The Road to the SDGs

T H E R O A D T O T H E S D G s | P R O G R E S S A N D A C H I E V E M E N T S – Access to key feedstock remains key to success for MCs operating in the petrochemical sector. X Overall, IsDB recognises three major challenges for the sector: – Volatile raw material prices and market environments – An innovation gap in sustainability – Tightening regulations. X Despite their strategic advantage when it comes to feedstock access, many MCs risk missing out on opportunities to add value in the sector. Below are some of the key factors that shape IsDB’s new programming framework: – MCs’ limited capabilities in primary and secondary processing can be boosted by stronger domestic demand – Overall, end-user industries will see demand increase, providing MCs with new opportunities to shape their petrochemical industry – Demands for sustainability are increasing, but fossil feedstock such as from oil and gas will continue to dominate – Bio-based materials are gaining in importance due to MCs’ need to meet their environmental obligations and achieve their targets under the SDGs. POTENTIAL IMPACTS X The new programming framework documents a variety of different positive outcomes for MCs engaged in the sector: – While some are ready to move into high-value speciality chemicals, others should focus on opportunities to create the most favourable conditions under which to grow their petrochemical industries – Countries with little access to feedstock can focus on attracting secondary processing – Many MCs can leverage the advantage of feedstock access to add value at the higher end of the petrochemical value chain – All MCs can act in the two dimensions of domestic demand and vertical integration to drive their petrochemical activities forward – Countries will benefit from taking action to improve education, governance, resources and job creation to sharpen their comparative advantage in petrochemicals. X The industry has the potential to drive smart and strategic investments along the lines of the following priorities: – Countries can enhance their competitiveness by investing in the required infrastructure for the export-driven petrochemical industry – The investment needed to improve the petrochemical infrastructure in MCs requires collaboration between national agencies and international donors – The key to attracting petrochemical players in MCs is to foster local end-user industries as petrochemical production strives to stay close to sources of demand – Stimulating industrialisation in MCs can attract end-user industry demand, leading to growth in the local petrochemical industry – Investment in a skilled workforce is a vital aspect of building a petrochemical industry, with technical and vocational education and training aligned with the needs of the petrochemical industry – Financing opportunities and intercountry collaboration can give MCs a comparative advantage. INVESTMENT X IsDB increased its allocation towards the new programming framework to 40% of its Annual Operations Plan in 2021 and will gradually increase it to 80% by 2023. M E M B E R C O U N T R Y A C T I O N MCs will benefit from taking action to improve education , governance , resources and job creation to sharpen their competitive edge in petrochemicals [ 225 ]