January 2010

Acetic Anhydride
Activated Carbon
Biodegradable Polymers
Carbon Fibers
Formaldehyde
Phosgene
Polyurethane Elastomers
Sodium Cyanide
Wet-Process Phosphoric Acid
Advanced Carbon Capture
Carbon Dioxide Compression
Coal to Gasoline
Higher Alcohols from Syngas, Technology Survey
Natural Gas Recovery from Methane Hydrates via Depressurization
Polyethylene Production by a Solution Process Using Loop Polymerization Reactors
Polysilicon for Solar Wafers
Propylene Oxide by the BASF-Dow HPPO Process
Thermochemical Cellulosic Ethanol
Adhesives and Sealants
Specialty Films
CEH Reports and Product Reviews in Preparation
PEP Reports Scheduled for 2010
SCUP Reports Scheduled for 2010

CEH Marketing Research Report Abstract
ACETIC ANHYDRIDE
By Michael P. Malveda with Chiyo Funada

In 2009, the United States continued to be the leading producer and consumer of acetic anhydride, mainly for cellulose acetate production. Since 2007, U.S. consumption of acetic anhydride has been steadily declining as a result of lower domestic production of cellulose acetate flake. Flake production has dropped as a result of lower foreign demand, primarily from China, and flat or declining growth for use in cigarette filter tow. This has resulted in decreasing acetic anhydride consumption for cellulose acetate flake production. Similarly, in Western Europe, acetic anhydride consumption has been declining since 2007 because of declining cellulose acetate flake production for exports to China, for cigarette tow use, and as a result of the effects of the economic downturn. In Japan, production and consumption have both experienced significant declines resulting from the economy and plant maintenance issues. In contrast, China’s acetic anhydride production and consumption have both increased significantly in recent years mainly because of expanded local production capacity for acetic anhydride and cellulose acetate flake.

The following pie chart shows world consumption of acetic anhydride:

Cellulose acetate flake is the major consumer of acetic anhydride and will continue to be so in the coming years. Cellulose acetates are used in mature markets and declines have occurred in recent years, with the exceptions of such major regions as China and Central and Eastern Europe. In the past, China imported very large quantities of cellulose acetate from the United States and Europe. However, with the recent addition of cellulose acetate capacity in China, imports have been decreasing and are expected to continue to do so with more local capacity being built in the next few years. Acetic anhydride capacity in China has grown significantly as a result.

Acetic anhydride use for pharmaceuticals has also grown in recent years, particularly in China and Other Asia where industry production has increased. TAED use is significant in Europe. Other uses for acetic anhydride including polymers/resins, dyes, flavors and fragrances, etc. account for the remainder of consumption.

In China, consumption growth is expected as more cellulose acetate flake and acetic anhydride capacity come on stream. The country will also experience growth for other uses including flavors and fragrances, dyes, sweeteners, TAED and PTMEG.

Other Asia is expected to have strong growth of about 5–6% annually for acetic anhydride consumption. The main driver will be the pharmaceutical industry as more producers start up in the region, such as in India. There will also be increased use in the dyes and pigments industry. The number of smokers in China, India, and Central and Eastern Europe is increasing, leading to higher cellulose acetate flake demand and driving acetic anhydride use.

Overall, global acetic anhydride consumption is expected to grow about 1–2% annually during 2009–2014. Limited growth in the cellulose acetates market and mature uses in other sectors will account for this growth.

(For the complete marketing research report on ACETIC ANHYDRIDE, visit this report’s home page or see p. 603.5000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
ACTIVATED CARBON
By Elvira O. Camara Greiner with Thomas Kälin and Yoshio Inoguchi

Activated carbon is an amorphous form of elemental carbon prepared by destructive distillation of any one of a variety of carbonaceous raw materials, including wood, coal or coconut shells. It is used as a substrate primarily to selectively adsorb gases, vapors or colloidal solids from liquids or gases. The most significant physical characteristic of activated carbon is the enormous surface area of the internal pore structure developed during its preparation. Total surface areas for activated carbons commonly range from 450 square meters per gram to 1,800 square meters per gram.The principal commercial product forms of activated carbon are granular, powdered, extruded and fibers.

The following pie chart shows world consumption of activated carbon:

In March 2005, the U.S. Environmental Protection Agency (EPA) issued a federal rule to permanently reduce mercury emissions from coal-fired power plants (Clean Air Mercury Rule). In February 2008, the CAMR was overturned and sent back to the EPA to be rewritten. As of fourth-quarter 2009, a deadline of November 2011 was established for the EPA to finalize the new federal mercury regulation. It is believed that a federal regulation, assuming the November 2011 deadline is met, would require compliance by 2014.

Some sources believe U.S. powdered activated carbon (PAC) consumption for mercury removal could be significantly higher than 420 thousand metric tons in 2014 if other mercury regulations are enacted on coal-fired processes other than utilities. Since the regulation also addresses the 189 hazardous air pollutants (HAPs), this could lead to additional market demand for activated carbon.

In 2008 and into 2009, activated carbon prices increased significantly—tight supply (driven by strong demand), high operating rates, low inventory levels, tight and high-priced supplies of foreign material, and high energy costs contributed to higher prices. Major players were ramping up to supply the mercury market (mercury removal from coal flue gas) and they continue to do so. Throughout most of 2009, prices held steady.

Arsenic levels continue to be an important factor in the PAC business, so PAC customers are increasingly becoming more interested in comparing carbons on a performance basis rather than just a price-per-pound basis.

The activated carbon business will continue to be driven by environmental regulations, principally water and air purification, especially in the mature and more industrialized areas of the world. In the next five years, environmental issues will likely become the predominant force in the markets of rapidly developing countries.

Overall, the estimated global average annual growth rate for activated carbon will be over 10% through 2014, driven by U.S. consumption—assuming federal regulations require compliance by U.S. coal-fired utilities to cut mercury emissions by 2014.

