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Speaker 1: Hi, I'm Dana Perkins, and you're listening to Switch It

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Speaker 1: on the b F podcast. Petro Chemicals are the building

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Speaker 1: blocks of countless materials and an essential component of the

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Speaker 1: industrial supply chain. They're also one of the largest sources

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Speaker 1: of industrial emissions and a growing source of oil demand.

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Speaker 1: So how do we bring these emissions down? And what

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Speaker 1: are the technologies for decarbonizing? Can we have zero carbon

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Speaker 1: high value chemicals and feedstocks? What is it going to cost?

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Speaker 1: And what are some of the company strategies. These are

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Speaker 1: some of the things my colleagues il Han and c

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Speaker 1: C looked at when writing Decarbonizing petro Chemicals Corporate Strategies

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Speaker 1: and a second research piece titled Decarbonizing petro Chemicals Technologies

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Speaker 1: and Costs. They're both part of a Decarbonizing Industry series

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Speaker 1: we've written. Ilhan Savut writes about sustainable Materials for BENF

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Speaker 1: and C. C. Tang is an oil and petro chemicals analyst. Here.

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Speaker 1: Both of these reports can be read at b NF

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Speaker 1: on the Bloomberg terminal, on BNF dot com, or the

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Speaker 1: b NF mobile app. A quick reminder, B and E

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Speaker 1: F does not provide investment strategy advice and we have

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Speaker 1: a full disclaimer at the end of the show. And

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Speaker 1: now let's speak with Ilhan and c C about decarbonizing

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Speaker 1: petro chemicals. Illan and c C, thanks for joining today

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Speaker 1: to talk about petro chemicals. Thanks for having us to

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Speaker 1: be here. Thanks DNA. So we're going to get to

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Speaker 1: the elephant in the room at a point, which is

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Speaker 1: this hundred dollars of barrel. But before we go there,

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Speaker 1: let's start with some fundamentals because it's important that we

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Speaker 1: all understand what we're talking about here, which is petro chemicals.

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Speaker 1: So what are they and what are we talking about today.

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Speaker 1: Petro Chemicals consist of mainly ethylene, propoline, and aromatics, which

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Speaker 1: we refer to as high value chemicals. So these are

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Speaker 1: some of the most diverse materials in industry. They're using

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Speaker 1: everything from wind turbine blades, two car seats, pains, detergents.

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Speaker 1: Also a massive ndmark it are plastics. So any type

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Speaker 1: of finished product that you can think of probably has

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Speaker 1: a component that's derived from petro chemicals. So ubiquitous they're everywhere,

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Speaker 1: and what is their carbon intensity? So when it comes

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Speaker 1: to petro chemicals, there are two issues. One our scope

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Speaker 1: po emissions, So essentially the emissions that arise during their production,

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Speaker 1: which is mostly done through steam cracking where you take

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Speaker 1: some sort of oiler gas based feedstock, you put it

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Speaker 1: into a steam cracker where you react that feedstock with

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Speaker 1: steam at very high temperatures, and that uses fossil based fuels,

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Speaker 1: So then you have a source of seal two emissions there.

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Speaker 1: But then there's also another aspect to it, and that's

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Speaker 1: because what's and I find it's quite fascinating when we

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Speaker 1: talk about the cartonizing petrick chemicals. Um the petro chemicals

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Speaker 1: themselves consist of carbon molecules, so they're made of carbon themselves,

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Speaker 1: So there are emissions associate did with end of life,

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Speaker 1: such as incineration of plastic waste. So there are two

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Speaker 1: sources of emissions there. But I think it's just important

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Speaker 1: to point out that pet Kim's is one of the

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Speaker 1: major imagers among hard to abate sectors, and demand for

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Speaker 1: petro chemicals are expected to increase significantly over the coming decades.

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Speaker 1: So whatever whichever way you look at it, it's crucial

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Speaker 1: that we decarbonize this sector. So the hard to abate sectors,

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Speaker 1: these are the ones where we don't have the solutions yet,

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Speaker 1: and I guess we'll come to that in terms of

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Speaker 1: some of the solutions that are starting to present themselves.

