What are the main priorities of the chamber in 2021 and the main concerns of your members?

There is a considerable challenge regarding Mercosur as it shows a deficit of chemicals in the international trade balance. For the Argentinian chemical industry, Brazil is the target market as Argentina is markedly competitive in petrochemicals, performance chemicals and fertilizers, as well as raw materials for agrochemicals. Argentina is trying to implement a smart and coordinated balance reduction, that is, an agreement with other countries and conglomerates so that final commodities suffer less due to the reduction. Other challenges are minimizing the impact of the pandemic, the climate change and sustainability of plastics.

To what extent do you think political factors have impacted the sector?

The Argentinian Government was always focused first on the pandemic and then on the economy, consequently, there were various restrictions. The chemicals and petrochemicals sectors were declared essential, so staff working in these sectors did not suffer any mobility restrictions as we were able to demonstrate that the related continuous processes could not undergo any alterations, and that pausing the production of mass consumption chemical products was not plausible.

How have low natural gas prices impacted Vaca Muerta?

In 2019 and the beginning of 2020 there was a lot of well drilling and development at Vaca Muerta, then, due to the pandemic, in 2020 there were not as many people available to work there. Furthermore, imports slowed down, which led to a downfall in oil and gas production and consumption. However, things are looking up. The Vaca Muerta oil is non-conventional and light, therefore, the biggest refinery has been investing money to mix that oil with heavier types of oil. In terms of gas, the Argentinian Government has launched a 4-year program called Plan Gas, so that gas prices stay at US$3.50 on average, which is why the drilling and fracking costs are accessible. In the US the price is between US$2.50 and US$3.

What are the key themes you see impact Argentina’s the chemical industry in the medium term?

The Chamber has made recommendations as to what Argentina can do to make progress in terms of petrochemicals as we do not believe petrochemistry should grow based on raw materials produced in refineries, and oil producers are concerned since they have to redesign their business due to decarbonization. What alternatives are there? As gas prices are competitive and can be kept at US$3.50, and analyzing the existing trade balance, there are opportunities to monetize the Vaca Muerta gas. Given that Brazil is the world’s biggest urea importer and Argentina has a world-class urea plant, there is a possibility to double its production facilities.

Ethane content in non-conventional gas is two times higher compared to conventional gas, and there is an opportunity there to monetize ethane to produce ethylene derivatives – mainly PE.
LPG is commonly used in Argentina which means more propane and butane will be produced. The excess of propane could be used in a dehydrogenation plant to produce polypropylene. The content of LPG in non-conventional gas is also significantly higher compared to conventional gas. Argentina always had an excess of LPG that is exported during the year, so more available LPG could generate an extra flow of propane that could be used in a dehydrogenation plant to produce polypropylene.

Can you give us examples of the different ways in which the Argentinian chemical sector is incorporating sustainability into its processes and products?

The Argentinian Government and our Chamber have been helping domestic companies set international energy efficiency standards. Another aspect we have been focusing on is environmental responsibilities to manage chemicals, losses and transportation according to international standards. The Government is working on a law related to chemical products management in terms of chemicals inventory following the Canadian format. Moreover, there is a government commitment through a law approved in Congress for renewable energy to be 20% of all energy and there has been significant investment in wind and solar energy. Among the main challenges are: upcoming laws related to the circular economy, specifically plastic waste management, single use plastics; climate change and reducing greenhouse gas emissions.