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1,4-Butanediol capacity expands once again– Oh no, more BDO! (But at least this new stuff will be green.)
12 July 2021Dr. Jeffrey S. Plotkin
1,4-Butanediol (BDO) is a highly versatile intermediate capable
of undergoing a number of types of chemical reactions leading to an
even wider range of useful products including polyurethanes,
engineering resin PBT, spandex intermediate PTMEG, NMP solvent, and
polyvinyl pyrrolidone (PVP), a water-soluble polymer used in
various personal care and pharmaceutical applications.
Cargill and Helm have recently announced their intent to jointly
build a 65,000 metric tons per year plant to make green 1,4-BDO
using renewable feedstock at Cargill's corn refining site in Iowa.
Genomatica is supplying the technology to convert sugars to BDO.
This will be Genomatica's second such license with the first being
operated by Novamont in Italy since 2016.
This announcement reminds me of what a fascinating and
up-and-down story the BDO business has been over its history in
terms of its invention, process technology evolution, early
commercialization, market development, and now maturity. The
business has transitioned through many phases: pre-World War II
German monopoly, post-war duopoly, mid-life oligopoly, and now a
significantly over-supplied market as technology barriers have been
smashed. However, the twist of green offered by Genomatica and its
licensees is the first new approach for making BDO since the
late-1990s as the tale continues!
Invention and Early Commercialization:
1930s-1950s
The first approach, commercialized in the 1930s, for making BDO
was based on acetylene. This technology is known as the Reppe route
as it was developed by Dr. Walter Reppe of BASF. In this approach,
two equivalents of formaldehyde are added to acetylene followed by
stepwise hydrogenation of the resulting 1,4-butynediol. While the
development of this chemistry was a terrific achievement, the real
challenge was safely scaling this up as acetylene has a propensity
to detonate at high pressures. But BASF was up to the challenge and
built the first acetylene-based plant in Ludwigshafen in the late
1930s.
At this point, BASF was the only company in the world in
possession of this technology. That is both good and bad. No
competition is good, but potential customers have the security of
supply concerns buying a new material if there is only one plant in
the world making it. To rectify this situation and broaden their
geographic reach, BASF had previously established a facility in the
U.S called American IG which later underwent a name change to
General Aniline and Film (GAF) as they bought and merged an aniline
plant and a film business. However, during WWII the U.S. government
confiscated GAF.
Importantly, this gave American-owned GAF access to Reppe
patents and know-how for making BDO, ending BASF's monopoly.
Shortly thereafter, DuPont independently developed the same
approach using acetylene and the business was on its way to
oligopoly.
The Reppe Barrier Falls: 1979-1998
The first non-acetylene-based route to BDO was commercialized in
1979 by Mitsubishi Chemical. The Mitsubishi approach is based on
acetoxylation of 1,3-butadiene followed by hydrolysis. This opened
the path to other new approaches as many companies wanted to
participate in this very profitable (at the time) business.
In 1990, Arco Chemical (now part of LyondellBasell) developed a
route based on propylene oxide. Then, shortly thereafter in the
mid-1990s, two different groups, BP Chemical and Davy (now part of
Johnson Matthey), independently developed routes to BDO based on
maleic anhydride (MAN) or its derivative dimethyl maleate (DMM). BP
built a plant in Ohio (now owned by Ashland) while Davy licensed
plants around the world. Dairen, a Taiwanese company, developed a
twist on the Arco technology and, in 1998, built a BDO facility
using allyl alcohol as feedstock.
By 2000, despite new entrants and the
development of several non-acetylene-based process routes, the BDO
business was still relatively healthy with supply and demand in
good balance for the most part. Only 13 producers were in the
business with the top three players still being the original or
legacy Reppe producers- BASF, Invista (formerly DuPont assets), and
Ashland (the former GAF assets).
Chinese Producers Overwhelm the Market - The Return of
Reppe: 2001-2021
While up to 2000, the BDO business had expanded quite a bit with
new entrants and new technologies, there were no Chinese producers.
However, this changed starting in 2001 - big time! From 2001 to
2021, Chinese producers added an astonishing 2.3 million metric
tons of BDO capacity in this 20-year time period. And talk about
going "back to the future"—about 90% of this Chinese capacity
is based upon the historical acetylene-based Reppe route.
The problem is that total global BDO capacity stands a shade
under four million metrics per annum while global demand is
estimated to only be about 2.5 million metrics per
year—obviously a significant supply overhang. Exacerbating the
business' issues is the fact that much of BDO demand is captive or
tied up in long-term supply contracts causing this supply overhang
to compete for a relatively narrow merchant market. The good news
for Cargill, Helm, and Novamont, the "green" BDO they are making or
planning to make will differentiate their product, both in terms of
market pull and premium pricing, hopefully making their ventures
successful and launching yet another phase in BDO's fascinating
life cycle!
For additional Petrochemical information, check out some
of our training courses on IHS Markit's Learning Center
at:OMDC
TRAINING
Posted 12 July 2021 by Dr. Jeffrey S. Plotkin, Vice President of Training & Education, IHS Chemical
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