Celtic Renewables: Middle East turmoil is a wake-up call for the chemicals industry

Iran’s closure of the Hormuz Strait in early March in response to military strikes by the US and Israel has choked off global oil and gas supplies. The closure has sent energy prices spiralling worldwide and threatens a longer-term global energy crisis and a worldwide economic downturn.

But it’s not just the energy sector that is feeling the serious effects of this supply disruption. The chemical industry depends on fossil fuels as feedstocks for producing essential chemicals for everyday life.

Commenting on the matter, Bettina Brierley, Chief Commercial Officer at Celtic Renewables, said: “Much of the attention on the Hormuz Strait closure focuses on the effect on energy prices. But the chemical industry is also a huge consumer of petrochemicals derived from oil and gas. Manufacturers and consumer goods firms depend on hydrocarbons and solvents that are derived from fossil fuels. Solvents like acetone and butanol are used to manufacture thousands of products that each of us use every day - everything from cosmetics and household cleaning products to plastics, medicines and other pharmaceuticals.”

The situation in the Hormuz Strait is the second fossil fuel supply shock that the world has suffered in four years, following Russia’s invasion of Ukraine in 2022. It once again exposes how vulnerable countries and industries are to disruptions in supplies of fossil fuels caused by geopolitical events and regional instability.

Brierley explained: “Since the start of the hostilities at the end of February, the price of fossil-derived chemicals has soared. Butanol has doubled in price. Acetone has quadrupled. Manufacturers pass on these higher costs to consumers in the form of higher prices for finished products. When the current crisis comes to an end, chemical producers and manufacturers have a choice. They can revert back to 'business as usual' and continue their dependency on fossil fuels – that is, until the next crisis occurs. Or they can start the process now of ending their fossil fuel addiction and switch over to sustainable bio-based alternatives instead. We should remember that the shift to fossil-derived chemicals occurred less than 80 years ago, during the 1950s. Before that, it was standard practice for manufacturers to use alternative materials for their feedstocks. Processes like fermentation converts materials containing sugar, starch or other simple or complex carbohydrates into solvents."

Celtic Renewables uses ABE fermentation at its biorefinery in Grangemouth near Falkirk in Scotland to transform locally sourced waste materials from the food and drink industry – including whisky pot ale from nearby distilleries and rejected potatoes from farms – to produce bio-acetone and bio-butanol.

Brierley said: “Geopolitical events like the current conflict and before that Russia’s invasion of Ukraine in 2022, disrupt oil and gas availability. These sudden shocks have long-term repercussions on supply chains and industrial processes. These events should give chemical firms and manufacturers pause to rethink their reliance on fossil fuels, not only as a power source but equally importantly as a feedstock for their production processes. The other important factor in this decision is increasing regulation to cut both direct and indirect CO₂ emissions from industry supply chains. National governments and international organisations are pressing companies to defossilise their operations. This also includes the removal of oil and gas-derived ingredients from their products. Low-carbon chemical production is another part of the green transition in which the UK is already an innovator and a leader. Ending our reliance on fossil fuels – whether it’s for essential chemicals or energy - is no longer solely about cutting emissions and conserving the environment. It’s also a route to strengthening the UK’s own chemical manufacturing capabilities and its economic resilience to unexpected external events. Recent events have shown that countries and businesses are dependent on vulnerable long-distance supply chains for essential materials such as chemicals. The switch to producing bio-based chemicals here at home provides multiple benefits. It removes our dependence upon lengthy supply chains that are open to disruption: it keeps jobs here in the UK: and it provides a boost to both regional economies and the national economy. Making the switch from oil and gas-derived chemicals to bio-based alternatives is an essential part of the wider movement to a more sustainable, more resilient, low-carbon, fossil-free economy and way of life.”

Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/07072026/celtic-renewables-middle-east-turmoil-is-a-wake-up-call-for-the-chemicals-industry/