Bulletin: The Petrochemical Sector
Each week, Weber Shandwick’s APAC Intelligence Bulletin shares the key developments shaping business sectors and markets throughout the Asia Pacific region. Today, examining the latest APAC developments surrounding the petrochemical sector.
- Against global sustainability trends, petrochemical sectors expanding across Asia
- Government and brand investment split between renewables and petrochemicals
- Some petrochemicals brands looking to resolve tension with green solutions
- ‘Green Hydrogen’ being championed as a major sustainability solution for Asia
After fighting significant disruption and fluctuating demand in the initial months of the pandemic, petrochemical sectors across Asia are presently enjoying a period of growth and expansion. In the past month, firms in India, Australia, Malaysia, and China have announced new refinery construction projects or petrochemical business ventures, while petrochemicals have driven export growth in both Singapore and South Korea.
The sustainability tension
The growth of the sector is predicated on the region’s growing needs. Plastics, for example, are being relied upon to manufacture masks for the pandemic. A 2020 report from a United Kingdom not-for-profit found global plastics manufacture is expected to double over the next two decades, with US$400 billion invested in the next five years.
However, that growth is taking place against a backdrop of increasingly urgent and widespread commitments to sustainability from governments, brands, and consumers. The tension between the apparent need for petrochemical processes and genuinely sustainable business practices is fostering a complex environment for all stakeholders.
New Zealand‘s national rugby union team, for example, have recently found themselves both praised for introducing what may be the most low-impact and sustainable football jersey in global competition and criticised for signing a six-year sponsorship deal with a global petrochemicals company.
It’s a tension being experienced across Asia. India‘s government-owned national gas provider has announced plans to expand into both renewables and petrochemicals. China‘s new emissions trading scheme was launched in the same month as the country’s leading petrochemical brand being approved to manufacture carbon fibre products.
The petrochemical solution
However, many hope that the sector itself will provide the requisite sustainability solutions to resolve the conflict.
Across Asia, petrochemical firms are exploring a range of approaches to sustainability investment. One firm in Saudi Arabia has just been recognised as Company of the Year by a global research consultancy, for example, for adopting circular economy principles to boost its sustainability, plastics recycling, and resource recovery.
Elsewhere, there’s a significant focus on synthesising or altering materials to transform petrochemical processes. A firm in India has recently begun manufacturing plastic polymers from corn starch, while researchers in South Korea have discovered a particle that could dramatically increase the feasibility of renewable methanol manufacture.
One of the major priorities for the sector is the manufacture and distribution of ‘green hydrogen’ (i.e. hydrogen produced without natural gas), which many view as essential to a carbon-free economy. The governments of New Zealand, India, China, Japan, and South Korea have all recently implemented or discussed supportive green hydrogen polices.
This briefing was prepared by Weber Shandwick’s Insight & Intelligence team in Singapore.
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