Ineos may close Grangemouth ethanol plant: Update

Spanish Market: Biofuels, LPG, Petrochemicals
19/03/24

Adds details on plant capacity, production and feedstocks in paragraphs two and three

UK-based chemicals firm Ineos has proposed to stop ethanol production at its Grangemouth plant in Scotland in the first quarter of 2025.

The company told Argus its ethanol business at Grangemouth has been "running at a loss" for more than five years, a result of reduced demand for ethanol in Europe and pressure from imports. It declined to comment on current ethanol output from the facility, which has capacity of 340,000 t/yr according to Argus.

Grangemouth ethanol production is based on ethylene supplied from the company's neighbouring 740,000 t/yr ethane and LPG-based steam cracker, with capacity to consume an estimated 214,000 t/yr of ethylene at nameplate production capacity. The closure would swing the ethylene balance at Grangemouth from balanced to long, based on nameplate capacities. The excess could be exported or swapped into Ineos' European ethylene balance, which is short.

Customers "will be offered the supply of ethanol from Ineos' other plant in Herne, Germany," said Ineos Olefins and Polymers chief executive Stuart Collings.

Ineos told Argus that the closure of the plant depends on the outcome of ongoing consultations with its employees and the trade union.

The Argus fob ARA range spot ethanol price averaged around €770/m³ in 2023, compared with €1,020/m³ in 2022. After rising towards €900/m³ by the start of November, the price has now dropped below €700/m³.

Ex-EU imports of undenatured ethanol — required for road fuel blending in Europe — had fallen from the start of 2023 through to the end of the third quarter of that year, to about 811,000t from around 943,000t in the same period in 2022, according to provisional GTT data. The decline was largely attributed to lower ethanol prices in northwest Europe.

By Evelina Lungu and George Barsted

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02/04/25

Brazil SAF industry set to take off in 2027

Sao Paulo, 2 April (Argus) — Brazil's aviation industry is keeping an eye on sustainable aviation fuel (SAF) regulations as the domestic market awaits the kickoff of local production to comply with the planned blend mandate and with potential for exports. The fuels of the future law envisages raising biofuel mix standards to lower greenhouse gas (GHG) emissions in domestic flights over a 10-year period starting in 2027, as Brazil has committed to applying a 10pc SAF mandate by 2037. The country's efforts to implement a SAF mandate runs in tandem with the guidelines from UN's International Civil Aviation Organization (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) program, which oversees GHG reduction in international flights. The program set up two phases until reduction targets are fully implemented, so airlines and producers adapt to changes efficiently. Airlines can voluntarily adhere between 2024-2026, followed by global compulsory targets from 2027-2035, prompting SAF usage or carbon credits compensation. The mandatory phase embraces all international flights, including those from and to non-voluntary countries, except for so-called underdeveloped countries and those with a low share of global air traffic flows. Brazil's SAF is a