(For the complete marketing research report on ACTIVATED CARBON, visit this report’s home page or see p. 731.2000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
BIODEGRADABLE POLYMERS
By Michael P. Malveda with Uwe Löchner and Kazuteru Yokose

In 2009, demand for biodegradable polymers in North America, Europe and Asia accounted for most of the global consumption. Despite the economic crisis, which hit the chemical and plastics industry, the market for biodegradable polymers did grow in 2009 in almost all regions. In Europe, the largest global market, growth was in the range of 5–10% (depending on products and applications, compared with 2008). Total consumption of biodegradable polymers in these three regions is forecast to grow at an average annual rate of nearly 13% over the five-year period from 2009 to 2014. The food packaging, dishes and cutlery market is the single largest end use and will be the major growth driver in the future.

The following pie chart shows world consumption of biodegradable polymers:

Europe continues to be the largest biodegradable polymers consuming region, with about half of the global total. Major market drivers for biodegradable polymers in this region include legislation, depleting landfill capacities, pressure from retailers, growing consumer interest in sustainable plastic solutions, fossil oil and gas independence, and the reduction of greenhouse gas emissions.

North American consumption of biodegradable polymers has grown significantly in recent years. The following factors have contributed to and will continue to contribute to growth: biodegradable polymers have become more cost-competitive with petroleum-based products; there has been growing support at the local, state and federal levels for these products and for addressing needs about solid waste disposal; there is increasing public awareness regarding the depletion of petroleum-based raw materials; large retailers and manufacturing companies desire to develop more sustainable raw material sources as well as to impact global warming; and the properties and processing of biodegradable polymers have improved.

In Japan, there has been some growth in biodegradable polymers use as a result of government and industry promoting their use. The rising prices for petroleum and petroleum-based products have also contributed to the replacement of petroleum-based polymers with biodegradable polymers. However, Japanese consumption of biodegradable polymers has not increased as much as expected. In Other Asian countries, biodegradable polymer demand is expected to increase greatly in the next several years. In China, high growth will be due to several factors: an increase in production capacity, demand for environmentally friendly products, and the government’s plastic waste control legislation.

Use of biodegradable polymers has continued to grow, even though some of their other benefits are viewed as of more longer-term interest. Their greatest impact may be in the future, when infrastructures and systems have improved. For example, in the United States, it is expected that when there is a large volume of compostable products (driven by their low carbon footprint), then it will make economic and environmental sense to compost and recycle more. In Europe, however, Western European countries have large-scale composting facilities already in place and are composting several million metric tons of source-separated organic waste.

For biodegradable materials, it is generally regarded that the product will degrade into water and carbon dioxide by virtue of a naturally occurring organism, such as microorganisms. Some industry sources have offered the term compostable in place of biodegradable. To be considered compostable, three criteria must be met: biodegradation—it has to break down into carbon dioxide, water and biomass at the same rate as cellulose; disintegration—the plastic must become indistinguishable in the compost; and nontoxicity. Most international standards (such as ISO 17088) require at least a 60% biodegradation of a product within 180 days, along with other factors, in order to be called compostable.

Biodegradable polymers are part of the larger biopolymers market. The industry defines biopolymers, or bioplastics, as polymers that are either bio-based or biodegradable (some materials like NatureWorks’ Ingeo™ PLA are both). Some bio-based products are not necessarily biodegradable (e.g., polyethylene based on ethanol), while some biodegradable products are actually made from petroleum-based products (e.g., polycaprolactone).

The issue between bio-based and biodegradable materials has continued to attract attention worldwide. In Japan, the idea of bio-based renewability is becoming more important relative to biodegradable materials. In the United States and Europe, industry sources comment that the idea of bio-based or “where it comes from” versus biodegradable, or “where it goes” is currently driving or will drive the overall biopolymers market in the future. Bio-based products have gained support as a result of the current focus on climate change and the low carbon footprint that results, as well as legislation (at the national and international levels), cap and trade issues, etc. The USDA has even set up a bio-preferred program that promotes consumer use of bio-based products through labels identifying bio-based content.

(For the complete marketing research report on BIODEGRADABLE POLYMERS, visit this report’s home page or see p. 580.0280 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
CARBON FIBERS
By Sebastian N. Bizzari with Thomas Kälin and Kazuteru Yokose

Carbon fibers are noted for their high strength and stiffness, light weight, good fatigue resistance, good electrical conductivity, chemical inertness and low coefficient of thermal expansion. Carbon fibers are used primarily as reinforcing agents in high performance composites with synthetic resin matrices such as epoxies, polyimides, vinyl esters, phenolics and certain thermoplastics. Small quantities of carbon fiber are consumed in composites with carbon matrices; in addition, developmental work is being performed with metal, ceramic and glass matrices. The carbon fiber serves to provide the strength and stiffness of the composite, while the matrix material maintains fiber alignment and transfers structural load among the fibers. Compared with conventional construction materials such as aluminum or steel, carbon fiber composites have some highly desirable properties. Structural members made from these composites can be designed to have twice the strength and more than twice the fatigue resistance of steel; also, they can be twice as stiff as aluminum at half the weight.

Global carbon fiber capacity utilization decreased in 2009 as a result of increased capacity and weak demand caused by the global recession. Between 2006 and 2009, world capacity for carbon fibers grew at an average annual rate of approximately 19%, greatly outpacing world consumption, which grew at an average annual rate of approximately 5% during the same period. Although world demand increased during 2006–2007, it weakened considerably during 2008–2009 in most regions, wiping out substantial volume gains since 2006.

The following pie chart shows world consumption of carbon fibers:

Major advances in technology and processing have dramatically expanded the demand for high-performance carbon fibers. The introduction of higher-volume and lower-cost fibers and gains in productivity have reduced the manufacturing costs of carbon fibers. Since cost is a major factor affecting demand, continued improvements in performance coupled with increased availability are expected to boost consumption in all regions and applications. Industrial applications will remain the largest world market, helped by significant growth in markets such as wind turbine blades and pressure vessels. World demand in aircraft/aerospace applications is forecast to surpass sporting goods/recreation to become the second-largest market for carbon fibers by 2014.

