The Indian petrochemical industry is on a growth path. Currently serving a market size of about 43 million tons, the industry is expecting to be hitting the 50 million ton size by 2025, a heathy CAGR of over 6%. Unlike its oil & gas cousins, who are finding increasingly competitive alternatives in the form of biofuels and electric vehicles, the end products from petrochemicals still are in a relatively safe zone - for instance, bioplastics globally still comprise less than 1% of total plastics (by weight).
So, one can expect the Indian petrochem sector to have a large footprint in many aspects of India's economy, industry and society.
But as India decarbonizes, the petrochemical industry is staring at the question: How do we decarbonize? Any petrochemical, by definition, is getting carbon out of the ground and into the open. A large portion of the petrochemical industry's carbon footprint is upstream - at the crude extraction and refining stage - and a relatively minor portion comes from disposal. Where the end products - say, plastics - are burned, there is a direct CO2 emission from the sector. Where the end product gets to the landfill, things get a bit more tricky from a carbon footprint viewpoint though landfilling plastics is clearly a poor environmental result.
Some practical ways for the industry to decarbonize in the short and medium terms could be to use more renewable energy for their upstream and mid-stream operations, and enhance energy efficiency measures. But if the industry can add circularity to this basket - specifically, plastics recycling, we have the potential to significantly reduce the footprint as emissions from recycled plastics production are much lower compared to their virgin counterparts.
Plastic recycling in India has had a rather mediocre history so far. This gets even more complicated when you realize that it is very difficult to recycle some types of single use plastics and laminates. The way perhaps for petrochem industry is to forge strong partnerships with the end use sectors (FMCG companies for instance) who through their EPR schemes and local partnerships are able to maximize the aggregation of plastics that can be reycled easily today, and for the future, co-invest in more effective recycling technologies such as advanced chemical/molecular recycling technolies that can recycle any plastic.
