Session 3 presentation by IEA

1. IEA 2019. All rights reserved.
Plastics and petrochemicals in energy modelling
Peter Levi, Energy Technology Policy Division
Tae-Yoon Kim, Energy Supply and Investment Outlook Division
OECD technical expert workshop on modelling approaches for plastics use projections (remote)

2. IEA 2019. All rights reserved.
The broader modelling context
End-use sectors Service demands
TIMES models
Industry
Long-term simulation
Buildings
Mobility Model (MoMo)
Transport
Primary energy Conversion sectors Final energy
Passenger mobility
Freight transport
…
Space heating
Water heating
Lighting
…
Material demands
…
Renewables
Fossil
Nuclear
Electricity T&D
Fuel conversion
Fuel/heat delivery
ETP-TIMES Supply model
Electricity and heat
generation
Electricity
Gasoline
Diesel
Natural gas
Heat
etc.

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Industry model scope
Blast furnaces and
coke ovens (T&E)
Industry TFC
(process energy)
Non-energy use
industry TFC
(feedstock)
Industry is appears in multiple
areas of the IEA Energy Balance,
in transformation, TFC (Industry)
and TFC (Non-energy use)…
Chemical and
petrochemical sector
Iron and steel sector
Non-metallic
minerals sector
Non-ferrous metals
sector
Pulp and paper
sector
‘Other industry’
sector
We translate this into 6 sub-
sectors (5 energy-intensive)
that we model partially and
separately…
(Chemicals)
(Steel)
(Cement)
(Aluminium)
(Paper)
Main productFull sector name

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Industry modelling – hybrid approach
Chemicals
Ethylene
Propylene
Benzene
Toluene
Mixed xylenes
Methanol
Ammonia
Steel
Aluminium
Cement
Paper
Mechanical pulp
Chemical pulp
Semi-chemical pulp
Dissolving wood pulp
Non-wood pulp
Recovered pulp
Newsprint paper
Printing paper
Sanitary paper
Packaging paper
Other paper
Recovered paper
Energy intensive sectors
Technology-rich, bottom-up approach
with cost-optimisation modelling (TIMES)
Other industry
Residuals of intensive sectors
Transport equipment
Machinery
Mining and quarrying
Food and tobacco
Textile and leather
Wood and wood products
Construction
Non-specified industry
Non-energy intensive sectors
Simulation methodology, with some
bottom-up detail on specific cross-
cutting equipment (e.g. motors)
+ plastics
29%
21%
7%
4%
4%
34%
Chemicals
Steel
Cement
Paper
Aluminium
Other industry
Industrial energy
consumption, 2017
Note: Industrial final energy consumption includes
petrochemical feedstock, blast furnaces and coke ovens.

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Fuels and feedstocks to plastics
Process1
Feedstock energy inputs
e.g. ethane, naphtha, natural gas, NGL, coal etc.
Process energy inputs
e.g. electricity, heat, steam etc.
Process2
Processi
…
Plastic
materials
PET
HDPE
PVC
LDPE
PP
PS
Other
Primary
Chemicals
Ethylene
Propylene
Benzene
Toluene
Mixed xylene
Ammonia
Methanol

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Input data
Model results
Overall industry modelling structure
Activity model Capacity model
Technology model
Stock model

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Overall industry modelling structure
Activity model Capacity model
Technology model
Stock model
Activity model inputs
Industry value added
Agriculture value added
Population
Gross domestic product
Stock model results Historic production
Historic consumption
Historic imports/exports
Activity model outputs
Consumption projections
Production projections

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Production projection methodology
Demand is determined by a per capita saturation parameter and the growth in value-added by industry/agriculture. A generalized
logistic function is applied which is informed by Industry Gross Value-Added (GVA) and saturation rates for most countries in the world.
The function stipulates…
𝑌 𝑡 = 𝐴 +
𝐾 − 𝐴
1 + 𝑒−β𝑡 ൗ1
𝑣
where…
𝑌(𝑡) is the demand per capita in year t
𝐴 is the demand per capita in 2050
𝐾 is the demand per capita saturation level
𝛽 is an adjustment factor for the growth rate
𝑣 is an adjustment factor for the initial slope
(all parameters equal to 1)
Figure source: Wikipedia
Production is determined by applying a trade mapping matrix to the global level of
demand. Trade patterns are generally expected to follow historic/existing patterns, but
announced policies on (e.g. on targeted output levels) are taken into account.