Europe, North America and Asia are the largest markets for carbon fibers, accounting for nearly 100% of world consumption in 2009. Asia is expected to surpass North America by 2014 as the second-largest market. China has become the single largest consumer of carbon fibers in sporting goods/recreation; it is expected to further strengthen this position, increasing its global share from approximately 55% in 2009 to 65% by 2014. Other markets such as industrial and aircraft/aerospace are also expected to grow significantly in China.

World consumption is forecast to grow at an average annual rate of 11.6% during 2009–2014. Demand growth in aircraft/aerospace markets is expected to be significant, especially during 2010–2013, as deliveries of large commercial aircraft such as the Boeing 787 and Airbus 380 ramp up. Demand for carbon fibers is expected to start recovering in 2010; however, the speed and timing of a recovery are still uncertain.

(For the complete marketing research report on CARBON FIBERS, visit this report’s home page or see p. 542.4000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
FORMALDEHYDE
By Sebastian N. Bizzari

Formaldehyde is the most commercially important aldehyde. Urea-, phenol- and melamine-formaldehyde resins (UF, PF and MF resins) accounted for approximately 63% of world demand in 2009; other large applications include polyacetal resins, pentaerythritol, methylenebis(4-phenyl isocyanate) (MDI), 1,4-butanediol (BDO) and hexamethylenetetramine (HMTA). Most formaldehyde producers are concerned primarily with satisfying captive requirements for derivatives and/or supplying local merchant sales. Formaldehyde is usually produced close to the point of consumption since it is fairly easy to make, is costly to transport and can develop problems associated with stability during transport. As a result, world trade in formaldehyde is minimal and accounted for only 1% of production in 2009.

The following pie chart shows world consumption of formaldehyde:

Construction/remodeling activity, vehicle and furniture production, and original equipment manufacture (OEM) account for most world consumption of formaldehyde. Demand for these markets is greatly influenced by general economic conditions. As a result, demand for formaldehyde largely follows the patterns of the leading world economies. Formaldehyde resins are used predominantly in the wood products industry as adhesives. Growth of these resins is strongly correlated to construction/remodeling activity, which accounts for over 50% of consumption, and to a lesser degree, the automotive industry.

World consumption is forecast to grow at an average annual rate of 4.0% during 2009–2014. Continuing significant-to-rapid demand growth in Asia, mainly China, for most applications will balance out moderate growth in North America, Western Europe, Africa and Oceania. Central and South America, the Middle East, and Central and Eastern Europe are forecast to experience significant growth in formaldehyde demand during 2009–2014, largely as a result of increased production of wood panels, laminates, MDI and pentaerythritol.

Wood products have already been substituted, mainly by other wood products in construction, remodeling and furniture production. World demand for formaldehyde in wood resins is forecast to remain strong (world consumption of UF, PF and MF resins is forecast to grow at an average annual rate of just over 4% during 2009–2014) as solid wood has been replaced by manufactured wood-based panels. Overall, formaldehyde is not at risk for large-scale substitution by competing products.

(For the complete marketing research report on FORMALDEHYDE, visit this report’s home page or see p. 658.5000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
PHOSGENE
By Syed Q. A. Rizvi

The United States, Western Europe, and Asia are currently the major producing and consuming regions for phosgene, which they captively consume to manufacture p,p´ -methylene diphenyl diisocyanate (MDI), toluene diisocyanate (TDI), and polycarbonate resins.

Phosgene is currently used to produce isocyanates (MDI, TDI, and other aliphatic, cycloaliphatic, and aromatic isocyanates), polycarbonates, acid chlorides, chloroformates, chlorocarbamates, and organic carbonates. Globally, approximately 75% of phosgene is consumed for isocyanates, 20% for polycarbonates, and about 5% for other fine chemicals. Fine chemical applications are further broken down into 50% for intermediates, 25% for agrochemicals, 20% for pharmaceuticals, and 5% for monomers and coloring agents.

The following pie chart shows world consumption of phosgene:

Since phosgene is generated in the plant in which it is consumed, phosgene is linked to the MDI, TDI, and polycarbonate resin–producing industries. Key findings and future implications for the phosgene market include the following:

• The TDI, MDI, and polycarbonate markets are expanding in or shifting to China and other Asian countries.
• Toxicity concerns about phosgene have driven some consuming industries to find alternative technologies.
• Changes in the manufacturing processes for polycarbonate resins to phosgene-free technology have moderated the growth potential in this application.
• Companies are beginning to emerge that specialize in phosgenation technology, i.e., phosgene production and phosgene reactions, and phosgene derivatives.

Growth in phosgene consumption will be greatest in China and the Middle East, with major capacity expansions for all three main derivatives—MDI, TDI, and polycarbonates.

(For the complete marketing research report on PHOSGENE, visit this report’s home page or see p. 687.1000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
POLYURETHANE ELASTOMERS
By Henry Chinn with Uwe Löchner and Takashi Kumamota

The United States, Western Europe, China and Other Asia are currently the major producing and consuming regions for polyurethane (PU) elastomers.

The global markets for polyurethane elastomers have been greatly affected by the economic crisis during 2008/2009; consumption declines have been greatest for the United States, Canada and Europe. All sectors and major end-use markets experienced strong declines in PU elastomer demand in this period. Significant demand recovery is not expected in the United States, Canada and Europe before 2012–2014, depending on the different applications.

The PU elastomers market is dominated largely by the major suppliers of raw materials and prepolymers. Bayer is the global PU elastomers leader and produces or supplies all product types except millable gums in each of the three major regions (United States, Western Europe and Asia).

