"Preparing the industry to seize the opportunity is crucial. Just as the US experienced stages during the shale boom, Argentina must follow similar steps."

Gabriel Rodríguez Garrido

EXECUTIVE DIRECTOR, INSTITUTO PETROQUÍMICO ARGENTINO (IPA)

September 27, 2024

What are the main areas in which IPA is working to improve the future of the Argentinian petrochemical industry?

One key element is our annual statistical yearbook, which gathers information for those companies willing to invest, academic researchers, and policymakers, ensuring they are up to date with the latest developments in the Argentinian petrochemical industry. 

The second key element is education. At IPA, we partnered with two institutions: Universidad Austral, offering a diploma in the petrochemical business, now in its fifth consecutive year; and with Plapiqui, a research institute between CONICET and UNS, to provide technical programs. Every year, more companies join these asynchronous and digitalized courses, which enhance their technical and executive skills.

The third element is outreach. We organize annual conferences, and our latest one was held on June 4, 2024, during Argenplans. It attracted over 300 attendees and focused on the theme “Argentinian Petrochemicals Facing a New Opportunity: The Path to Sustainable Development”.

I think we are at a turning point for Argentina, as the country faces a unique opportunity. The development of LNG, especially the liquids associated with gas, like ethane, propane, and butane, a mix of hydrocarbons and virgin naphtha, all serve as raw materials for petrochemicals.

What steps must Argentina take to seize the opportunity in the oil and gas sector?

With its 80-year history, the Argentinian petrochemical industry stands out due to its extensive know-how. However, preparing the industry to seize the opportunity is crucial. Just as the US experienced stages during the shale boom, Argentina must follow similar steps. Naturally, oil and gas come first due to production needs, exports, and foreign currency generation. Besides, oil is more straightforward to manage since it is a liquid that can be transported by truck and pipelines. Gas, however, requires more infrastructure, such as pipelines, liquefaction, and export facilities, which progress more slowly and demand significant investments. 

In this value chain, petrochemicals represent the final link; however, they offer substantial value addition. For instance, converting methane into urea doubles or triples the value of gas. Similarly, exporting ethane as a polymer PP or PE - increased its value six times compared to exporting it as raw ethane. The heart of the matter is that the industry must first establish the necessary groundwork to achieve this.

What role does IPA play in promoting sustainability within the industry?

Whether implementing renewable energy solutions or advancing carbon capture technologies, the goal is to create a sustainable and environmentally friendly industry. This requires a collective effort from the industry, working together towards the same goal. We work as a driving force, bringing together different stakeholders to work on these projects and fostering collaboration. 

The industry is eager to move towards circularity, but incentives are necessary to encourage investments in this direction. The recycling rate is just 12%, despite the vast amount of available circular resources. To address this, we have collaborated with various industry chambers to create EURECA, an initiative focused on the circular economy of plastics and sustainable growth, aiming to raise social awareness and work closely with policymakers.

Why is the partnership with waste managers like Benito Roggio Ambiental essential for circular feedstock projects?

The global, regional, and local petrochemical industry faces two significant challenges. The first is achieving a circular economy for plastics, as 50% of petrochemicals are plastic polymers. The second is reducing emissions, with a trend towards net zero. Post-consumer plastic (PCR) recycling can be mechanical or chemical. Mechanical recycling has technical limitations, such as color and multilayer materials, which hinder the amount of plastics that can be recycled.

On the other hand, chemical recycling, with technologies like pyrolysis, breaks down plastic into virgin resin by cutting the polymer chains. We can produce all the plastics we want, but they must be recycled back into raw materials. By 2050, 50% of plastics are expected to come from circular resources. While this may seem low, it is essential to consider that plastic consumption will increase due to improvements in modern living and population growth.

We have partnered with Benito Roggio Ambiental, Argentina’s largest waste manager. We realized the importance of involving waste collectors in this conversation around circularity because we are not waste specialists. The major problem for circularity is obtaining raw materials in sufficient quantity and quality to run a continuous operation.

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