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Speaker 1: But even within this class of hard to abate, where

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Speaker 1: would you put them? Are they one of the biggest

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Speaker 1: concerns or are they one where you feel like maybe

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Speaker 1: they're going to make their way off of the hard

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Speaker 1: to abate lest soon. In terms of carbon footprint, petcams

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Speaker 1: follow cemented steel closely, and I would say that they're

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Speaker 1: not as hard to abate. So pet Kim's is a

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Speaker 1: bit easier compared to steal and cement. That's actually whatever

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Speaker 1: it presents on decarbonizing petro chemicals. That's actually how I

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Speaker 1: make the audience feel better is talk about the fact

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Speaker 1: that they could be much worse off if they worked

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Speaker 1: in the steeler cement sectors. So you're telling me there's

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Speaker 1: a chance, I'm sure you may age their movie clothes. Okay,

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Speaker 1: here we go. So can we talk about who the

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Speaker 1: players are in this space? Would be really useful to

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Speaker 1: understand if these are the big oil majors that we know,

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Speaker 1: or if this is a really fragmented market. I think

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Speaker 1: there are different types of petcam producers. Some oil majors.

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Speaker 1: They have their petcam segments, the names we are all

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Speaker 1: familiar with, Shell, Exallmobile, and they all have their downstream

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Speaker 1: pecam business, so they used their upstream oil and gas

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Speaker 1: as feed stock to feed into their petrol chemical facilities.

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Speaker 1: And then we have dedicated petrol chemical producers also, I

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Speaker 1: think familiar names like BSF and Doubt. They are not

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Speaker 1: that upstream into oil and gas, but they are pretty

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Speaker 1: focused in petrol chemicals calls from this basic petrol chemicals

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Speaker 1: and specialty petrol chemicals. And then we have the end users,

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Speaker 1: the consumer brands that use this plastics in their products.

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Speaker 1: Il Han mentioned that we are likely to see more

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Speaker 1: petro chemicals in various aspects of our lives in the future,

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Speaker 1: and this is the potentially growing space within the businesses

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Speaker 1: that you've just mentioned. CC. Is this a really growing

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Speaker 1: and strategic part of the business and where does it rank,

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Speaker 1: I guess in terms of their other business activities these

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Speaker 1: businesses look at the future. I think it's very important

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Speaker 1: to all these different types of petrochemical companies because we

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Speaker 1: have seeing growing demand for petrol chemicals, so everyone is

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Speaker 1: investing heavily to boost their capacities, especially for this oil

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Speaker 1: and gas companies they are seeing challenges in other segments

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Speaker 1: of their business. They have challenges from electric vehicles. They

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Speaker 1: are not sell more gasoline as they are now in

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Speaker 1: ten years, so they need to find out a solution

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Speaker 1: for all the oil and gas they're producing, so they

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Speaker 1: or pivot to petrol chemicals. They see it as a

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Speaker 1: like solution for when we hit like pick oil, the

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Speaker 1: oil demand destruction from electric vehicles. That's certainly a space

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Speaker 1: that b ADF does talk about. So let's go to

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Speaker 1: the elephant in the room, the thing that I promised

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Speaker 1: at the beginning. So we have seen record oil prices

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Speaker 1: well over a hundred barrel CC. Can you talk a

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Speaker 1: little bit about what it means for the petro chemicals

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Speaker 1: industry and ill hand, can you talk about what it

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Speaker 1: might mean a little bit on NINT carbonization side. I

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Speaker 1: think high oil prices definitely a pain for the petrol

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Speaker 1: chemical producers. They are seeing much much higher costs because

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Speaker 1: their feedstock, the NAZA and eating they're using are correlated

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Speaker 1: with oil and gas price and now we have like

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Speaker 1: record prices, so they are taking higher cost and the

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Speaker 1: problem here is whether they can pass on this cost

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Speaker 1: to their customers. If they can, then that's not a problem.

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Speaker 1: They still have their margins. But if they cannot, which

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Speaker 1: I'm afraid that's basically the case here in Asia Pacific especially,

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Speaker 1: so if they cannot pass on this additional cost to

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Speaker 1: their customers, they are bearing this pains of higher feast

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Speaker 1: dock cost. The reason why they cannot pass on the

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Speaker 1: cost is because that the competition is really high here.