The following pie chart shows world consumption of polyurethane elastomers:

Over one-third of the global consumption of polyurethane elastomers is consumed in the production of footwear, primarily microcellular soles; smaller amounts of thermoplastic polyurethane elastomers (TPUs) are consumed in soles, sole inserts and coated shoe uppers (films/coatings).

Growth in consumption of polyurethane elastomers in China will average almost 7% per year through 2014; growth in the United States will average about 3% per year through 2014, growth in Western Europe will average almost 3% and growth in Japan will average about 3% per year.

This report covers microcellular products, (hot and cold) cast elastomers, TPUs, and solid (noncellular) RIM/RRIM products. Not included in this report are PU fibers (spandex/elastane) and elastomeric, rubber-like PU coatings as well as adhesives and sealants.

(For the complete marketing research report on POLYURETHANE ELASTOMERS, visit this report’s home page or see p. 525.6600 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
SODIUM CYANIDE
By Bala Suresh with Takashi Kumamoto

Sodium cyanide is used throughout the world, primarily as a reagent in the mining industry for the isolation of precious metals. About 75% of sodium cyanide is used for gold and silver processing. However, it also has use as a chemical intermediate, especially in locations where there is not a local supply of hydrogen cyanide, since sodium cyanide can be transported and stored. In Japan and Europe, chemical uses predominate, while in North and South America, Australia, South Africa and China, use for gold isolation is the major application. There is substantial world trade in solid sodium cyanide, with the United States, Republic of Korea and Australia as the major exporting nations. Mexico, China, South America and Africa are exhibiting relatively higher growth than the rest of the world.

The major global players include DuPont, CyPlus, Cyanco, Australian Gold Reagents and Orica, but producers in the Republic of Korea and China are following closely behind. The marketing of sodium cyanide is dominated by a few large producers, with DuPont and CyPlus the major ones.

The following pie chart shows world consumption of sodium cyanide:

The sodium cyanide market has changed quite a bit in recent years as a result of the impressive rise in gold prices. Gold mining companies have been investing capital in new grassroots exploration projects, as well as prolonging activities in mines that had been winding down. This has resulted in increased demand for sodium cyanide, and growth is expected to continue during the forecast period, depending on continuing operations at the gold mines. However, it is possible that demand could decline over the next five years because of a combination of factors. If lower-quality grades are processed, it would not increase the cyanide requirements. Increasing delays and impediments in starting up large-scale projects could impact demand, as would investment in capital costs. The ongoing global financial crisis also makes it difficult for mining companies to finance projects. There has been limited success in exploration and relatively fewer new areas are available for gold exploration and production. A decrease in gold production also increases the potential of higher long-term gold prices.

(For the complete marketing research report on SODIUM CYANIDE, visit this report’s home page or see
p. 770.9000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
WET-PROCESS PHOSPHORIC ACID
By Stefan Schlag

Phosphoric acid is the leading inorganic acid produced and consumed in terms of production value and it is the second-largest in terms of volume—after sulfuric acid. By far its greatest use is in the manufacture of phosphate chemicals consumed primarily as carriers of phosphorus values in fertilizers. Use in the production of animal feeds is of secondary importance. Phosphoric acid is also used in the manufacture of phosphate chemicals for use in water treatment and detergent builders, dentifrices, fire control chemicals and a host of smaller markets. Consumption of phosphoric acid for its acid properties is relatively small (e.g., treatment of metal surfaces, beverage acidulation). Phosphoric acid is the leading intermediate product or processing step between phosphate rock and the end markets for phosphorus in phosphate form.

After many years of sustained growth, global demand for phosphate fertilizers declined significantly in 2008 and 2009. The reduction in demand was caused by tremendous price increases for phosphoric acid, which most importantly decreased fertilizer demand, but also negatively impacted consumption in other consuming areas. Fertilizer prices had increased to the extent that farmers’ production costs for soybeans, wheat and maize were pushed past break-even points, despite increasing prices for agricultural goods in the same period. In addition to high feedstock prices, phosphate fertilizer prices were pushed by low carryover stocks, depreciation of the U.S. dollar, and restriction of Chinese DAP/MAP and phosphate rock exports. The price increase of phosphoric acid was driven by the increase in sulfur price, and accordingly in sulfuric acid price.

The following pie chart shows world consumption of wet-process phosphoric acid:

The primary market for wet phosphoric acid is the production of the phosphate fertilizer products ammonium phosphates and triple superphosphate. Fertilizer production accounts for an estimated 80–85% of the global market for wet phosphoric acid. The remainder is consumed in a variety of industrial applications.

The mid- to long-term outlook for the phosphoric acid market is positive. Prices began to decrease by the end of 2008 and throughout 2009, and led to increasing consumption, in particular in the agricultural segment, where soils suffer from low phosphate concentrations after a period of low phosphate use. The fundamental data in the agricultural industry are also in favor of a growing market in the forecast period, including the following factors:

• World population continues to grow.
• Arable land continues to grow globally.
• Arable land per person continues to decrease globally, which necessitates increased productivity per unit area, and increasing use of fertilizers.

(For the complete marketing research report on WET-PROCESS PHOSPHORIC ACID, visit this report’s home page or see p. 760.4000 A of the Chemical Economics Handbook.)

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PEP Report Abstract
ADVANCED CARBON CAPTURE
By Mike Arné

A great deal of attention has been paid in recent years to the issue of carbon emissions and their effect on climate change. Because of this, considerable effort has been made in the area of carbon capture and sequestration as applied to coal-fired power plants. In previous PEP reports and reviews we have examined integrated gasification and combined cycle (IGCC) and oxycombustion. In this report we examine the technology and economics of electric power generation using supercritical pulverized coal combined with scrubbing of the flue gases and compression of CO₂. We present three carbon capture processes. First, we examine the use of generic, modern (30 wt) monoethanolamine (MEA) scrubbing. Second, we examine an advanced amine process as exemplified by the Mitsubishi Heavy Industries–Kansai Electric KM CDR^® process, which uses the proprietary hindered amine KS-1. Finally, we look at the chilled ammonia process, which has been jointly developed by Alstom, the Electric Power Research Institute (EPRI), and SRI International.

