Sustainability at the Forefront
A regional view of developments in petrochemicals and logistics
The petrochemical sector is navigating a period of uncertainty, explained Rina Quijada during her speech at APLA’s 25th Logistics Meeting in Buenos Aires. According to the VP industry executive advisory for Latin America at S&P Commodity Insights, the industry faces a trilemma encompassing economic, societal, and environmental considerations, including uncertainty over geopolitical conflicts, climate change, and rising interest rates.
However, the convergence of sustainability, biofuels, recycling, and green energies is paving the way for Latin America to produce sustainable raw materials such as ammonia and ethane. “In the past two or three years, there has been a shift in the industry conversation and companies are already exploring how to join the energy transition path. These trends, which initially gained momentum in Europe and the United States, are now part of senior management discussions when evaluating strategies for the petrochemical industry in the region,” commented Quijada.
Latin America is at the forefront of a promising opportunity, as countries like Argentina and Brazil tap into their substantial agricultural industries to turn waste into valuable resources for energy production. What in the past were considered byproducts and waste are now considered potential sources of biomass and biofuels. This paradigm shift presents economic benefits and aligns with the industry’s commitment to sustainability and to reducing CO2 emissions. “Thanks to technology and new processes, these types of materials will be harnessed and, eventually, become essential elements of this energy transition,” concluded Quijada.
Climate change and infrastructure
As the realm of logistics embraces the transition towards green energy and aligns with the goals outlined in the Paris Agreements, it is crucial to acknowledge that the implementation of more environmentally friendly fleets may come at a higher cost, impacting shipping fares.
Climate change, the world’s top challenge, is taking its toll on the logistics segment. Illustrating this, Eduardo Praselj, president of the Logistics Association of Venezuela, highlighted the recent events at Panama, where the authorities of the Panama Canal decreased vessel draft limits due to insufficient rainfall in the Gatun Lake: “The loading capacities of vessels have been reduced, with large vessels potentially experiencing up to a 40% decrease”, he explained.
Carlos Gustavo Freitas de Sousa, research analyst at Brazilship, elaborated that a key aspect that exacerbates the impacts of climate change on logistics is the insufficient infrastructure development in the Americas. This has resulted in port closures during adverse events leading to disruptions and delays, and showcasing real weak points in the logistics value chains.
“A key aspect that exacerbates the impacts of climate change on logistics is the insufficient infrastructure development in the Americas. This has resulted in port closures during adverse events leading to disruptions and delays, and is showcasing real weak points in the logistics value chains.”
Carlos Gustavo Freitas de Sousa, Research Analyst, Brazilship
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