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Speaker 1: We have a lot of capacity additions from China, from

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Speaker 1: like Asia and also from the Middle East, so we

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Speaker 1: have a lot of producers coming into this field. We

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Speaker 1: also have relatively weak demand. The producers cannot raise their

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Speaker 1: product price alongside with the feast dock price when it

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Speaker 1: comes to the decorbonization aspect of things. So, just to

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Speaker 1: give some context, pet Kim's players have actually made some

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Speaker 1: of the most ambitious net zero targets out there. If

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Speaker 1: we compare it to the other hard to abate sectors,

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Speaker 1: petcamps put players have actually made the most netser targets.

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Speaker 1: So we think that over fifty of petro chemical production

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Speaker 1: capacity is un covered by a net zero target right now.

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Speaker 1: So all these players that are in this market right

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Speaker 1: now that are maybe if if they're integrated players enjoying

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Speaker 1: higher cash flows or pure petro chemical players that are

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Speaker 1: may be suffering from higher feeds prices. So regardless, they're

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Speaker 1: going to have to spend billions of dollars per year

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Speaker 1: between now and to decarbonize their asset bass and reach

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Speaker 1: those net zero bles. So that's just something important to

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Speaker 1: keep in mind. And will discuss a bit more the

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Speaker 1: technology options and where the costs are leader, but there's

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Speaker 1: no other way of looking at this. This is going

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Speaker 1: to require billions of dollars and investments each year going forward.

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Speaker 1: Before we do get into those technology things. Let's just

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Speaker 1: close off, and you know, we could probably sit here

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Speaker 1: and talk about it all day, but for our purposes,

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Speaker 1: what are the inputs? What are the primary inputs they

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Speaker 1: are going into these high prices for the oil space

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Speaker 1: right now because the war in the Ukraine certainly is

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Speaker 1: one of them, but we were seeing these prices going

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Speaker 1: up before that started. I think the market is was

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Speaker 1: already really tight before we have this uh Ukraine walk.

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Speaker 1: That is because after like two years into COVID, we

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Speaker 1: have seeing like oil demand is getting back to pre

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Speaker 1: virus levels, so people are driving, people are even flying more.

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Speaker 1: So we have more demand, but on the supply side,

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Speaker 1: we do not have enough supply coming either from the

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Speaker 1: OPEC producers in the Middle East or from the U

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Speaker 1: S show producers. For OPAC, they're gradually lifting up their

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Speaker 1: supply for shall they have for the show producers, they

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Speaker 1: have more concerns about their supply is coming like slower

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Speaker 1: than demands. So that's why we are having like a

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Speaker 1: tight market before the war, but now currently with a

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Speaker 1: lot of uncertainties around the sanctions in Russia. There's no

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Speaker 1: direct sanction on oil, but the oil sector is self

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Speaker 1: sanctioning themselves. The ship owners are staying away from Russian

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Speaker 1: oil and the refiners are staying away from Russian oil,

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Speaker 1: so we have people are worrying we might lose the

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Speaker 1: supply from the Russia side, So that's another hit from

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Speaker 1: the supply side. Then we are the market is further

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Speaker 1: into on balance. I would say, wow, so they're being cautious.

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Speaker 1: And you mentioned that flights are resuming. I definitely am

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Speaker 1: feeling that I'm seeing people travel worst. I'm glad to

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Speaker 1: know that my personal experience is reflective of what we're

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Speaker 1: seeing in the market, because that's another thing that I

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Speaker 1: know that we track closely is is flights and oil

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Speaker 1: demand coming from that? So let's go into this space.