We have conducted all of our analyses using new plant construction (the issue of retrofits is beyond the scope of this study) at 550 MW net power output. Our efforts are focused on the development of independent cost analyses tied to the basis of comparison laid out in the U.S. Department of Energy’s report, Cost and Performance Baseline for Fossil Energy Plants, DOE/NETL-2007/1281, revised October 2007. We have found that on a levelized cost basis with 90% CO₂ capture and compression, MEA scrubbing adds 4.5¢/KWh to the cost of power generation via supercritical pulverized coal. The advanced amine and chilled ammonia processes show similar overall economics, each adding 4.1¢/KWh.

For the complete December 2009 Report 180C on ADVANCED CARBON CAPTURE, visit this report’s home page.)

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PEP Review Abstract
CARBON DIOXIDE COMPRESSION
By Mike Arné

In PEP Report 180C, we examine the technology and economics of three potential process schemes associated with the postcombustion scrubbing of flue gases from coal-fired power generation. In postcombustion scrubbing, CO₂ is typically recovered at near atmospheric pressure. It must then be compressed prior to subterranean sequestration. The cost of this compression is a major contributor to the overall cost of carbon capture and sequestration. A novel means of conducting CO₂ compression is currently under development by a company called Ramgen. Its proposed compressor is based on jet aircraft engine technology. It raises the possibility of attaining an overall compression ratio of 100:1 in two 10:1 stages. In this review we examine the Ramgen concept as applied to carbon capture in coal-fired electric power generation.

The approach we have used is to evaluate the economics of a power plant where the Ramgen compressor is integrated with an advanced amine scrubbing unit. We have picked for our analysis the Mitsubishi Heavy Industries–Kansai Electric KM CDR^® process using the proprietary hindered amine KS-1. We then compare this integrated process to a case we present in PEP Report 180C where the KM CDR^® process is integrated with a conventional centrifugal compressor unit. We have found that on a levelized cost basis with 90% CO₂ capture and compression, the Ramgen case shows slightly lower costs than the centrifugal compression case: $2.67 per MWh and $3.70 per ton avoided CO₂.

(For the complete December 2009 Review 2009-12 on CARBON DIOXIDE COMPRESSION
visit this report’s home page.)

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PEP Report Abstract
COAL TO GASOLINE
By Ronald Smith

Rising world oil prices have renewed interest in producing fuel from unconventional sources such as coal, oil shale, and biomass. Large coal reserves and viable technology to produce liquid fuels from coal give promise to the rebirth of a U.S. domestic coal industry. In the long term it makes sense to rigorously pursue the commercial development of coal to liquids (CTL) technologies from the perspective that it may be the only pathway that can deal with the tyranny of large numbers required to close the gap between supply and demand for transportation fuels.

The United States has many opportunities including improving energy efficiencies that alone however will not be sufficient. Fiscal and regulatory actions will also be needed to promote greater economic and energy security. CTL must be an important part of the solution portfolio as the nation needs to respond to the realities of world energy markets, including global energy demand and the need to protect the environment. A commercially competitive CTL industry in a high energy price environment could be producing as much as 3 million barrels per day of high-quality liquid fuels by 2030. This level of fuels production would provide about 15% of the current oil demand in the U.S. and would provide the means required to break the current national addiction to oil.

In this report we examine the technologies involved to produce fuels from coal by two of the most promising routes, including high-temperature Fischer-Tropsch (F-T) and methanol to gasoline (MTG). The first F-T route produces a slate of transportation fuels including gasoline, jet fuel, diesel, and fuel oil. The second route produces a 90+% yield of gasoline from methanol, which can be produced either from coal or natural gas.

Finally, this report provides a combination of simulated and conceptual designs and economic analysis for the production of F-T liquids using high-temperature synthesis technology. The bases for this analysis include the construction of both demonstration- and refinery-scale plants that are free-standing.

For the complete December 2009 Report 271 on COAL TO GASOLINE, visit this report’s home page.)

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PEP Report Abstract
HIGHER ALCOHOLS FROM SYNGAS, TECHNOLOGY SURVEY
By Peter Pavlechko

This report reviews the current state of the patent literature concerning direct alcohol synthesis, homologation, hydroformylation, and miscellaneous associated concepts. For each topic, trends are noted whenever possible, and ideas for potential future evaluations of technology are suggested.

Most aspects of direct alcohol synthesis are stagnant, though recent patent applications for direct mixed alcohols could be evaluated. The concepts are more amenable to fuel alcohols than isolated pure alcohols, so the limitation of stranded gas fields should be avoided until the process concepts are understood.

Homologation patent developments are also largely stagnant. Recent activity with C₂-C₄ mixed oxygenates centers on process configuration rather than conversion and yield, but the processes could be evaluated. General alcohol homologation would be a desirable category to see new results in, but activity is even lower there than in other areas.

Hydroformylation at a limited stranded gas field is likely not viable since it would rely on obtaining an olefin economically. Since a remote location would require generation of the olefin on-site, the scale would need to be large to make economical olefins. Recent developments imply hydroformylation in general should be evaluated, as long as the limitation of the stranded gas field concept is dismissed. Such a report (Oxo Alcohols) is planned for the 2010 Process Economics Program.