newborn industry that holds potential for feedstock supply , mostly for its traditional production pathways using soybean oil, corn and sugarcane ethanol, as well as widespread agricultural lands engaged in biomass production without practicing land-use change. Its variability also allows new projects to reuse degraded lands and existing agricultural assets to comply with International Civil Aviation Organization (ICAO) sustainability criteria related to land-use and soil health enhancement. SAF input in Brazil faces economic hurdles as high market volatility weighs on long-term investments, says A&M Infra's management consultant Filipe Bonaldo. But he also says that the political agenda will not hinder the energy transition as has happened in the US under President Donald Trump, since Brazil's economy is heavily based on agriculture its regulatory processes spur optimism. As an agricultural powerhouse, Brazil offers low-cost production and multiple sources to provide demand, both internally and offshore. Brazil is the third largest global exporter in agriculture and livestock markets, leading soy, orange juice and beef markets globally, according to agriculture and livestock confederation CAN. Debut in Rio Brazilian fuel distributor Vibra is the first to offer SAF in Brazil, before the blend mandate comes into effect. The company imported 550,000l (16,000bl) of SAF produced with used-cooking oil (UCO) from the port of Antwerp, in the Netherlands, in January. The biofuel is available for customers at Vibra's facility at the Rio de Janeiro international airport after a 10-month logistics plan was concluded. International Sustainability & Carbon Certification (ISCC) has secured all processes of the plan, from the supply chain of the product to distribution. Vibra operates in more than 90 airports in Brazil and accounts for 60pc of national aviation market share through its sector subsidiary BR Aviation, said executive vice-president of operations Marcelo Bragança. Why it took so long? The sector has long had doubts over the technical feasibility of admitting the use of biofuels in aviation , especially from a security point of view, said Anac's head of the environment and energy transition Marcela Anselmi. The agency, along with oil and biofuels regulator ANP, follow international regulations for SAF as it requires a physical and chemical resemblance to current fossil aviation fuels to ensure flight operations security. It is still not possible to use 100pc of SAF in aircraft motors, said Anselmi. There is a 50pc mix limit that inhibits worldwide adherence as there are technical restrictions yet to overcome. Recent engagement in the energy transition agenda is promoting biomass supply for aviation, as well as road and marine modalities, requiring new production pathways. For example, ATJ uses ethanol to convert it into SAF, which can be expensive to install and implies high capital expenditure. In a global context, Brazil stands in the vanguard of the SAF agenda as Europe and the US have only deployed legislation related to output and consumption over the past two years, Anselmi pointed out. Meanwhile, South America's planned SAF production capacity may reach 1.1mn l/yr in 2030, according to EPE. By João Curi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Q&A: LGE still pushing EU for RLG concessions

