet also discussed the significance of another building-block component, ethylene, which accounts for more than $64 billion in planned 2024-25 spending. As with so much else, East Asia dominates the spending for this commodity, with the Middle East and North America rounding out the top three positions.
If you missed this presentation the first time or would like to review portions of it, the webinar soon will be available in Industrial Info's On-Demand Webinar Library.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