Of the array of concepts under related technology, hydrogenation ideas are marginal with few developments. Methanol is periodically evaluated in its own series, the most recent of which was a 2006 report. Dimethyl ether/methanol developments are modest and do not justify near-term evaluation. Alcohol products via methanol, formaldehyde or epoxide all show limited development. The epoxide category shows the most activity, but the audience would likely be narrow, so none of those concepts has a high priority. Olefins from syngas via alcohols shows recent developments, but the focus is on the olefin derivatives, not the alcohols. Olefin developments warrant attention, but not for an alcohols study, unless it were part of an integrated process. Miscellaneous concepts and equipment and process technology indicate a modest number of ideas, but none justifies evaluation because the ideas are largely incremental and would not impact a conceptual design level evaluation. Alcohol-related fuels technology shows little recent development, so the concept does not justify evaluation. Coproduct and cogeneration, though, do show recent activity, so combined facilities warrant some attention. A report on alcohols and cogenerated electricity is planned for the 2010 Process Economics Program.

(For the complete December 2009 Report 268 on HIGHER ALCOHOLS FROM SYNGAS, TECHNOLOGY SURVEY, visit this report’s home page.)
 

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PEP Review Abstract
NATURAL GAS RECOVERY FROM METHANE HYDRATES VIA DEPRESSURIZATION
By Dipti Dave

Methane hydrates are solid crystalline lattices of ice that encapsulate molecules of natural gas. Enormous volumes of methane hydrates have been discovered in several regions of the world. For hydrates to form and maintain stable molecular structures, the constituents (water and natural gas) can only exist within a limited temperature/pressure environment. There is enough natural gas in known methane hydrate formations to meet the world’s demand for natural gas for many decades. The problem is developing a cost-competitive while safe and environmentally friendly process for capturing the natural gas within hydrates.

Several conceptual processes are being tested that have been developed and patented by energy companies for natural gas recovery from methane hydrates. These include the depressurization method, thermal recovery method, chemical injection method, and displacement recovery method.

SRIC has prepared a capital cost and production cost estimate for producing natural gas from methane hydrates using the depressurization method at a production capacity of 19.25 billion scf/year (53 MM-scf/d). Depending on design basis assumptions related to hydrate formation characteristics, depth, reservoir size, and economic assumptions involving project ROI, we believe that natural gas can be produced at wellhead costs (including ROI) of $4.50-10/k-scf. These costs are in the range of commercial prices for natural gas at distribution hubs, but are well above commercially viable (as of 2009) wellhead prices.

Improvements in the specific technologies identified, and possible combinations of the technologies when applied to a specific hydrate formation, have the potential to substantially reduce overall production cost.

(For the complete December 2009 Review 2009-13 on NATURAL GAS RECOVERY FROM METHANE HYDRATES VIA DEPRESSURIZATION, visit this report’s home page.)

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PEP Review Abstract
POLYETHYLENE PRODUCTION BY A SOLUTION PROCESS USING LOOP POLYMERIZATION REACTORS
By Susan L. Bell

Dow Chemical Company has made substantial changes in the low-pressure solution polymerization process for ethylene polymer production in recent years. In the conventional solution process, continuous stirred tank reactors (CSTRs) are typically used. Recent patents by Dow Chemical Company disclose the use of nonadiabatic flow loop reactors instead of CSTRs in the solution polymerization process. The process economics for polyethylene production by a solution process with loop reactors are evaluated based on a plant capacity of 400,000 metric tons per year.

(For the complete November 2009 Review 2009-8 on POLYETHYLENE PRODUCTION BY A SOLUTION PROCESS USING LOOP POLYMERIZATION REACTORS, visit this report’s home page.)

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PEP Report Abstract
POLYSILICON FOR SOLAR WAFERS
By Anthony Pavone

Silicon wafer–based photovoltaic cells that absorb light photons and convert them to electricity (electrons) appear to be at the edge of commercial cost-competitiveness (grid parity). The purity of silicon used to make solar wafers can be considerably lower than electronic-grade silicon used to make semiconductors for microprocessors, allowing for the use of lower manufacturing cost technologies such as Siemens reactors, fluidized bed reactors, and directional solidification furnaces. Solar cells are made from feedstocks such as upgraded metallurgical-grade silicon, polysilicon, thin film amorphous silicon, thin film non–silicon metal complexes (cadmium telluride, cadmium indium germanium selenide, etc.), and organometallics.

Two kinds of companies currently market commercial quantities of polysilicon used to produce solar wafers: (1) on-purpose producers starting with high-purity quartz, trichlorosilane (or similar silicon-containing gases) that produce polysilicon in high-temperature furnaces, and (2) recyclers of electronic-grade silicon that has been scrapped from discarded electronic products or recovered as by-product waste from silicon production. We examine the purity requirements and processing schemes for producing solar-grade polysilicon, and report on the corresponding economics.

Until year 2000, photovoltaic cells were produced primarily from electronic-grade silicon. More recently, silicon-based photovoltaic cell producers have learned how to produce the photovoltaic cells directly from polysilicon, thereby eliminating the costly last step of converting polysilicon first to higher-purity single crystal silicon. Also commercialized recently is technology for producing “upgraded” metallurgical silicon that can be blended into higher-purity solar-grade polysilicon and used to produce photovoltaic cells. There are claims that upgraded metallurgical silicon can be used directly (not blended) to form solar wafers. Directional solidification furnaces operating at high vacuum accomplish this objective.

We present in this report the process engineering technology and corresponding production economics for making at commercial scale “solar-grade” polysilicon via (1) Siemens furnace technology (the market leader), and (2) fluidized bed reactor technology. We also present (3) the process design and corresponding technoeconomics for producing upgraded metallurgical silicon ingots in a rotational solidification dimensional electric induction furnace operating at high vacuum.

(For the complete December 2009 Report 272 on POLYSILICON FOR SOLAR WAFERS, visit this report’s home page.)