02/04/25

Q&A: LGE still pushing EU for RLG concessions

London, 2 April (Argus) — European LPG association Liquid Gas Europe (LGE) continues to push to secure EU and member state support for renewable liquid gases (RLG) such as bioLPG and renewable DME (rDME) while protecting customers of LPG and autogas from policies intended to transition away from fossil fuels. Argus' Dafydd ab Iago and Matt Scotland spoke to LGE general manager Ewa Abramiuk-Lete: What is the EU's latest position on CO2-neutral fuels in road transport? The European Commission's 2023 regulation proposes a framework for registering vehicles after 2035 that operate solely on CO2-neutral fuels in accordance with EU law and climate neutrality objectives. Since then, the commission has been tasked with developing a definition of what CO2-neutral fuels are, but no official information has been released yet. Meanwhile, as part of the broader fuels industry, we've collaborated in a technical group to formulate a definition that encompasses all renewable fuels in line with the EU's renewable energy directive [RED III]. The group's report frequently makes reference to renewable LPG and DME. But will the commission consider anything other than e-fuels? Certain EU commissioners and commission president Ursula von der Leyen have emphasised the need for technological neutrality when revising CO2 standards for cars. The devil is in the details. At this point, there is talk, but we've yet to see any concrete proposals or indications from the commission. We are closely monitoring the current developments in the commission, primarily to determine whether the concept of technological neutrality is being practically implemented and if there is potential for more than just e-fuels and hydrogen. But the push for this concept should originate from member states. Failing to broaden the scope would be a missed opportunity to support a broader range of cost-effective, immediately deployable renewable solutions like RLGs and rDME. When could we find out what fuels are included? A decision may come later this year. Any initiative to reopen or amend EU legislation must come from the commission. Recent intense discussions in the European Parliament about the state of the automotive sector, as well as growing pressure from member states, could be enough to persuade the commission to act. What has been the reaction to the EU's clean industrial deal and state aid rules? We are still reviewing the new state aid proposals. At first glance, RLGs seem to be included. The commission indicates that all fuels compliant with [RED III] — such as bioLPG, biomethane and rDME — are eligible for support. Fossil fuels are generally excluded, with limited exceptions for natural gas under strict conditions. The justification for this is that natural gas is deemed cleaner than more polluting alternatives — an argument that equally applies to LPG. In which direction is the EU discussion on energy taxation heading? The European Council is still finalising the energy taxation directive. The matter lies with EU member states, which must vote unanimously on energy taxation. Progress is being made slowly. The current Polish Presidency of the Council of the EU will need to determine the next steps on critical issues before a consensus can be reached. For LPG, what is at stake is whether RLGs are fairly treated under the new tax framework — and whether the directive allows for differentiation between renewable and conventional fuels, and between business and non-business uses. How will the energy performance of buildings directive (EPBD) affect LPG? A lot is quite technical, but also vital for the sector. One key issue is the inconsistent implementation of the EPBD across EU member states. Guidance documents provide definitions of what constitutes a fossil fuel boiler, which is essential as several member states are preparing to phase out such boilers between 2035 and 2040. A significant question [is whether there will be] recognition of renewable-ready or renewable-compatible boilers, particularly those using bioLPG or rDME. We are analysing how member states are interpreting and implementing these provisions. In Italy, there is strong support for the continued use of bioLPG in heating, but this level of recognition varies significantly between member states. What is the latest on the EU's proposed restrictions on PFAS ? The European Chemicals Agency is conducting a socio-economic assessment as part of the EU's proposed restriction on PFAS under Reach, covering many industrial uses. In the LPG sector, PFAS — particularly fluoropolymers such as PTFE — play a critical role in cylinders, tanks and valves. These materials are essential for preventing leaks in systems that store and transport flammable gases. Some alternatives are being tested — including PFAS-free sealing techniques used by certain companies in Spain — but they are not yet widely adopted or validated across the EU. Promising developments are being made but require further testing to meet safety standards. Your recent RLG Outlook models European RLG output reaching 27.4mn t/yr by 2050 under the policy conditions. Is that not too optimistic given limited progress in the past two years and the dissolution of rDME joint venture Dimeta? While the dissolution of Dimeta was a setback, it does not change the long-term outlook for rDME. Our 2050 modelling shows that Europe could produce up to 27.4mn t/yr of renewable LPG equivalent, of which up to 40pc could come from rDME. The industry continues to see strong potential in rDME, and essential work is progressing on technical standardisation, and safety and blending rules. Our analysis also indicates that sustainable feedstocks are sufficient to fulfil this production potential. Out of 22 production pathways, we examined nine in detail based on a multi-criteria analysis. Only two are fully commercialised at present. This is why we are advocating for co-ordinated policy action — to accelerate commercialisation and mitigate investment risks. Will rDME be a core focus at LGE's Congress in Katowice over 20-22 May? RDME will be one of many key topics at the congress. The event will take place in Poland, drawing strong participation from central and eastern European markets, as well as from further afield, with delegates expected from the US, South America, Africa, Australia and Asia. [LGE] plans to present the RLG Outlook and explore opportunities for scaling up RLG production. In addition, sessions will focus on the role of LPG in agriculture, transport and heating — all critical sectors for the energy transition. Central Europe and Poland will be a core point of discussion, given its significant autogas market and ongoing energy security challenges. We will also address the impact of Russian sanctions on the Polish LPG market, with high-level representatives from the Polish presidency and industry ministry in attendance. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US oil, farm groups push EPA for steep biofuel mandate

