Demand for petrochemicals is surging and will continue to grow
Already a major component of the global energy system, the importance of petrochemicals is continuing to grow. Demand for plastics – the most familiar group of petrochemical products – has outpaced that of all other bulk materials (such as steel, aluminium or cement), and has nearly doubled since 2000. Advanced economies, such as the United States and Europe, currently use up to 20 times as much plastic and up to 10 times as much fertiliser as developing economies such as India and Indonesia, on a per capita basis. This underscores huge potential for growth worldwide.
Developing economies lead growth
Although substantial increases in recycling and efforts to curb single-use plastics are expected to take place, especially in Europe, Japan and Korea, these efforts will be far outweighed by developing economies sharply increasing their shares of plastic consumption (as well as its disposal).
The difficulty in finding alternatives to petrochemical products for many applications is another factor underpinning the robust overall demand growth.
Petrochemicals are rapidly becoming the largest driver of global oil demand
The growth in demand for petrochemical products means that petrochemicals are set to account for over a third of the growth in oil demand to 2030, and nearly half to 2050, ahead of trucks, aviation and shipping. Petrochemicals are also poised to consume an additional 56 billion cubic metres of natural gas by 2030, equivalent to about half of Canada’s total gas consumption today.
New dynamics in oil and gas are driving global competition
After two decades of stagnation and decline, the United States has returned to prominence as a low-cost region for chemical production thanks to the shale gas revolution. Today, the United States is home to around 40% of the global ethane-based petrochemical production capacity. However, the Middle East remains the low cost champion for key petrochemicals.
Full report is available on the IEA website
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