Propy-LENE Supply! Go Green! On-Purpose Technologies for the Future

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Propy-LENE Supply! Go Green!
On-Purpose technologies for the future!
WHITEPAPER | AUGUST | 2012
1
Authors: Virat Venkataraman
Copyright © Beroe Inc, 2012. All Rights Reserved

Copyright © Beroe Inc, 2012. All Rights Reserved 2
Introduction
This whitepaper focuses on the issues concerning the shortage of propylene and its impact
on the industry. Various feasible alternatives are discussed with a major emphasis on the
production of GREEN propylene
Current Challenges and Overview:
Currently, Ethylene (C2) and Propylene (C3) are the two most important olefins in the industry, for the production of
various industrial chemicals and polymers. Both ethylene and propylene are co-produced in crackers and refineries;
however, the ratio of the output depends on the type of feedstock used and the severity of cracking. If naphtha is used
as a feedstock for the production of ethylene, the output of propylene remains substantial, however, gas crackers that
process ethane gas produce more ethylene than propylene. This is becoming the current trend in the market. Most
ethylene manufacturers in the US are currently moving to lighter feeds for the cracking of ethylene, due to improved
margins and feedstock security as there is an abundant availability of shale gas reserves in the region.This is resulting
in a reduced yield of C3, and consequently, the total propylene production from ethylene crackers has been dropping
significantly.
With the demand for propylene outpacing the current supply levels, the supply assurance for propylene has become
challenging.The Propylene prices continue to rise, with the price ratio of ethylene and propylene currently at 1.2, and
if the current situation continues, will reach close to 1.5 in the coming years
Major Impact on the US Propylene Industry:
Naphtha-fed steam crackers and FCC (Fluid Catalytic Cracker) units of oil refineries continue to dominate production,
accounting for nearly 90% of the global propylene production. In both the above said
cases, C3 is produced as a secondary product; furthermore, developments in the
gasoline and ethylene markets complicate the propylene market to a great extent.
• The supply demand gap has already started converging in the US and is
expected to further tighten during the years to come.
• The propylene to ethylene price ratio has been on an increasing trend and the
gap between the two is widening as propylene prices continue to rise.
• The impact of propylene prices are being felt on polypropylene prices and
because of this many end-use segments are contemplating switching to either
HDPE or polystyrene as possible substitutes.
20
40
60
80
100
120
140
160
180
2006 2007 2008 2009 2010 2011 2012
Index
Ethylene: Propylene Comparison in the US
Ethylene Propylene
QuickFacts
Demand for propylene is
expected to grow at an average
annual growth rate of around 5%
until 2015, and around 3% from
2015 to 2020, backed by demand
from downstream derivatives such
as polypropylene, acrylonitrile,
acrylic acid, propylene oxide
etc.
The gap between
propylene and ethylene
prices have been
widening since the
beginning of 2006.
The anticipated
supply shortage of the
monomer has been a
major cause for the
price difference, and
demand from the
polypropylene and
other chemical sectors
have been quite robust
during this period.