01/04/25

US oil, farm groups push EPA for steep biofuel mandate

New York, 1 April (Argus) — The American Petroleum Institute and biofuel-supporting groups told Environmental Protection Agency (EPA) officials at a meeting today that the agency should sharply raise advanced biofuel blend mandates for 2026. The coalition told EPA that it supported a biomass-based diesel mandate next year of 5.25bn USG, up from 3.35bn USG this year, and a broader advanced biofuel mandate, including the cellulosic category, at 10bn Renewable Identification Number (RIN) credits, up from 7.33bn RINs this year, according to three different groups that attended the meeting. Both mandates would be record highs for the Renewable Fuel Standard (RFS) program. Soybean oil futures and RIN credit prices have risen sharply over the past week on optimism that oil and biofuel interests were working to coordinate volume mandate requests for consideration by President Donald Trump's administration. The coalition is also pushing the agency to set a total conventional volume requirement at 25bn RINs, which would keep an implied mandate for corn ethanol flat at 15bn USG. Ethanol groups had previously eyed a mandate even higher, but limits on the amount of ethanol that can be blended into gasoline make much more-stringent requirements a tough sell to oil refiners. The coalition provided no specific request for the cellulosic biofuel subcategory, where most credit generation comes from biogas. Credits in that category are more expensive, but price concerns have been less potent recently given an EPA proposal to lower previously set cellulosic obligations, signaling that future volume requirements can be cut, too. EPA is aiming to finalize new RFS volume mandates by the end of the year if not earlier, people familiar with the administration's thinking have said. EPA officials signaled at the meeting they were working urgently on the rulemaking. "The agency is intent on getting the RFS program back on the statutory timeline for issuing renewable volume obligation rules," EPA said, declining to comment further on its plans for the rule. The RFS program requires oil refiners and importers to blend biofuels into the conventional fuel supply or buy credits from those who do. Under the program's unique nesting structure, credits from blending lower-carbon biofuels can be used to meet obligations for other program categories. One gallon of corn ethanol generates 1 RIN, but more energy-dense fuels earn more RIN credits per gallon. Some disagreements persist While groups at the meeting were aligned around high-level mandates, how administration officials and courts treat small refinery requests for exemptions from RFS requirements could undercut those targets. Groups present were broadly aligned on asking EPA not to grant widespread exemptions, though there is still disagreement in the industry about how best to account for exempted volumes when deciding requirements for other refiners. Groups present at the meeting today included the American Petroleum Institute and representatives of biofuel producers and crop feedstock suppliers. Some groups that previously engaged with the coalition's efforts to project unity to the Trump administration were not present. And some groups more historically skeptical of the RFS and more supportive of small refinery exemptions — including the American Fuel and Petrochemical Manufacturers — have not been closely involved. Fuel marketer groups notably did not attend the meeting after a representative sparred with others in the coalition at an American Petroleum Institute meeting last month. Some retail groups, including the National Association of Convenience Stores and the National Association of Truck Stop Operators, instead sent a letter to EPA today arguing that the groups pushing steep volumes are discounting potential headwinds to the sector from new tax credit policy. Some of the groups advocating for higher biofuel volumes have pointed to high production capacity and feedstock availability, but have preferred to ignore thornier issues like tax credits, lobbyists say. "An overly aggressive increase in advanced biofuel blending mandates under the RFS will be punitive for American consumers" without extending a long-running $1/USG tax credit for biomass-based diesel blenders, the retailers' letter said. That incentive expired last year and was replaced by the Inflation Reduction Act's "45Z" credit, which offers subsidies to producers instead of blenders and throttles benefits based on carbon intensity. Generally lower credit values for biomass-based diesel — coupled with the US government's delays setting final regulations on qualifying for the credit — have spurred a sharp drop in biofuel production to start the year. Without a blenders credit, the RFS volume mandates pushed by some groups could increase retail diesel prices by 30¢/USG, the fuel marketers estimate, a potential political headache for a president that ran on curbing consumer costs. Other biofuel groups say that extending the credit would be an uphill battle this year, with some lawmakers and lobbyists instead focused on legislatively tweaking the 45Z incentive's rules to benefit crop feedstocks instead of reverting wholesale to the prior tax policy. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico GDP outlook falls again in March survey