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Speaker 1: We've established that petro chemicals are hard to baitsa there,

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Speaker 1: that there are some solutions out there, and that it's

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Speaker 1: a growing space of growing source of demand going forward,

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Speaker 1: both strategically for the company's making them, but also in

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Speaker 1: terms of a problem from an emission standpoint. So ill Haan,

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Speaker 1: we're going to need to figure out how we fix

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Speaker 1: it and where shall we start. What aspects of the

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Speaker 1: value chain are these net zero targets. Many of the

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Speaker 1: companies that have made them um and you noted that

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Speaker 1: they're ambitious. What are they looking to address? Just to clarify,

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Speaker 1: they've made these targets for their scope one in Scope

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Speaker 1: two emissions. So we'll talk a bit later about Scope three,

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Speaker 1: but when it comes to Scope one in scope to

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Speaker 1: it essentially comes down to de carbonizing those steam cockers

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Speaker 1: that I was telling you about or coming up with

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Speaker 1: alternative production processes. So I think that's that's a good

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Speaker 1: and simple way of looking at it. So they're kind

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Speaker 1: of two groups of de carbonization technology. Is the first

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Speaker 1: being modifying the steam cracking process, and then the second

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Speaker 1: just alternative commercializing alternative production processes. When it comes to

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Speaker 1: the carbonizing steam cockers is there's some of the more

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Speaker 1: kind of the usual suspects of the carbonization, so things

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Speaker 1: like adding carbon capture and storage, or electrifying the furnaces,

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Speaker 1: so instead of combusting those fossil fuels, you instead electrifier

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Speaker 1: steam cracker and use resistance heating to get those high

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Speaker 1: temperatures of up to a thousand degrees celsius, as well

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Speaker 1: as things like changing the type of feedstock you use.

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Speaker 1: So for example, if you have a NAFTA cracker, you

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Speaker 1: could also switch to bionafta and crack that instead. When

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Speaker 1: it comes to alternative production processes, there's a lot of

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Speaker 1: movement happening there. Geeks like us tend to be a

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Speaker 1: bit more interesting. So there are things like rotodynamic reactors,

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Speaker 1: so that's a new furnace design for example, where you

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Speaker 1: have a rotor that's just moving in place. It's again

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Speaker 1: electrified and it's using the kinetic energy from spraying the

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Speaker 1: little NAFTA particles to get those high temperatures. You also

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Speaker 1: have other electro chemical processes, for example seal two two chemicals. So,

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Speaker 1: as I mentioned earlier, petro chemicals and plastics are made

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Speaker 1: of carbon, so you could actually capture use captured carbon

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Speaker 1: to make these organic molecules. Now for a very short break,

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Speaker 1: stay with us, So new technology innovation. This is definitely

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Speaker 1: something that I think is fun for all of the

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Speaker 1: nerds out there. So how new are these technologies? Because

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Speaker 1: you mentioned at the beginning, you know there's c c

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Speaker 1: U S, which that one has been discussed for a

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Speaker 1: long time, and I know that part of the industry

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Speaker 1: is making progress, but these other things, these I'm not

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Speaker 1: even going to try and repeat the technicals off that

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Speaker 1: you just said that these other technology advancements. Is this

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Speaker 1: all brand new and are there a lot of bets

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Speaker 1: being placed and then we'll see hopefully if one or

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Speaker 1: to emerge or have these also been around for a

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Speaker 1: while and now we're just sort of getting the application

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Speaker 1: in the scale that they needed. It's a mix of both,

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Speaker 1: but in terms of the way that we have to

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Speaker 1: use them to decarbonize a set, it's all relatively new

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Speaker 1: and untested. So we really need to kind of step

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Speaker 1: up and make sure that we're trying these technologies and

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Speaker 1: deploying these technologies commercial scale over the next decade. If

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Speaker 1: we really want to reach those targets. But so far

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Speaker 1: they've been relatively untested. But we're seeing a lot of

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Speaker 1: movement in terms of players trying to kind of bring

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Speaker 1: these technologies to market. So the we that needs to

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Speaker 1: invest in it that they are kind of a couple

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Speaker 1: of different strategies for companies to adapt technology and what

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Speaker 1: is doubts our set to a startup and the other

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Speaker 1: is to build a house. What's actually happening here, because

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Speaker 1: this sounds expensive. One thing that's happening is there's out

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Speaker 1: of collaboration going on. So a lot of the players

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Speaker 1: are kind of coming up with consortia to work together

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Speaker 1: because they're facing the same the same problems, right, So

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Speaker 1: it's kind of a matter of gathering resources, sharing i P.