Possible Solutions:
In the Asia-Pacific region where refineries still play a
major role in the propylene production dynamics, FCC
represents a major, growing share of the total propylene
capacity. North American and European markets, at
present, have a significant production of propylene from
existing refineries, however, the lack of investment in new
refineries and crackers leave no scope for improvement
for the present scenario. In the Middle East, ethylene
is given more importance than propylene and its
downstream derivatives. Hence, massive ethane-crackers
are being built for the major expansion of ethylene and
other downstream products such as polyethylene. At
present, about 5-10% of global propylene comes from
purposive production techniques.
Since the steam cracker expansion cannot keep pace
with the growth of propylene and polypropylene demand,
various other alternatives need to be looked at for this
purpose and “on-purpose” propylene technologies offer
a solution.
One basic approach, followed by many players in the
industry, is to enhance the FCC unit operation. By
modifying the zeolite catalyst and other operating
conditions in existing FCC units, efficiency of the unit
can be significantly improved, hence increasing the yield
of propylene. The only disadvantage of this method is
that the gasoline production is reduced significantly, i.e.
by nearly 40% of the previous yield. Hence, when the
gasoline demand is high, refiners will not be able to pump
in the required quantities of gasoline into the market.
Lummus and Honeywell are the major firms that are
licensing their proprietary enhanced FCC technologies.
There are other technologies coming up in the market
that provides a more direct solution and is relatively
independent of the current crude oil market situation.
The technologies that are currently prevalent in the
market are Propane Dehydrogenation, Olefin Metathesis
and Methanol to Olefins.
Propane Gas Offers a Solution:
Propane dehydrogenation (PDH) uses propane gas as
a major feedstock. The process employs a fixed bed of
Chromia-Alumina catalyst, to convert the propane gas
into propylene.The main chemical reaction occurs during
the gaseous phase at higher temperature levels (from
around 500 °C up to around 820 °C) which results in an
endothermic equilibrium reaction. PDH started gaining
popularity since the discovery of Shale gas reserves. At
present, there are more than 12 propylene plants around
the world using the PDH technology and a few more
projects are underway. The major PDH licensors in the
market are UOP (Oleflex), ABB Lummus (CATOFIN)
and UHDE (STAR). UOP Oleflex currently holds the
maximum market share among its peers in the PDH
segment.
Ethylene to Propylene: An Interesting
Route
The Metathesis process involves catalytic conversion of
Ethylene and butene-2,for the manufacture of propylene.
Metathesis provides an opportunity to achieve the olefin
interchangeability, by the rupturing of the double bonds
during the reaction and the formation of different olefins,
using parts of the reactants.Olefin metathesis process can
be included in a steam cracker to boost the production
of propylene, using the cracking exchange reaction of
Ethylene and butene-2. ABB Lummus currently licenses
the maximum number of Metathesis units across the
globe.LyondellBasell and Sasol are creating great strides
and taking many more initiatives in the metathesis field.
QuickFacts
Nearly 30% of new crackers that
were commercialized between
2003 and 2010, globally, were
based on ethane and hence
produce very little propylene.

Coal and Natural Gas: The most
effective substitutes
Methanol-To-Olefins (MTO) and Methanol-To-Propylene
(MTP) technologies have an encouraging future for
producers who can get easy access to feedstocks such
as coke, coal and natural gas. Natural gas is used for
the production of methanol, using the Mega Methanol
process. Configuration of the process depends on the
composition of the feedstock which may vary from light
natural gas (100% methane) to oil-associated gasses.
Coal is gasified in a gasifier for the production of syngas,
which is then used in the Mega Methanol process for the
production of methanol, which in-turn is used as a raw
material for the synthesis of olefins.There are a number
of coal gasifiers available in the market, the major ones
being Mitsubishi, Shell, Lurgi, GE etc.
Most Viable Solution:
The most significant of the above methods is the Propane
Dehydrogenation Technology, which already supplies
nearly 5 Million MT of propylene globally. However, the
price difference between propane and propylene acts
as a major factor for the determination of the process
economics, and seasonality plays a major impact, for
example, during the winter season, when the demand for
propane from the heating segment rises; it would not be
that profitable for a propylene producer to use propane
as a feedstock.
A similar case exists for the olefin metathesis technology,
as well, since the price difference between ethylene
and propylene would determine the profitability of any
metathesis plant.
The demand for MTO/MTP is robust in areas where
there is an abundant availability of cheap feedstock
such as natural gas and coal. Coal reserves of Russia,
China and the US would prove to be the major hubs,
going forward. However, the major stumbling block of a
MTP is the humungous investment cost. A gasification
unit that includes the production of syngas through coal,
production of methanol through syngas and synthesis of
propylene through methanol, together would cost close
to 2 Billion USD. A coal gasification/gas reformation
unit for the production of propylene would break even in
about four years six months for an annual capacity of
around 600,000 MT, assuming it runs at around 80%
operating rate.
QuickFacts
Sasol Technology has patented a
heterogeneous auto metathesis process
in which 1-butene is fed over a silica or
tungsten catalyst. 2-butene is formed as
a result of the isomerization of 1-butene,
which further undergoes metathesis with the
rest of the 1-butene, to produce propene
and 2-pentene. 1-butene undergoes self-
metathesis to produce 3-hexene and
ethylene.The ethylene formed undergoes
metathesis with the 2-butenes and
2-pentenes to form more propene.

