How do you observe the current cycle in the petrochemical markets?

Compared to last year, the petrochemical industry is facing a stronger downcycle. This started in 2019-2020, but it was disrupted by the pandemic, which postponed the addition of planned new capacity and created a special post-lockdown demand that lasted for 18 months. With new capacity coming onstream and relatively weak consumption patterns, it seems we are at the bottom of that cycle, South America itself being a net importer and therefore a direct recipient of excess supply. While the PP (polypropylene) market is more balanced, in PE (polyethylene), overcapacity is more pronounced and reverts to exports. I expect these fundamentals to rebalance in the medium term, especially as China’s economy bounces and triggers more captive demand. Braskem is well-positioned within this environment thanks to our product, feedstock and regional diversification, our cost discipline, and our alignment with ESG. Sustainability, in all its forms, is not a passing trend – it is a megatrend. This is where we’ve directed most of our investments. Braskem set out to significantly increase its bio-based product volumes, as part of the I’m Green portfolio. Can you walk us through the different ways in which you are pursuing this goal?

Over the last year, we debottlenecked our green ethylene production facility in Brazil by 30%, increasing our production capacity to 260,000 t/y. Among the biggest drivers for our expanded production has been the growth in our green EVA (ethylene vinyl acetate copolymer) for the footwear industry. To support our growth in the bio-polymer market, we have recently announced a partnership with Thai company SCG Chemicals to build a green ethylene plant in Thailand. In a similar vein, in a partnership with Sojitz, a Japan-oriented global trading company, we launched Sustainea, which will produce and market bioMEG (monoethylene glycol) and bioMPG (monopropylene glycol). MEG is used as a raw material for PET. Besides these different partnerships for technology development and increased production, we also licensed our green ethylene technology with the help of Lummus, a tech licensor, to enable other players to use our proven technology for a better future, for all of us. Also, we announced a project to evaluate an investment in producing carbon negative bio-based polypropylene in the US. Braskem has made various investments in recycling facilities. Can you share the latest?

Volume-wise, our sales of products with recycled content went up to 54,000 t in 2022, a 144% increase from 2021. Braskem has become more closely involved in the end-to-end plastics value chain, starting our first fully owned facility for mechanical recycling in Indaiatuba, close to São Paulo; operated by Valoren, this is able to transform 250 million packaging units into 14,000 t of recycled PE and PP. On top of this, we also acquired 61% of the shares of Wise Plásticos, a leading mechanical recycling company in Brazil, with a goal to achieve 50,000 t/y of recycling capacity by 2026, doubling the capacity of Wise today. Meanwhile, in Europe, Upsyde, a JV by Braskem and Terra Circular, is a company that turns hard-to-recycle plastic waste into durable goods like road plates, as well as pallets, used in the construction sector, with a patented technology. Last year, we also launched an innovation hub for developing sustainable packaging, called Cazoolo. What role do you think chemical recycling will play in closing the loop on plastics?

Even though mechanical recycling remains the low-hanging fruit today, I believe advanced (or chemical/molecular recycling) will be the most relevant in due time. Braskem has an agreement with Valoren, that is planning to build a chemical recycling facility on the same site as our mechanical recycling facility at Indaiatuba. Having both technologies available would enable us to sort between products amenable to mechanical and to chemical recycling, for better efficiency. Initially, they will start with a small, 6,000 t/y chemical recycling facility and work on perfecting the technology. The volume will be supplied to Braskem crakers. In this new technology realm, there are many technology routes being developed and that’s why we have different initiatives. Braskem currently runs partnerships both in the US (with CWRU and Nexus Circular) and Brazil (with Senai and the University of Rio de Janeiro), as well as developing in-house innovations at our Centre in Pittsburgh, Pennsylvania.