Toothbrushes, grocery bags, food packaging, computers, clothes, or furniture. Did you know that many products we use daily come from a common industry branch? Keyword: petrochemicals. Many petrochemicals such as plastics, rubber, rubber, and fiber are the raw material for countless industries today. These products are used in many industries, including automotive, electricity, electronics, agriculture, packaging, textiles, medicine, paint, construction, detergents, and cosmetics.
In a sense, we wouldn't be wrong to suggest that we live in a petrochemical-dependent world.
So, what are petrochemical products? What are these products' share in our country and the global economy? What kind of change awaits us in the future? Let us look more closely at the petrochemical industry.
What are the leading petrochemicals worldwide?
Petrochemical products include chemicals derived from petroleum products such as ethane, naphtha, natural gas, and their derivative polymers. These products comprise a wide range of raw materials such as plastic, rubber, fiber, and other organic intermediates. About 90% of the demand for raw materials in chemical production is obtained here. Also, 14% of the total primary demand for petroleum and 8% for natural gas are petrochemical products.
There is no doubt that plastics make up the most well-known material group in the industry. Not only are they well known, but they also constitute by far the fastest-growing group of products in bulk materials. They are widely used in transportation, preservation, and consumption, especially in the global food market. Plastic packaging, on the other hand, accounts for the largest share of global plastic demand, with a share of 36According to the 2018 International Energy Agency (IEA) report, plastic demand has nearly doubled since the early 2000s.
Another essential product is fertilizer. Fertilizers are used to increase the absorption of nutrients plants need and are critical to crop performance and reliability in agriculture. Today, synthetic nitrogen fertilizers account for almost half of the world's food production.
Petrochemical products are used in almost all consumer goods, from medicines to electronic and medical devices, toys to kitchen products, clothes, carpets, furniture, and decorative items.
What is the situation in Turkey?
According to the latest Ministry of Industry and Technology report, Türkiye ranks 44th in petrochemical product sales worldwide. In this regard, we can say that Türkiye has the potential to develop in the market. 35% of petrochemical products imported to the country are intermediate goods such as plastics, rubber, and fibers. Of these, 11% of the domestic demand for plastic and 27% of the need for fiber are covered by domestic production. Almost all the demand for rubber is imported from abroad.
Given the current situation, investing is critical to reducing Türkiye’s account deficit. In this way, the security of domestic production supply will be assured, and the establishment by the country of a strong economy that is not dependent on foreign sources will also be supported. Petkim, one of our group companies, is on its way to becoming a leading force in the sector by meeting 16% of Turkey's petrochemical raw material needs. Operating in Aliaga, Izmir, Petkim retains its potential to attract foreign investors by utilizing its advanced regional facilities such as ports, dams, and power plants.
Another group company, STAR Refinery, produces naphtha and xylene and reformate critical raw materials for the petrochemical sector and petroleum products such as diesel, jet fuel, LPG, and petroleum coke essential items in the current account deficit. Today, STAR Refinery, which meets approximately 25% of the need for processed petroleum products in Turkey, plays a critical role in reducing the import dependency of the industries that feed on petrochemicals.
How does the future of the petrochemical industry look?
High-income countries consume up to 10 times more fertilizers and 20 times more plastic per capita than low-income countries, according to the latest 2018 report by the International Energy Agency (IEA) on the future of petrochemicals. This points to significant global growth potential in the petrochemical industry. A further considerable sign is a difficulty of producing alternative raw materials for the petrochemical sector. Therefore, when economic growth, population growth, and technological advances are considered, demand for the petrochemical industry will increase even further.
One of the factors supporting the development of the petrochemicals industry is the increasing interest in a sustainable future. Many parts of the modern energy system are derived from petrochemical outputs, including solar panels, wind turbines, batteries, thermal insulation in buildings, and electric vehicle parts. This means that active growth in the green energy market also feeds the petrochemical industry.
To sum up, it is difficult to imagine a world without petrochemicals. The petrochemicals that drive many industries will stay with us for a long time. However, green chemistry studies, carbon capture technologies, recycling methods, zero waste practices, and increasing investments in producing environmentally friendly chemicals bring new alternative market opportunities to the petrochemical industry.