Introduction to Green Propylene:
Ever rising energy prices coupled with increased emphasis
on carbon emission levels is slowly, but steadily, moving
the world towards the concept of bio-based plastics.When
sustainability becomes the key factor, more emphasis is
given on raw materials that lasts long (supply assurance)
and has minimum impact on the environment, in terms of
emission. As a consequence of the growing demand levels
from downstream sectors, there have been difficulties
and delays in identifying potentially new sources to meet
the demand levels. Bio-based materials are being widely
promoted and marketed as a possible solution to reduce
dependence on crude oil, since; crude continues to be the
major feedstock for most of the petrochemicals.
Depending on the region under consideration, feedstock
can play a significant role in determining the dynamics
of the supply demand of propylene. For example,
synthesis of ethanol can be carried out using a variety
of feedstocks such as sugarcane, corn, sugar beet, wheat
etc. The US is the largest producer of corn and has a
great potential for this route, sugarcane could be a major
option for certain South American countries, and Europe
mostly uses wheat for the production of Ethanol.
The development of gasifiers that uses a variety of
feedstocks, especially biomass, for the production of
syngas plays a major impact in this route. Bio-diesel and
vegetable oils also come in as suitable feedstocks for the
production of propylene.
Bio-based propylene/polypropylene is not biodegradable.
On the contrary, bio-based propylene and PP (once
available) is very similar to the one produced the
traditional way.They possess the same chemical structure
and can be polymerized in the same way.The only major
difference is in the origin of the feedstock. Bio-based
propylene consists of renewable carbon.
QuickFacts
Since the world might be heading
to a shortage of propylene from
conventional sources, more
emphasis needs to be given to
technologies that use renewable
resources such as biomass.

Routes to Green Propylene:
Major Technologies:
There are two technology approaches for the production of green propylene. They are Biochemical and Thermo
chemical. The biochemical approach employs biomass-based sugars for the synthesis of ethanol. Depending on the
availability and the region, a variety of raw materials can be used for the fermentation process. Major commodities
used for this purpose are corn starch, sugarcane, beet etc. Enzymes are used to convert the biomass into ethanol.
Once the ethanol is obtained; they are processed and taken forward for the synthesis of olefins such as Ethylene and
Butene, which further undergoes metathesis for the synthesis of propylene.
CH2
=CH2
+ CH3
CH=CHCH3
è 2 CH3CH=CH2
Ethylene Butene Propylene
Ethanol Dehydration (post the processing of corn) and Butanol Dehydration (Biomass) can be considered as two
possible solutions for the synthesis of green propylene.
The thermo chemical technologies tend to use assorted materials as feedstocks that primarily include biomass
(grass, agricultural wastes, and corn). These carbon rich materials undergo a gasification process in gasifiers for
the production of syngas.The obtained syngas undergoes further processing for the production of methanol (Mega
Methanol is used for this purpose, to achieve better process economics) and then MTP is employed for the synthesis
of propylene.
Bio-diesel and vegetable oils can be used for the production of green propylene as well. Bio-diesel is produced as a by-
product of vegetable oil, and propane gas is produced as a by-product of bio-diesel.This type of propane gas is called
bio-propane and the propane is sent through a Propane Dehydrogenation Unit for the production of propylene.
Sugar
Fermentation
Ethanol
Dehydration
Dimerization
Methanol to
Propylene
Gasification Ecofining
Fluid Catalytic
Cracking
Gasification
Butanol
Dehydration
PDH Recovery Methanol Synthesis
Metathesis Metathesis
Green Propylene
Corn Biomass Bio Diesel Vegetable Oil Biomass

