AFPM proposes RON 95 as U.S. standard to cut carbon; U.S. ethane demand to increase by second quarter 2022; ACC disappointed after Washington State bans EPS for foodservice; U.S. resin production surges in April

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AFPM proposes RON 95 as U.S. standard to cut carbon

The American Fuel and Petrochemical Manufacturers (AFPM) association proposed the use of RON-95 octane as the standard for all U.S. gasoline-fueled light vehicles as the best way to quickly and inexpensively slash down the carbon footprint from car, pick-up truck and SUV driving.

The proposal involves setting a deadline “after which point all gasoline-powered vehicles sold in the U.S. would be manufactured to run on 95 RON high octane fuel, a fuel/vehicle design combination that will deliver better vehicle mileage and fewer tailpipe emissions,” it said. 

A joint analysis conducted by AFPM and USCAR (U.S. Council for Automotive Research) found that a 95 RON-octane standard would increase fuel efficiency by a much-needed 3 to 4 % for new vehicles.

“While that may sound small, it’s not,” the AFPM added in its statement issued in late May.  

RON 95 is currently significantly more expensive than lower-octane fuel but that is because relatively few vehicles use it. Prices will decline with the increase in production once the fuel becomes standard. 

“A standard could be in place well before 2030, and in year one alone, the combination of the new high-octane fuel in optimized, higher compression engines would reduce carbon emissions from light-duty cars and SUVs by 2.69 million metric tons and by 1.11 million metric tons for pick-up trucks,” according to an AFPM blog.

That reduced carbon would result in “the equivalent emissions reduction of more than 700,000 electric vehicles, but at a fraction of the cost,” it said.

Cars today are already twice as efficient as those made four decades ago and release only half the carbon, it said.

U.S. ethane demand to increase by second quarter 2022 with three new crackers

The U.S. Energy Information Administration (EIA) said on May 21 that it expects ethane demand will increase significantly by June of next year due to the anticipated startup of operations of three new ethylene plants.

“By the second quarter of 2022, we expect three new crackers, Baystar and Gulf Coast Growth Ventures in Texas and Shell Chemical Appalachia in Pennsylvania,” will increase U.S. capacity to produce ethylene by another 11% to 43.5 million tonnes/year, the EIA said.

The additions will result in U.S. ethane demand for feedstock to grow to 2.1 million barrels per day (b/d) by the fourth quarter of 2022 from 1.5 million b/d in the first quarter 2021, it said.

Ethane consumption declined in the first quarter to 1.5 million b/d because of a mid-February winter storm that interrupted operations of some petrochemical crackers along the Gulf Coast.

The EIA anticipates that international demand for U.S. ethane exports will also grow.  U.S. ethane exports began in 2014 after the construction of the first pipelines to ship to Canada. Since then exporters added three marine export terminals to ship to other regions.

“We expect ethane exports to grow more than 50%, from 300,000 b/d in the first quarter of 2021 to 460,000 b/d in the fourth quarter of 2022. We expect U.S. exports to China to grow the fastest once two large petrochemical crackers in China reach full capacity in early 2022,” the EIA said.

ACC disappointed after Washington State bans EPS for foodservice

The American Chemistry Council said on May 19 that it was a disappointment to see Washington State add provisions that will now ban the use of expandable polystyrene (EPS) in food packaging.

State lawmakers shouldn’t be “passing legislation that will increase burdens for consumers, schools, hospitals, and small businesses including family-run restaurants.”

“EPS packaging is playing a key role during the pandemic by helping protect much of our nation’s vaccine supply and keep it cool during transport” as well as to prevent food waste, the top material in landfills, it said.

“The legislation creates recycled content requirements for other foodservice packaging but inexplicably bans the sale of EPS,” the ACC said.

Several cities and states have imposed bans in recent years of single-use plastics amid growing awareness for pollution. However, the Covid-19 spread since March 2020 resulted in pauses of some plastic bans.

U.S. resin production surges in April

U.S. plastic resins production surged to eight billion pounds in April 2021, 15% higher than in the previous month as well as during the same month last year, the ACC said..

Year-to-date production was 28.4 billion pounds, a 5% on-year decrease. Texas and parts of Louisiana experienced an extreme winter weather event in mid-February that curbed output.

The ACC said that internal use of major plastic resins added to 7.3 billion pounds during April 2021, a 3.6% percent on-month increase but nearly flat from the previous year. 

Year-to-date sales were 29 billion pounds, about 4% less than in the same period in 2020.

By Reuters Events Downstream