Idemitsu Kosan Co. Ltd. et Mitsui Chemicals Inc. are exploring features to consolidate 50-50 ethylene production operations at two Chiba Chemicals Manufacturing LLP (CCM) joint venture sites at the parent companies’ separate production complexes in Ichihara, Chiba, Japan. .
Still in the early stages and subject to a formal feasibility study, the proposed consolidation would take effect in fiscal 2027 and would involve the closure of a 370,000 tonne/yr (tpa) ethylene unit located at Idemitsu Kosan’s 190,000 bpd incorporated refining and refining plant. petrochemical complex, the partners said in late March.
The corporations said they will continue to jointly operate the 550,000 tpa ethylene production unit at Mitsui Chemicals’ Ichihara production under the existing CCM partnership, a new joint venture (JV) or some other yet-to-be-identified arrangement.
The partners’ decision to compare the proposed rationalization program comes against the backdrop of increased pressure from the start-up of larger and new petrochemical complexes, mainly in China, which is forcing Japanese ethylene complexes to operate at lower rates, as well as declining domestic demand for ethylene. the companies have declared.
The proposed rationalisation has also taken into account strong calls for operators to step up their efforts to build next-generation shopping complexes aimed at reducing carbon dioxide (CO2) emissions and selling circular resources, in line with the global effort to achieve carbon-neutral societies. plan, the Japanese partners said.
The companies said any long-term strategy for the partnership would come with paints to build sustainability, expand low-carbon offerings and create opportunities for circular resource use, in line with the goal of net-zero emissions by 2050.
“As a feedstock in the consolidated ethylene plant, we will move away from traditional fossil-based naphtha in favor of bionaphtha generated as a byproduct of our sustainable aviation fuel (SAF) business, as well as naphtha derived from the chemical recycling of used plastic at a facility scheduled to be commissioned in fiscal year 2025,” said Shunichi Kito, President and CEO of Idemitsu Kosan.
“Along with those efforts, we aim to build a new source chain of green chemicals that also includes bioethylene produced from bioethanol (which is used as a feedstock for SAF) and chemicals made from e-methanol,” says Kito.
CCM’s proposed consolidation would also go “beyond publishing competitiveness by optimizing production at [Mitsui Chemicals’] Chiba Ethylene Complex,” said Osamu Hashimoto, the company’s president and chief executive officer.
“Continued regional cooperation and expanded partnerships with other corporations will constitute a step towards the transformation of the trade complex based on the dual technique of increased competitiveness and a shift towards green chemicals,” Hashimoto said.
According to Hashimoto, Mitsui Chemicals would seize the opportunity to expand “the progression of a competitive and sustainable green chemicals business by creating added pricing through transfer to green chemicals and relentless efforts to increase capital efficiency. “
While the partners demonstrated that a final resolution and timeline for the CCM consolidation task would be made after the final touch of the feasibility study, the corporations revealed a more explicit timeline for when this would occur.
Idemitsu Kosan made the final investment decision (FID) in April 2023 to build the proposed petroleum-based chemical recycling plant, which will process 20,000 tonnes of used plastics, at a complex adjacent to the Chiba operator, the company said.
Operated through Chemical Recycle Japan Co. Ltd. , a joint venture of Idemitsu Kosan and Kankyo Energy Co. Ltd. , the plant will use its own state-of-the-art generation to turn used plastics into a base oil that Idemitsu can then process in its existing facilities. Chiba’s chemical and refining assemblies are replacing traditional feedstocks to produce renewable chemicals as feedstock for plastics manufacturers.
On track to become operational in 2025, Idemitsu Kosan said the plastics recycling plant is part of its quest to achieve net-zero emissions by 2050 to help reduce CO2 emissions from more than four million tpa of hard-to-recycle used plastics in Japan that are thermally incinerated. recycling. .
Following the commissioning of the Chiba plant, Idemitsu Kosan announced plans to establish plants at the company’s other Japanese refineries, as well as expand a larger-scale business aimed at recycling hard-to-recycle plastics across the country.