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Speaker 1: And trying to work together with your peers who are

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Speaker 1: facing very similar, very similar problems. So they're sharing technology, well,

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Speaker 1: the sharing technology ideas. I mean, this is essentially in

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Speaker 1: the race to net zero that is a space where

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Speaker 1: actually we don't have any time to waste in terms

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Speaker 1: of keeping proprietary information to oneself as a competitive edge.

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Speaker 1: Is that what you're actually seeing in the industry that

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Speaker 1: this kind of defies the business competitive logic. I think

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Speaker 1: it doesn't really define the competitiveness side of side of business.

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Speaker 1: It's more players finally realizing that net zero is non

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Speaker 1: negotiable policies around the corner. I mean, if you're not

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Speaker 1: already paying carbon prices, you're you're about to. You're probably

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Speaker 1: already paying carbon prices in many markets, and you're about

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Speaker 1: to start paying them in many more markets. So I

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Speaker 1: think it's just these players finally realizing that it's not

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Speaker 1: a zero sum game. That you can collaborate, commercialize of

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Speaker 1: technology and everyone can be better off for it. It's

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Speaker 1: not a question of well I reached net zero, you didn't.

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Speaker 1: They all have to. They all have to reach net zero.

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Speaker 1: Let's all get there together, Okay. SOE reference GOPE three emissions,

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Speaker 1: and I think that there is definitely a theme emerging

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Speaker 1: across a number of different shows that we've done and

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Speaker 1: switched down when we bring ups three. This is a

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Speaker 1: tough thing for every company because what happens to the

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Speaker 1: stuff that you have made when you, in theory no

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Speaker 1: longer have control over it, at least in the way

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Speaker 1: industries are currently set up. So the Scope three emissions,

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Speaker 1: what talk to me about the scale of the problem

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Speaker 1: for the petrochemical space and what are they facing in

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Speaker 1: terms of trying to wrangle this. Yeah, well, when it

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Speaker 1: comes to SCOOPE three, specifically downstream Scope three emissions, a

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Speaker 1: little of the carbon footprint of these petro chemical products

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Speaker 1: can actually end up coming from those downstream remissions because

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Speaker 1: there's that carbon captured inside the products. What's interesting here

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Speaker 1: is that addressing those downstream Scope three emissions actually fits

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Speaker 1: in very very well with the circular economy because circular

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Speaker 1: economy is actually your biggest tool when addressing those downstream

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Speaker 1: end of life emissions. So for example, instead of incinerating

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Speaker 1: plastic waste and it's releasing that fossil based carbon back

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Speaker 1: into the atmosphere, you could take that stake recycle its

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Speaker 1: that's still a carbon emitting process, but it can be

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Speaker 1: certain types of recycling can be less carbon intensive, so

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Speaker 1: that can help the carbonize your value chain. But at

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Speaker 1: the same time, there are other types of recycling, for

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Speaker 1: example chemical recycling that can sometimes actually increase your carbon footprint,

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Speaker 1: so they're also moving parts. But the circular economy and

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Speaker 1: net zero one area where they intersect are those Scope

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Speaker 1: three emissions. And yeah, like I said, that there's just

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Speaker 1: alto moving parts. Not only on the technology side and

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Speaker 1: the carbon emission side, but i CC mentioned on the

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Speaker 1: market side as well, So the carbonizing petrol chemicals, like

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Speaker 1: kind of sometimes look at it as kind of playing wacam.

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Speaker 1: Whenever you kind of hit one on the head, another

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Speaker 1: problem pops up. But if you kind of stay on

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Speaker 1: top of it, you can it's actually not that heart

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Speaker 1: of a game, constant work in progress, you know. I

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Speaker 1: mentioned that these petrol chemical companies that haven't make sculptree

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Speaker 1: commitment so far, but I think we have seeing some

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Speaker 1: progress on that side because they are collecting data. I

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Speaker 1: think that's the first step before you make Scopes three commitment,

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Speaker 1: because you need company specific data sets to measure your

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Speaker 1: future success, your future improvement. Because currently what they are

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Speaker 1: using for the moment is the industry wide default numbers.

