AFPM opposes EPA´s proposed rules related to pyrolysis oil; Surface Transportation Board proposes reforms for rail shipping; Methanol market seen increasing just over 4% annually until 2028
138 views
AFPM opposes EPA´s proposed rules related to pyrolysis oil
The American Fuel & Petrochemical Manufacturers (AFPM) filed comments opposing the U.S. Environmental Protection Agency (EPA)´s “proposed rules to identify and regulate new uses for components of pyrolysis oil,” according to a press release issued on Sep. 8, 2023.
According to the EPA website, the agency has in 2023 issued “proposed rules under the Toxic Substances Control Act (TSCA) for 18 chemicals made from plastic waste-derived feedstocks that would ensure they are free from unsafe contaminants before they can be used to make transportation fuels,” as published on June 15, 2023.
“These proposals will drag our country behind as the rest of the world works toward plastic circularity,” the Sept. 8, AFPM statement said.
“Pyrolysis oil allows petrochemical manufacturers and recyclers to reduce the need for virgin petroleum-based feedstocks. Our industries cannot reap the benefits of advanced recycling without being able to take advantage of the substance’s broad uses, especially as a feedstock to make building blocks for new plastics,” the AFPM said.
“The proposals fail to meet several requirements set by the Toxic Substances Control Act (TSCA),” the AFPM added.
Some of the biggest petrochemical companies have done work to advance technology related to feeding pyrolysis oil from waste plastic to crackers.
Surface Transportation Board (STB) proposes “reciprocal switching” reforms for rail
The Surface Transportation Board (STB), a U.S. federal agency that oversees some modes of transportation including rail, a very important component of the supply chain for petrochemicals, on Sept. 7 issued a proposal for reforms to rail reciprocal switching rules. It was well received by petrochemical companies as some progress, but still with limitations, while railroad companies are reviewing the proposal.
“In today’s decision, the STB proposes to allow a shipper to obtain reciprocal switching when its current railroad fails to meet specified service performance standards,” the American Chemistry Council (ACC) said in a release that followed the STB announcement.
The ACC is an organization that includes the biggest petrochemical companies operating in the country. They are also some of the biggest customers of rail companies.
“Competitive pricing and reliable service are no longer the norm as the country continues to pay a heavy price for the railroad industry’s growing monopoly power. Service failures have contributed to higher prices and supply chain disruptions (…),” the ACC said.
More than three-quarters of companies said access to reciprocal switching (77%) would help mitigate freight rail problems, according to a supply chain survey conducted earlier this year, the ACC said.
75% of U.S. refineries, petrochemical plants captive of rail shipper: AFPM
For most U.S. refineries and petrochemical plants there is only one rail shipping provider option so any move toward increasing competitiveness, such as “reciprocal switching,” would help, said Rob Benedict, vicepresident of petrochemicals and midstream at the AFPM (Association of Fuel and Petrochemical Manufacturers).
Benedict made the comment following the proposal from the U.S. Surface Transportation Board for “reciprocal switching” within the U.S. freight rail system. Railcars are key for the transportation of petrochemicals, from fuels to chemical intermediates, and from fertilizer to plastic resin pellets.
According to the AFPM´s vice president Benedict, the proposal is “a good start with potential to make the rail system more efficient and responsive.”
However, it would limit reciprocal switching to captive shippers who experience service failures instead of making it available broadly to promote competition industry-wide, he added.
“After years of advocating for more competition in freight rail, we welcome this progress (…),” Benedict said.
The chemical industry has long demanded better rail service and prices.
Railroad companies reviewing proposed changes
“The withdrawal of the ill-conceived 2016 forced switching proposal is a positive development, as the extensive record developed by this Board on that proposal clearly demonstrated that it was both unwise and unworkable,” said the AAR (Association of American Railroads) president and CEO Ian Jefferies, referring to the STB.
“In its place, the Board has proposed a new, service-based approach, which AAR is reviewing to understand its scope and possible impact on rail service and network fluidity,” he said.
“Any switching regulation must avoid upending the fundamental economics and operations of an industry critical to the national economy, that Congress saved once by partially deregulating, and be subject to the highest level of scrutiny. AAR looks forward to engaging with the Board on this important matter,” Jefferies said.
AAR members include the major freight railroads of the U.S., Canada and Mexico, as well as Amtrak (U.S.-rail related passenger traffic).
Railroad companies have defendend their pricing policies and said revenue is needed to maintain and improve tracks. In the past the rail industry has countered to criticism on pricing from chemical industry by pointing to the chemical industry’s own pricing.
Methanol market seen increasing just over 4% annually over next four years
According to projections by MarketsandMarkets released in a Sep. 11 press release, the global methanol market would increase from $309 billion in 2023 to $380 billion by 2028, or about 4.2% annually during that period.
“The availability of methanol refueling infrastructure, government fuel standards and regulations, and laws governing emissions all have an effect on the demand for methanol in automotive applications,” it said.
Methanol is more and more in demand from the building and automobile industries, the report said. In addition, both biodiesel and MTBE, a gasoline additive, are both produced using methanol.
Methanol is used to make the chemical formaldehyde, which is in turn used to make a variety of building and other materials including adhesives.
Canada´s Methanex Corp. is the biggest methanol producer market and has operations also in Chile, Egypt, New Zealand, Trinidad, and the U.S.
Other global participants include HELM Proman Methanol AG, SABIC, and China-based Yankuang Energy.
Methanol has also been seen starting to gain ground in ocean shipping.
By Reuters Events Downstream