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PEP Review Abstract
PROPYLENE OXIDE BY THE BASF-DOW HPPO PROCESS
By Marcos Nogueira César

In recent years, the propylene oxide (PO) industry has been quite active in researching new process technologies to manufacture PO without coproducing large amounts of styrene or t-butyl alcohol, or generating chloride-containing waste streams. Many companies have investigated PO technologies using hydrogen peroxide (HPPO process), and effective catalysts have been developed to improve the selectivity to PO. In late 2002, BASF and Dow Chemical joined forces in the development of an HPPO technology process. A 300,000 metric ton-per-year plant using this technology was completed at Antwerp, Belgium, in March 2009. In Thailand, Dow and Siam Cement Group (SCG) have broken ground on a 390,000 metric ton-per-year PO facility near Map Ta Phut, using the BASF-Dow HPPO technology. The plant is expected to come online in 2011.

This review presents a conceptual design and preliminary economics for a plant producing 200,000 metric tons per year of PO from propylene using the HPPO process. The plant is integrated with a unit that generates hydrogen peroxide by direct reaction of hydrogen and oxygen. We also compare the economics of the HPPO technology with those of the conventional PO/SM, PO/TBA and chlorohydrin processes.

Our analysis indicates that recent patented improvements in the product recovery configuration have resulted in a significant reduction in the overall steam consumption of the HPPO process. The improved version of the technology can be cost-competitive with the PO/SM and PO/TBA processes when market prices for the styrene and TBA coproducts are relatively low. One of the main benefits of the HPPO technology, which could justify new capacity additions in developing regions, is the fact that it eliminates the need for additional infrastructure or markets for coproducts. However, to be competitive, the HPPO process depends on the availability of a low-cost source of hydrogen peroxide.

(For the complete December 2009 Review 2009-4 on PROPYLENE OXIDE BY THE BASF-DOW HPPO PROCESS, visit this report’s home page.)

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PEP Report Abstract
THERMOCHEMICAL CELLULOSIC ETHANOL
By Ronald G. Bray

World ethanol production has experienced spectacular growth. This growth has been based on starch and sugar feedstocks. Cellulosic biomass has the potential to become an alternative feedstock for ethanol production. Cellulosic biomass consists of forestry wastes, agricultural residues and municipal solid waste (MSW). Numerous challenges, both technical and infrastructure related, are associated with commercializing lignocellulosic biomass as feedstock for ethanol production. While large quantities of various crop wastes go unused throughout the world, these lignocellulosic materials are difficult to efficiently convert into chemical products because of their complex polymeric structures. Innovative new technologies that couple biotechnology and chemistry with process engineering are necessary in order to achieve efficient commercial processes. To support commercialization, the U.S. Department of Energy announced in 2007 that the government would invest up to $385 million in six commercial-scale U.S. projects for lignocellulosic ethanol. Four of the six projects will utilize biochemical conversion technologies and the others will utilize thermochemical conversion technologies.

In this report, PEP presents process designs and associated cost estimates for producing ethanol in the United States from syngas derived from cellulosic biomass. We examine the conversion of wood chips to syngas followed by its conversion to ethanol via chemical catalysis and also via fermentation. We also compare these economics to the production of ethanol via dry corn milling. This report supplements PEP Report 263, Biochemical Cellulosic Ethanol (2008).The general conclusions are summarized below.

• It is unlikely that thermochemical cellulosic ethanol will be competitive with corn dry milling in the near future, largely because of the high capital investment required for a new plant. However, recent legislation in the United States provides various incentives for commercialization of cellulosic ethanol.
• Large-scale initiatives under way in the United States could change the competitive situation of cellulosic ethanol in the longer term. Some of these initiatives include development of feedstock infrastructure to lower the potential cost of cellulosic feedstock. Other initiatives are under way related to processing technologies for lowering fixed capital requirements.

(For the complete December 2009 Report 270 on THERMOCHEMICAL CELLULOSIC ETHANOL, visit this report’s home page.)

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SCUP Report Abstract
ADHESIVES AND SEALANTS
By Ray Will with Thomas Kälin, Akihiro Kishi and Yang-Wei

This report focuses on the supply/demand and business aspects of the higher-value synthetic adhesives and sealants as opposed to the long-established commodity products, typically of natural origin such as animal- and plant-derived adhesives.

The polymer dispersion/emulsion adhesives category is the largest because of their versatility and moderate price, followed by solvent-based adhesives. Consumption of solvent-based adhesives is declining in developed countries primarily because of VOC emission regulations, but is growing strongly in developing countries such as China following the rise of shoe manufacturing.

Silicone products dominate the sealants market, followed by polyurethane products. Polysulfide sealants are losing market share to these products and to commodity sealant products. Silicon-modified polyether sealants have expanded beyond their Japanese production base to the larger markets in North America and Western Europe.

Specialty adhesives and sealants compete more on performance than price, as compared with general-purpose or commodity products, although major adhesive and sealant producers may produce a full range of products including specialty and general-purpose products; their products are typically branded. Producers command a premium for specialty products, while general-purpose products typically also benefit from branding, with more of a premium than less powerful brands or generic products.

The following pie charts show world consumption of adhesives and sealants.

Significant increases in petroleum-derived feedstock prices have impacted adhesive and sealant producers. Commodity producers tend to operate with smaller margins and have a greater share of production cost in raw materials, while specialty producers have cited feedstock prices as reasons for recent price increases and surcharges. Typically, producers with valuable brands have exercised pricing power and tried to maintain margins during rising raw material prices although this was exceptional during the economic recession in 2008 since raw material price increases tended to outpace adhesive and sealant price increases, particularly in the first half of 2008.

Consolidation in the adhesives and sealants industry has built depth in vertical integration and broadened product lines in some major companies such as Henkel, while other companies have closed, or spun off poorly performing or less related businesses or reduced the array of products offered, such as General Electric and H.B. Fuller. However, the industry remains highly fragmented, with numerous small and medium-sized companies with a relatively high level of customization and service, particularly in the highest-value adhesive and sealant segments.