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Speaker 1: With that you cannot measure how one specific company are

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Speaker 1: doing in later years because industry default numbers doesn't change

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Speaker 1: really much over the time. So they are collecting data

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Speaker 1: like BSF and doubt they are saying that we are

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Speaker 1: working with the data side when we get enough data,

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Speaker 1: which it could take long time because of this complexity

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Speaker 1: of their product catalog. But when they have that, I

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Speaker 1: think it's like a more nice transition to their future

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Speaker 1: commitment on Scope three. One of the things that I

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Speaker 1: think is great is that we've got cc now online

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Speaker 1: today from Beijing, so we're trying to cover bit more

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Speaker 1: of the world in terms of the perspective. And this

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Speaker 1: is a global industry, so you're seeing different petrochemicals producers

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Speaker 1: and different parts in the world and invariably definitely being

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Speaker 1: consumed all over the world. And there's the parts of

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Speaker 1: the petrochemical space from an end consumer standpoint that you

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Speaker 1: don't see, but then there's the stuff that we do see,

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Speaker 1: and definitely a rise of groups that are putting a

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Speaker 1: very clear light on waste streams and not wanting to

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Speaker 1: see petrochemical product waste. And so the question here is

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Speaker 1: where in the world do you also see a strong

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Speaker 1: desire or maybe emerging desire is the right way to

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Speaker 1: put it. From policymakers around really addressing this and maybe

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Speaker 1: even putting a little additional pressure on the industry to

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Speaker 1: look at Scope three. For Dumble in China, there are

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Speaker 1: no direct regulations on Scope three saying you, as a

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Speaker 1: petro chemical company, you need to deal with your Scope

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Speaker 1: three missions. We are not there yet, but we have

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Speaker 1: like policy discussions and even policy draft in place talking

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Speaker 1: about the waste problem. And that's also in China's like

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Speaker 1: road map to carbon neutrality. So I think that is

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Speaker 1: definitely gonna help, but it's not like a direct answer

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Speaker 1: to the Scope three. Just to add, I think when

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Speaker 1: it comes to Scope three spent specifically downstream scope to emissions,

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Speaker 1: it's mostly being driven by the circular economy and and

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Speaker 1: and the waste push. So it's it's more being framed,

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Speaker 1: like you said, as a waste problem than than a

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Speaker 1: than an emissions problem, which in the long run indirectly

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Speaker 1: will help the carbonize a share of emissions as well.

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Speaker 1: Now for a very short break, stay with us. So

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Speaker 1: in this space, there are a lot of different avenues

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Speaker 1: that companies can address, and so it may be hard

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Speaker 1: to really define who's succeeding and who isn't. But there

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Speaker 1: are always leaders and laggards, and maybe even if we

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Speaker 1: just look at how ambitious the targets are, can you

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Speaker 1: name a couple of leaders. I won't make you pick

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Speaker 1: laggards because that's just me, and I suppose for today

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Speaker 1: we'll focus on leaders C see, I think we have

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Speaker 1: the same two names in mind. Do you want to

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Speaker 1: say it one? Two? Okay? What makes them leaders? I

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Speaker 1: think they're the ones that have actually, in addition to

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Speaker 1: the targets that they've set, they've also kind of they've

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Speaker 1: made the financial commitments, so they've actually made capex allocation

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Speaker 1: commitments to decarbonize their asset bass which is extremely crucial.

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Speaker 1: As I said before, we're going to need billions of

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Speaker 1: dollars of investment annually to reach those targets. And in

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Speaker 1: the case of petro chemicals and those technologies that I

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Speaker 1: discussed previously, it's especially important because we don't see those

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Speaker 1: technologies necessarily becoming cost competitive with unabated production, so you

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Speaker 1: don't have those similar deep learning curves that we've seen

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Speaker 1: with renewable power, so like solder and wind or with batteries,

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Speaker 1: we don't expect such massive reductions in the cost of

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Speaker 1: net zero production when it comes to petrol chemicals, which

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Speaker 1: makes it all the more important that you follow up

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Speaker 1: with these capex allocation commitments because it's going to cost money,

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Speaker 1: so you kind of have to put your money where

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Speaker 1: your mouth is. And even for the laggers, I would

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Speaker 1: say that I think they will catch up in terms

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Speaker 1: of their commitment or their pledge because some of the

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Speaker 1: targets we have seen by these petrol chemical producers are made,

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Speaker 1: were made like a couple of years ago, and then

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Speaker 1: by then they were worrying about their huge capacity expansion plans.