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Production of key plastic materials
Production of key plastic materials is projected to grow by more than 50% over the next three decades,
with production per capita rising by more than 20%.
0
100
200
300
400
500
600
700
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Production(Mt)
Other PS
PP LDPE
PVC HDPE
PET
ProjectionHistoric/estimated

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Activity model Capacity model
Technology model
Stock model
Stock modelling
Stock model inputs
Product lifetimes
Sectoral demand shares
Recycling rates
Process yields
Activity model results Building stocks
Transportation stocks
Supply installation stocks
Stock model outputs
Material stocks
Scrap availability
Material efficiency factors

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Stocks of plastics in society
Included:
PC
PMMA
PAN
PVA
ABS
SAN
For each durable product…
Primary chemical savings ~ f ( ηd , ηy , ηc , Qp , C )
Where; ηd = ‘down-cycling’ factor (%), ηy = recycling yield (%), ηc = collection rate (%), Qp = recyclable plastic (Mt), C = mapping matrix.
Lifetime
Fractionavailableforrecycling
e.g. Packaging (μ∽6 months)
e.g. Construction (μ∽50 years)
//
How much recyclable plastic is available?
What is its composition?
Primary chemical savings?

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Primary and secondary production
In the Sustainable Development Scenario, collection rates triple during 2015-2050, resulting in nearly
80 Mt of primary chemical savings.
0
10
20
30
40
50
60
70
80
0
100
200
300
400
500
600
700
800
2015 2020 2030 2040 2050 2020 2030 2040 2050
STEPS SDS
Primarychemicalsavings(Mt)
Production(Mt)
Substitutable
secondary
Non-substitutable
secondary
Primary
Primary chemical
savings

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Technology modelling
Activity model Capacity model
Technology model
Stock model
Technology model inputs
Stock model results
Capacity model results
Activity model results
Energy intensities
CO2 trajectories
Material intensities
Specific CAPEX
Specific fixed OPEX
Energy prices
Equipment lifetimes
Construction times Deployment constraints
Availability constraints
Emission factors
Other constraints
Technology model outputs
Feedstock consumption
Investments
Fuel consumption Material production
CO2 emissions

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Rise of petrochemicals in oil demand
The diverging sectoral oil demand outlook underpins a large-scale shift towards lighter products, which
would pose challenges for refining business models
Changes in the composition of oil product demand by scenario
30%
23%
20%
13%
16%
22%
25%
26%
35%
39%
37%
33%
18%
16%
19%
29%
20% 40% 60% 80% 100%
2040: SDS
2040: STEPS
2018
1990
Lighter ends Gasoline Middle distillates Heavier endsPetchem feedstocks

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Investment in petrochemicals
An investment boom has been driven by higher industry margins, US shale production growth and
optimism about future demand

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A more sustainable chemical sector is achievable…
A balanced portfolio of options are required to deliver cumulative emissions reductions in the SDS
Contribution to cumulative CO2 emissions reductions between STEPS and SDS
Source: IEA (2018), The Future of Petrochemicals

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… investment is also growing
Companies and investors are trying to respond to growing consumer awareness and regulatory
pressure on plastic waste
200
400
600
800
1 000
2015 2016 2017 2018 2019
USDmillion
Plastic recycling
CO₂ feedstock
Bioplastics
Other
biochemicals
Investments in alternative feedstock and plastic recycling start-ups

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