Manuel Díaz, Executive Director,

APLA

"In many cases, petrochemical products can be used in the energy transition, including green ammonia and green hydrogen. There are three important components to consider here: specific projects to produce green products, decarbonization initiatives, and increasing recycling."

How would you evaluate the performance of Latin America’s petrochemical and chemical industries in 2021?

In 2021 the industry has performed to the necessary level, consolidating in its effort to combat Covid-19, which the chemical and petrochemical sectors have played a huge part in since 2020. Healthcare, personal care, sanitization products and plastics for delivery have been and remain in high demand. In 2021, with the recuperation of some economies, rebounds in the automotive, construction and durable goods markets have also stimulated the industry.

There have also been challenges, most notably with logistics. The flow of goods from the US, Europe and Asia has become slow and expensive. Although this is a global issue, it has also highlighted the logistics deficit in Latam, which must be addressed with investment into infrastructure. The region has a deficit of petrochemical products, and logistics improvements must be made to supply these products in 2022 and beyond.

Do you think the logistics issues in 2021 have emphasized the importance for stronger regional supply chains instead of depending on imports?

At the moment, Latin America does not have the capacity to produce every petrochemical and chemical product line at the scale necessary to supply demand. Brazil, our biggest market, has potential to increase its supply, but lacks raw materials. Therefore, we have the current tradeoff whereby a percentage of feedstock has to be imported from abroad. Increasing the added value of Latin America’s natural resources is a priority for the whole industry, such as the development of the Vaca Muerta gas reserves in Argentina.

What role can the petrochemical industry play in the global energy transition?

In many cases, petrochemical products can be used in the energy transition, including green ammonia and green hydrogen. There are three important components to consider here: specific projects to produce green products, decarbonization initiatives, and increasing recycling.

The increased consumption of petrochemical products during the pandemic, especially plastics, offers an opportunity to improve recollection and recycling processes and practices. To achieve this, the industry must work in collaboration with governments and society.

How can producers balance the need to produce more chemicals to supply growing demand, while at the same time trying to lower carbon emissions?

Although these two objectives do not appear compatible, the use of new technologies can allow the industry to produce more while lowering its carbon footprint. Progress has already been made, as modern operations produce far less CO2 than in the past. Moving away from traditional means of production and incorporating innovation such carbon capture technologies will contribute to further decarbonization improvements.

What will be some of the main themes covered at APLA’s annual meeting in November?

Sustainability and the energy transition will be two of the key themes covered. On September 28th, 2021, we held APLA’s first virtual Sustainability Meeting, which highlighted circular economy programs that will lead to sustainable business, the monitoring of public policies and the adaptation of global objectives to local realities. We want to expand on these issues, looking at changes which can be made today that will have a tangible impact on our future.

Innovation is another important topic. According to the Inter-American Development Bank (BID), Latam is 10 years behind with regard to the use of digitalization in logistics compared to developed nations. The implementation of new technologies will help reduce costs and time, as well as increasing visibility. It will also help the industry meet sustainability targets.

Will the annual APLA reunion go back to physical or hybrid format in 2022?

It is known that humans are gregarious beings that need social interaction. That is the reason why the annual APLA meeting is an important event for the industry to meet and share ideas, and experience the face-to-face interactions that help to capture energy that cannot be replicated to the same extent through a screen. Therefore, we will do all we can to have a physical format in 2022. However, virtual meetings also offer numerous benefits. For instance, APLA’s 23rd annual logistics meeting held in August 2021 saw over 300 companies and 650 attendees attending – our biggest turnout for a logistics event. A virtual component will remain important for future meetings, and attending hybrid events in the coming months will help us prepare the best format for APLA’s 2022 events.

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