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Speaker 1: So they say we we will cut our emission by half.

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Speaker 1: But now I think with more and more countries like

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Speaker 1: pledging net zeros within like for a facility within that country,

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Speaker 1: you eventually have to achieve net zero. So I believe

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Speaker 1: they will update their targets very soon. And also we

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Speaker 1: are seeing more and more pressures from the investors side,

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Speaker 1: so they keep keep getting asked, what are you going

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Speaker 1: to do about climate change? How resilient you are even

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Speaker 1: the face of climate change? Do you have any plans?

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Speaker 1: Do you see it as a risk or opportunities? So

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Speaker 1: they need to address these concerns. I think so they

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Speaker 1: will come up eventually, and I think it is safe

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Speaker 1: to say that those who don't have that zero targets,

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Speaker 1: those would be the laggards. Get yourself a target, all right.

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Speaker 1: We've talked about too potentially seemingly unrelated things, but we

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Speaker 1: know that the world is complex and everything really interacts

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Speaker 1: with one another. So the high oil price that we

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Speaker 1: discussed at the beginning and decarbonization efforts, let's talk a

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Speaker 1: little bit about how they're related. I know we touched

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Speaker 1: upon this, but this is a space for me to

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Speaker 1: just sign of understand how you're thinking about the future,

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Speaker 1: given that we don't know what will happen, but we

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Speaker 1: want to see if they're they're going to essentially help

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Speaker 1: or hurt. And the reason I really bring this up

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Speaker 1: is we're seeing in other parts of the commodities space

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Speaker 1: with utilities that coal is having almost a bit of

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Speaker 1: a renaissance at the moment because the high gas prices

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Speaker 1: are having this knock on. So, yeah, is the high

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Speaker 1: oil price helping or hurting decarbonization efforts? So do you

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Speaker 1: think they will in the longer term? In your opinion,

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Speaker 1: The way that oil prices fit in is it's actually

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Speaker 1: a bit more indirectly. So we think that actually when

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Speaker 1: it comes to decarbonization, the integrated oil and gas players

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Speaker 1: might actually be better positioned for decarbonization when it comes

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Speaker 1: to petro chemicals compared to the pure play pet kim's producers,

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Speaker 1: and that's because they just have more resources, and they

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Speaker 1: just have more money, right, so the amount of topics

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Speaker 1: that they can spend that they've already spend on these

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Speaker 1: low carbon technologies can be much much higher than the

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Speaker 1: petro chemicals companies have been targeting to spend. And that

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Speaker 1: just goes back to kind of even when the oil

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Speaker 1: prices are high or even a bit lower, just the

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Speaker 1: amount of resources those integrated players have are pretty massive.

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Speaker 1: So I think it can actually mean that they're better

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Speaker 1: position for decarbonization. Whether they kind of act on that

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Speaker 1: and decarbonize their downstream activities, that's that's another question. I

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Speaker 1: think the higher orl price could also be a push

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Speaker 1: because as we see now days like in Asia, with

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Speaker 1: all the high oil prices, this Asian based can producers,

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00:25:33,000 --> 00:25:36,560
Speaker 1: they are losing money for like six months straight, so

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Speaker 1: that has to push them to think what additional value

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Speaker 1: cannot create then compete in this like very raw capacity

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Speaker 1: competition with all this the new ones. Where is my advantages?

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Speaker 1: I think like the low carbon aspect could be a

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Speaker 1: like a good cutting point because with that you could

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Speaker 1: have have oh like the green premium into that and

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00:26:03,760 --> 00:26:07,480
Speaker 1: you do not need to compete with these low cost producers.