01/04/25

Mexico GDP outlook falls again in March survey

Mexico City, 1 April (Argus) — Private-sector analysts lowered Mexico's 2025 GDP growth forecast to 0.5pc in the central bank's March survey, down by more than a third from the prior forecast, driven by increased concerns over US trade policy and weakening domestic investment. The latest outlook is down from 0.8pc estimated in February and marks the largest of four consecutive reductions in the median forecast for 2025 GDP growth in the central bank's monthly surveys since December. Mexico's economy decelerated in the fourth quarter of 2024 to an annualized rate of 0.5pc from 1.7pc the previous quarter, the slowest expansion since the first quarter of 2021, according to statistics agency data. Uncertainty over US trade policy has weighed on investment and contributed to the slowdown. Concerns have intensified in recent weeks with US president Donald Trump set to announce sweeping new tariffs on 2 April. Mexico is preparing its response, possibly including reciprocal tariffs, on 3 April. A key concern in Mexico is an expiring carveout to the tariffs for treaties aligned with US-Mexico-Canada (USMCA) free trade agreement rules of origin. Mexico's economy minister said last week ongoing negotiations aim to secure a "preferential tariff," including a continuance of that exclusion and lower tariffs for goods progressing toward USMCA compliance. The median 2026 GDP growth estimate fell to 1.6pc from 1.7pc in February. Analysts again cited security, governance and trade policy as top constraints to growth. Year-end 2025 inflation expectations edged lower to 3.70pc in March from 3.71pc in February. The central bank's board of governors cut Mexico's target interest rate by 50 basis points to 9pc from 9.5pc on 27 March, citing expectations that inflation will continue to slow toward the central bank's 3pc long-term goal and reach 3.3pc by year-end. The board said it would consider additional cuts of that size at future meetings. Mexico's consumer price index accelerated to an annual 3.77pc in February, as slower growth in agricultural prices was offset by faster inflation in services. The target interest rate is projected to fall to 8pc by year-end, compared with 8.25pc in February's survey. The median exchange rate forecast for end-2025 reflected expectations of the peso ending the year slightly stronger at Ps20.80 to the US dollar from Ps20.85/$1 estimated in the prior forecast. The end-2026 estimate firmed slightly to Ps21.30/$1 from Ps21.36/$1. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US propane prices remain firm as stocks fall again

01/04/25

US propane prices remain firm as stocks fall again

Inventories at a three-year low and strong demand for exports supported propane prices this month, writes Joseph Barbour Houston, 1 April (Argus) — US Gulf coast Mont Belvieu propane prices remained elevated relative to crude last month as domestic inventories declined to their lowest since 2022. Mont Belvieu LST propane prices averaged 54.3pc of Nymex WTI crude in March, up by 11.4 percentage points from a year earlierand 4.4 percentage points higher than the five-year March average. US propane stocks typically start to build from March as seasonal heating demand abates — the first stockbuild of the year took place in the second or third week of March in 2021-24, EIA data show. And support for prices from expectations of cold weather had largely subsided by early March, market participants said, with outlooks from the US' National Weather Service forecasting warmer than average weather for the first half of March. But US propane inventories fell for a 23rd consecutive week over the seven days to 21 March, dropping to 43.2mn bl (3.48mn t), their lowest since 29 April 2022, EIA data show. The latest stockdraw was largely because of stronger US exports, which offset weaker domestic demand. Propane exports averaged 1.91mn b/d (4.7mn t/month) in March, up from 1.83mn b/d in February, while domestic sales fell to 1.21mn b/d from 1.45mn b/d. Propane's value relative to crude reached a three-year high of 59.2pc by the end of February as strong heating demand tightened supply in the first half of the month and market participants appeared to cover short positions as it neared its end. Fading interest in prompt supply in March led prices to largely move in lockstep with crude until mid-month, but prices remained strong on tight supply and rose later in the month as buyers returned, peaking at 94.75¢/USG, or 57.6pc of Nymex WTI crude, on 24 March. As a result, propane will enter the summer off-season from its strongest quarter relative to crude in three years. US propane exports could remain high in April on strong petrochemical demand in China given rising production margins and delayed purchases from earlier uncertainty regarding US tariffs. But prices historically ease during the off-season and prompt Mont Belvieu backwardation suggests they could begin to fall soon. Mont Belvieu propane price, US propane stocks Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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