The cost of producing adhesives and sealants is attributable primarily to the cost of the raw materials plus the necessary service component of training customers and helping them resolve manufacturing issues. Adhesives compounding equipment is typically installed in multipurpose units that are seldom dedicated to a specific product. Important strengths in manufacturing are flexibility, low-cost production units and appropriate quality control.

In general, the adhesives business is highly competitive, especially in the commodity sector. Prices and margins vary, depending on the specific adhesive or sealant, market segment, and regional market. In general, gross margins for adhesive products commonly range from 15% to 25% for commodity products, while specialty products can range to as much as 45–50% or more. Producers in the mature commodity markets compete on price; customers often request bids from competing producers. For premium products, adhesives are selected and priced based on their performance characteristics. Product performance and level of service are seldom identical among different producers so pricing is typically differentiated by the needs of the customer. Also, formulation changes or reformulations may reduce the impact of raw material price increases. But ultimately, pricing power is strongest for unique products in high demand.

Environmental regulations continue to increase as more VOC emission sources are targeted for reduction or elimination. Some producers have switched from targeted solvents to other solvents only to find they must switch again with new regulations, or have changed to lower- or no-emission technologies. Waterborne products continue to push into commodity markets, but their penetration into specialty segments has slowed because of the formulating difficulties and performance challenges in the solventborne segments. Although the consumption of solvent-based adhesives is continuing to decline in North America, Western Europe and Japan, this category is growing steadily in China and the rest of Asia, following the growth of relocated industries such as shoe manufacturing. Overall, hot melt technologies have seen the greatest growth globally, because they offer very low or no emissions, work on a variety of substrates, and are easy to apply. Also, new low-temperature and reactive hot melt products have expanded the possible end-use areas for these adhesives.

(For the complete December 2009 report on ADHESIVES AND SEALANTS, visit this report’s home page or see vol. 4 of Specialty Chemicals—Strategies for Success.)

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SCUP Report Abstract
SPECIALTY FILMS
By Fred Hajduk, Barbara Sesto, Hiroaki Mori and Yang-Wei

This report discusses the two major categories of specialty films—engineering films and high performance films. Each category has the following major classes:

• Engineering Films
  -Polyester
  -Nylon
  -Polycarbonate
• High Performance Films
  -Fluoropolymer
  -Polyimide
  -Polyethylene Naphthalate
  -Cyclo-olefin Copolymer
  -Developmental

Although they are consumed in much lower quantities than engineering films, high performance films receive greater emphasis in this report because of their high prices and high value in use. Developmental films are a subset of high performance films that includes a variety of commercial and semicommercial films with low annual consumption volumes and high selling prices. The term developmental does not necessarily refer to product life cycle position, but also reflects the films’ niche market status. Most of these films are performance driven and encounter relatively low levels of intermaterial competition.

Major manufacturers (fabricators) are usually back-integrated operations that use captively produced resins to make specialty films. Approximately twenty major worldwide fabricators account for more than 80% (by weight and value) of the total manufacture of specialty films in the United States, Western Europe, Japan and China.

The market for specialty films is driven both by technology-push (base polymer producers) and by market-pull (film users). Producers are motivated to reach minimum economic volumes for high performance polymers and, at some point, film performance properties are matched with existing or new market needs.

The following pie chart shows consumption of specialty films in the four major regions, on a value basis:

The current economic recession began in the United States in the fourth quarter of 2007, and as of the writing of this report, it may or may not be continuing. Nevertheless, consumption growth for nearly all resins and films essentially came to a halt during 2008 and for several, even showed year-over-year declines. Numbers for 2009 to date have showed significant consumption drops for these materials—in some cases 10% or more. While industry observers expect consumption growth to resume, they differ on when and at what rate. For most of the materials covered in this report, we have assumed that in the United States, consumption growth will resume in the latter half of 2010, but at levels reduced from the historical rates. Growth rates are expected to recover to historical norms during 2011 or 2012. Thus, under this scenario, 2008 consumption levels for many of the materials will not be achieved until 2012 or 2013.

The United States fabricates and consumes the largest total volume of specialty films. U.S. exports to other world regions are substantial for some types of film such as polyester, polycarbonate, polyimides and fluoropolymers. Imports of polyester film from Japan, the Republic of Korea and Taiwan are also significant.

Although suppliers of engineering films are well-established in Europe, the high-performance film industry is not yet well-developed. Imports account for a significant portion of fluoropolymer film and PEN film consumption and virtually all of polyimide and LCP film demand.

Japanese companies are displaying an increasing interest in polyimide and developmental films in particular. Unlike their U.S. and Western European competitors, some large Japanese film fabricators make films from purchased resins. Toray Industries, together with its affiliated companies, is the recognized leader in the Japanese specialty films business. The number of strategic alliances between Japanese fabricators and Western partners is significant and increasing.

The Chinese market, while large and rapidly growing, is still in its developing phase. Although numerous converters exist and the number continues to grow, imports of specialty films represent a major portion of supply.

Compared with other businesses covered in this report, the polyester film business is large, global and very competitive. A large number of companies supply polyester film, and some, such as DuPont Teijin/Teijin DuPont, Mitsubishi, and Toray, maintain fabrication facilities in more than one region. The polyester film business is truly global in nature, and its globalization is increasing through the formation of international joint ventures between some of the largest regional suppliers. In recent years, however, the attractiveness of the polyester film business has diminished because of slow growth prospects in major markets and weak profitability resulting from worldwide overcapacity and the entrance of new competitors in developing countries.

Dominated by regional players, the nylon film business is less global than most of the other classes of specialty films. Competition from polyethylene terephthalate (PET) in the flexible packaging markets for unoriented and monoaxially oriented nylon film has escalated because of declining raw material prices and an oversupplied global market for PET. Consumption of biaxially oriented nylon film is steadily growing, particularly for food packaging.

(For the complete December 2009 report on SPECIALTY FILMS, visit this report’s home page or see vol. 13 of Specialty Chemicals—Strategies for Success.)

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