The ethylene oxide market will not be shocked

Author: Yuan Wang Source: China Chemical Industry News November 25, 2019

On November 6, the US Environmental Protection Agency (EPA) announced a proposed regulation aimed at reducing the production of harmful air pollutants by approximately 105 tons/year for organic chemical manufacturers. Among them, the restrictions on ethylene oxide in the proposed regulations are particularly noticeable. According to EPA news, after the regulations are implemented, the emissions of ethylene oxide from chemical plants in the United States will fall by about 9 tons per year. The agency hopes to require facilities to control gas emissions from gas tanks, vents and leaking equipment. The companies involved include BASF, Ineos, Sasol, Shell, Dow, etc.

EPA's tightening of controls on ethylene oxide is carried out against the backdrop of continuous expansion of ethylene oxide production capacity by large companies such as BASF and Ineos. At present, BASF and Ineos are expanding the production capacity of European and American ethylene oxide and its derivatives, with a total expansion of 920,000 tons/year. The new EPA regulations seem to have a huge impact on the ethylene oxide market in the United States and the world.

However, the author believes that the impact of this environmental protection measure on the US ethylene oxide market should not be exaggerated. First of all, the reduction in ethylene oxide emissions to be controlled by this regulation is only 9 tons/year. According to EPA statistics, in 2018, US chemical plants emitted 100 tons of ethylene oxide, of which 42 tons came from fugitive emissions from vents, pumps and valves. For chemical giants such as BASF and Ineos, it is not and should not be difficult to control the emission of harmful gases during the production of equipment, not to mention that the regulated gas emissions are not much.

Secondly, from the point of view of the regulations and implementation procedures for the emission control of ethylene oxide, EPA's environmental protection measures are gradual, not violent. According to the EPA, according to the order of the Federal Court, the relevant regulations will be passed on March 13, 2020. In the meantime, the EPA will hold a public hearing in early December to provide detailed information on the regulations and put forward additional requirements for vents, storage tanks, and ethylene oxide equipment. For companies, the response time cannot be short, which will have a weaker impact on the ethylene oxide market.

The production of ethylene oxide in the United States is concentrated in Baton Rouge and Lake Charles, Louisiana, where pollution is also concentrated. As a class of carcinogens listed by the World Health Organization, ethylene oxide is environmentally friendly and beneficial to the health of local communities, and controlling its emissions is due. In this regard, EPA is already controlling its emissions through robust measures. For the burgeoning ethylene oxide market, this move is beneficial to its long-term development. However, due to the robustness of the new measures, the ethylene oxide market will not suffer a major shock.