The Road to the SDGs

PURPOSE X The COVID-19 pandemic has brought unprecedented challenges, with the potential to change the overall structure of the petrochemical industry, especially in MCs that consume or produce petrochemical products. X The report shows how MCs can build resilient petrochemicals value chains for the future. It produces a programming framework that recommends actions MCs should take to create additional capacity, increase their productivity and transform their business models in order to support stable growth and innovation and also: – Become more self-sustaining by reducing dependence on petrochemical imports from non-MCs – Double their value creation by exploring primary and secondary processing and leveraging their access to petrochemical feedstocks such as oil and gas – Create thousands of highly skilled jobs, with positive spill-over effects in education, governance and overall industrial competitiveness. X Over the next decade, demand for petrochemicals is expected to continue to grow. However, to reap the benefits of this growth: – Growth must be accompanied by deeper integration along the value chain and development of a broader product portfolio to increase value creation in the future – Tailored strategies are needed to increase petrochemical value creation across all MCs – Private sector investment and collaboration among IsDB countries will be of increasing importance to foster value creation in petrochemical sectors. METHOD X Despite declining demand for petrochemicals in 2020 due to the COVID-19 pandemic, a growing global population and increasing income levels will drive overall petrochemical demand upward in the long term, according to the report. X In this context, IsDB’s new programming framework for the industry emphasises the following: – Capacity optimisation and efficiency gains should be the focus, as long-term and capital-intensive investment cycles force industry players to concentrate on optimising current processes – End-user industry demand will determine the future of petrochemicals, with changing customer needs and demand from end-user industries causing the sector to become more sustainable Future of the petrochemical industry T he petrochemical sector contributes approximately US$ 5.7 trillion to global GDP. IsDB MCs contribute only 22% to petrochemical output although they hold nearly 60% of global oil and gas reserves IsDB’s ‘Petrochemicals’ report addresses this concern as part of its ‘The Future’ publication series, which forecasts economic trends and emerging global priorities for the benefit of MCs To benefit from the growth in the petrochemical sector, MCs need to move beyond producing base chemicals and commodity petrochemicals, to adding value through secondary processing to produce engineered plastics and chemicals [ 224 ] SDGs