Technology Integration:
Many companies are trying to integrate both the technologies. Combining the biochemical and thermo chemical
processes, would help in achieving greater efficiency in terms of raw material usage. Sugar or starch, depending on
the feedstock employed, can be fermented into ethanol and the remaining cellulosic parts like sugarcane bagasse or
corn straw can be gasified for the production of syngas. Ethanol and syngas can then be used for the synthesis of
propanol, which can be dehydrated for the synthesis of propylene. However, this technology combination has not yet
been commercialized and is still under development. Once commercialized, this might be the best technology around,
since there would be very little raw materials that are wasted and the output of propylene would be significantly
higher.The other advantage of this combination is that, there is always a choice for the feedstock switch whenever a
shortage is witnessed in one of the kind.
Major Factors to be considered
for potential Green Propylene
Producers:
• Region: Selection of the geographic region is one of
the most important factors that need to be considered
for a potential green propylene manufacturer.
• Choice and stability of feedstock: Depending on
the region of construction of the propylene plant,
feedstock needs to be short listed. A potential green
propylene manufacturer in the US would go for corn
or other sources of starch, a player in Europe would go
for wheat, a player in a tropical country would go for
sugarcane etc.
• Infrastructure related details:The details for storage
and processing of raw materials, such as storage
capacity, moisture levels in the storage area, etc. need
to be finalized.
• Selection of the type of technology: Depending on
the choice of feedstock, the technology needs to be
shortlisted. If biomass is used as a major feedstock,
the type of gasifier needs to be chosen.
High Level Process Economics:
For a 200,000 MT/yr. green propylene plant, the
investment of a biochemical based plant is around $400
Million and for a thermo chemical based plant, the
investment exceeds $1 billion. Since the gasifier for the
production of syngas turns out to be extremely expensive,
the cost of investment for a thermo chemical based
plant is accordingly high. Thermo chemical routes are
less affected than the bio route with regard to the raw
material costs, since the cost of corn, wheat and other
forms of starch varies as per the seasonality; and can
witness a shortage if the demand witnesses an increase.
There would be a higher ROI, of nearly 10-12%/yr., using
the thermo chemical method,rather than the biochemical
method, which results in a ROI of around 6-7%/yr.
PropylenePropanol
Dehydration
Propanol
Production
Gasiﬁcation
Sugar
Fermentation
Biomass
Sugar / Starch
Ethanol
Syngas Propanol

Drivers and Constraints of the Green Propylene Method:
Pros
• The properties of bio-based propylene are very similar
to the ones produced in the traditional ways.
• It can be processed using the existing plastic processing
plants.
• The extreme reduction of dependency on crude oil/
natural gas causing a fluctuation in the energy prices.
Supply disruptions have no impact on the propylene
prices.
• The process is clean, extremely powerful and safe
with a great deal of reduction in the levels of carbon
emission.
• For the downstream application, each MT of green
polypropylene produced captures and sequesters 2.3
tons of carbon dioxide.
• Bio-based propylene requires less energy for its
production, compared to its petroleum-based
counterparts.
Cons
• The usage of sugarcane/corn/wheat etc. for the
production of chemical products results in a decrease
in the availability of the staple food in those regions.
• The initial investment cost is slightly on the higher side
as new facilities need to be set up for the synthesis of
methanol from sugarcane, corn, sugar beet etc.
• The companies dealing with green propylene need to
be completely backward integrated, to achieve greater
efficiencies and reduce external dependency.
• Green propylene is effective only in areas that have
an abundant supply of the feedstock, for example, if
a green propylene plant is based on corn, the in-house
capacity of corn must be high so that, the plant does
not depend on imports for their raw material supply.