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00:26:07,840 --> 00:26:11,360
Speaker 1: You could have your own advantage, but that's also depending

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Speaker 1: on the consumers willingness to pay for the screen pyramid.

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Speaker 1: I think that's another topic of another podcast. And I

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Speaker 1: suppose that the investors desire, whether or not to put

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Speaker 1: pressure on company is to create these products in a

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Speaker 1: certain way or at least invest in the R and

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Speaker 1: D end of things in order to remain appealing. On

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Speaker 1: the shareholders side, one thing is not all your shareholders

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Speaker 1: are activists investors. You also have to just make sure

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Speaker 1: that you're navigating the space. But there are competing interests.

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Speaker 1: I think that's also important to remembers. Do we have

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Speaker 1: a good feel on the consensus view on where oil

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00:26:48,840 --> 00:26:51,080
Speaker 1: price is going to go? I think the whole market

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Speaker 1: is waiting for more clarity on where the sanctions might

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Speaker 1: go because currently it's just a wait and see attitude.

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Speaker 1: If there is full sanctions or direct sanctions on the

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Speaker 1: energy sector. I know the the government are saying that

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Speaker 1: they are not targeting the the energy sector, but it's

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Speaker 1: I think it's it's hard to say. For the moment.

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Speaker 1: Closing question, what is the coolest technology in your opinion

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Speaker 1: as an industry geek, I'm going to say so to

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00:27:25,480 --> 00:27:28,280
Speaker 1: the chemicals, even though it's very out there and it's

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00:27:28,320 --> 00:27:31,000
Speaker 1: probably never gonna be cost competitive and it will remain

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Speaker 1: a niche technology. Just the potential to make these petrochemical

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00:27:34,760 --> 00:27:39,359
Speaker 1: products into carbon sinks is very exciting, but I'm very

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Speaker 1: skeptical but interested. CC. Is there a technology that you

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00:27:43,480 --> 00:27:49,160
Speaker 1: think is extra interesting? I would think from a business perspective,

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Speaker 1: I would choose like pyrolysis, like that theero chemical recycling,

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00:27:54,680 --> 00:27:59,119
Speaker 1: where you get like the same kind of feedstock but

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Speaker 1: from a risk leve link that can be fit into

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00:28:01,880 --> 00:28:06,800
Speaker 1: your existing facilities. I think that could mobilize more involvement

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Speaker 1: from more companies so they do not need to invest

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00:28:10,480 --> 00:28:13,959
Speaker 1: additionally or massive amount on on on this new technology.

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Speaker 1: If we could have and that they were recycling and

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Speaker 1: get this pyrolysis oil, then that's much easier for for

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Speaker 1: those smaller players to to decarbonize. Excellent. Thank you for

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Speaker 1: joining today. Thank you, Thank you. If you're interested in

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Speaker 1: the things we discuss on this show and think, hey,

485
00:28:37,440 --> 00:28:39,680
Speaker 1: I'd like to be involved in researching some of those

486
00:28:39,720 --> 00:28:42,720
Speaker 1: types of topics are open. Roles can be found on

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00:28:42,760 --> 00:28:46,400
Speaker 1: Bloomberg dot com on the careers page. Just search for BNF.

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Speaker 1: Today's episode of Switched On was edited by Rex Warner

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Speaker 1: of gray Stoke Media. Bloomberg any F as a service

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00:28:54,040 --> 00:28:57,400
Speaker 1: provided by Bloomberg Finance LP and its affiliates. This recording

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00:28:57,440 --> 00:29:00,360
Speaker 1: does not constitute, nor should it be construed as investment advice,

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00:29:00,440 --> 00:29:04,760
Speaker 1: investment recommendations, or recommendation as to an investment or other strategy. Bloomberg.

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00:29:04,800 --> 00:29:07,160
Speaker 1: An e F should not be considered as information sufficient

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00:29:07,200 --> 00:29:10,160
Speaker 1: upon which to base an investment decision. Neither Bloomberg Finance

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00:29:10,280 --> 00:29:13,080
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00:29:13,080 --> 00:29:15,760
Speaker 1: warranty as to the accuracy or completeness of the information

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00:29:15,840 --> 00:29:18,760
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