Ethylene is a colorless and flammable gas that is widely used in the chemical industry for the production of various chemicals and plastics. It is the simplest alkene and has the chemical formula C2H4. The major end-use applications include Packaging, Automotive, Construction, Agrochemicals, Textile, etc. Ethylene is produced by the cracking of hydrocarbons, such as natural gas, naphtha, and ethane. It is one of the most important raw materials used in the chemical industry and is used in the production of various products including polyethylene, ethylene oxide, ethylene glycol, and vinyl acetate.
The Ethylene market is driven by its derivative Polyethylene (PE). The increasing working population in the world has created a need for packaged food & beverages, which is expected to boost the PE market. PE is also used in the manufacturing of vehicle exteriors, electrical insulation, gasoline tanks, wires & cables, among others. The increasing investment in the building and construction segment is boosting the demand for PE which will increase the Ethylene market overall.
The packaging industry dominates the end-use segment and accounts for more than half of the Ethylene demand and is anticipated to dominate the market in the forecast period as well. The lightweight and strong compression abilities of Polyethylene have led to an increasing demand in the packaging sector which boosts the demand for Ethylene as well. Advancements in technology, such as the development of new production processes and the use of renewable energy sources, are expected to increase efficiency and reduce the cost of ethylene production, which could drive the demand for the ethylene in the upcoming years.
Asia-Pacific accounted for the largest share of Ethylene globally. The region remains the most attractive for Ethylene markets in the long-term forecast on the back of high-growth markets including India, China, Taiwan, Thailand, etc.
Several companies are investing in new ethylene production facilities to meet the growing demand for the chemical. For example, ExxonMobil is planning to build a new ethylene production unit at its Baytown complex in Texas, USA, which is expected to start operations in 2023. In addition, Chevron Phillips Chemical is planning to build a new ethylene production unit in Texas, which is expected to start operations in 2024. SABIC is planning to build a new ethylene production unit in China, which is expected to start operations in 2023.
Companies are also shifting their focus to create biobased Ethylene. SCGC has signed a MOU with Braskem, which is the world’s largest biopolymer manufacturer to make bio-based ethylene which will be used as a major feedstock for making biobased polyethylene. This polyethylene will be derived from sugarcane and will be completely recyclable with lower greenhouse gas emissions.
Some companies are exploring the use of renewable energy sources, such as wind and solar, to power their ethylene production facilities. For example, TotalEnergies is planning to build a green hydrogen plant at its La Mède refinery in France, which will be used to power its ethylene production unit. INEOS is developing a new process for the production of ethylene using renewable energy sources, which it claims could reduce greenhouse gas emissions by up to 70%.
The production of ethylene is associated with environmental concerns, such as greenhouse gas emissions and other pollutants, which can lead to regulatory restrictions and challenges for industry. Ethylene is quite flammable which poses a threat to the environment. When exposed, ethylene is explosive and can cause threats to humans by making them unconscious. Several environmental rules and regulations are being implemented by several countries to put a stop to the use of ethylene-based products. Governments are outlawing the use of single-use plastics to reduce the production and use of non-recyclable plastic waste. For instance, countries like China and India have declared regulations on the usage of single use plastics. China banned the use of plastic bags which have a thickness of less than 0.025mm. In India, the rules urge plastic manufacturers to shift from a 0.04mm thickness to a 0.05mm thickness.
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