Latest Movements in the Green Field:
Company Whataretheydoing? ResultsAchieved/Expected
DOW
During the first quarter of 2011, Dow
Chemical announced their intention
to study and explore methods, for the
production of their key feedstock, from
renewable resources. Dow Chemical
is already involved in a project for the
production of ethylene and polyethylene,
by using sugarcane ethanol in Brazil. Dow
Chemicals’ RD team is currently in the
process of investigating various technology
routes for the manufacture of propylene and
its downstream derivatives such as acrylic
acid and other acrylates. More emphasis is
being given to propylene than on PP, since
PP is relatively more commoditized and
also since Dow has completely come out of
the PP business.
A project for the production of propylene,
from renewable feed is expected to be
announced in the near future. However, the
exact route has not yet been finalized and as
of date, an array of raw materials is being
studied as a possible long term feedstock.
The location of the project has not yet been
closed on and Brazil seems to be an open
option.The assignment may be based either
on ethanol or the gasification of biomass.
Dow Chemical also plans to develop second
generation ethanol technologies. Usage of
bagasse and sugarcane waste would be their
first priority.
Braskem
Brazilian giants,Braskem have come up with
the concept of using sugarcane ethanol for
the production of propylene.The essence of
the project was for the production of green
polypropylene. The green polypropylene
would be produced at one of its plants that
use the Spheripol technology. The main
aim of the project was to develop products
using the principles of low-carbon economy.
Braskem has already demonstrated its
capabilities on the green side, by installing a
sugarcane ethanol based ethylene plant for
the production of green polyethylene at its
site located in Triunfo, Brazil. Many major
end-use consumers have already struck
deals with Braskem for the supply of green
PE; the most notable which include PG,
Tetra Pack and Shisiedo.
The basic foundation of the project has
already been laid and the feasibility analysis
has already been done. Constructional
activities are currently underway, which
reportedly began during early 2012; and
by the end of 2013 or early 2014, the
commissioning of the plant is expected.
This would be a small scale plant and the
capacity is expected to be around 30,000
MT/yr.The total investment for the venture
is expected to be at around $100 Million.

Conclusion
Earlier, the production economics of most alternate processes, based on sustainable and renewable materials, seemed
completely out of scope and impossible, however, as the world might be witnessing a shortage of the most commonly
used material, these alternate processes are bound to spring into action to cater to global demand. More emphasis
needs to be given on green production techniques, so as to reduce dependence on the crude oil market
and also reduce the amount of carbon emissions. Production of green propylene can be economically viable
and a suitable option for many players in the segment dealing with propylene and its other downstream derivatives.
However, for someone entering into this segment, it is extremely important to have a clear understanding of the
market situation,based on a careful analysis of its limitations,by narrowing down on geographical locations and most
important of all, the selection of the technology; to avoid strategic and economic losses.
Though the production of propylene through the green route is relatively more expensive than the conventional
method, green propylene provides long term advantages in terms of sustainability and emission control. In the green
MTO process, over 75% of total energy required is biomass derived and this constitutes negative emissions. In the
Sugarcane MTO process, in addition to utilizing biomass derived energy, the sugarcane plant co-generates electricity,
and therefore it is a net energy producer resulting in negative emissions for fossil fuel.
Green production techniques are for the future and by the end of 2020, the world will witness a paradigm
shift that would be relatively independent of the wicked crude oil market.
References:
http://green-plastics.net/discussion/53-general/111-shades-of-green
http://www.innovativeindustry.net/bioplastics-go-commercial-green-polypropylene-from-sugarcane
http://biopol.free.fr/index.php/a-new-unit-to-produce-green-polypropylene-from-sugarcane
Disclaimer: Strictly no photocopying or redistribution is allowed without prior written consent from Beroe Inc.The information contained
in this publication was derived from carefully selected sources. Any opinions expressed reflect the current judgment of the author and are
subject to change without notice. Beroe Inc accepts no responsibility for any liability arising from use of this document or its contents.
For more information, please contact info@beroe-inc.com.
Author:
Virat | Senior Research Analyst

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