As EU bans Russian refined products, Russian fuel oil/VGO are heading east

The European Union's full embargo of Russian oil products came into effect on Feb. 5, but data from traders and Refinitiv show that the bulk of Russia's fuel oil and vacuum gasoil (VGO) is already being shipped to other regions, mostly in Asia, said Hydrocarbonprocessing.

In January, less than 5% of Russian fuel oil and VGO was shipped to EU countries, including some 100,000 t to Agioi Theodoroi in Greece, about 80,000 t to the Latvian port of Ventspils and 30,000 t - to the Italian port of Augusta. "No need to say, that`s easy enough to divert those remains to the other destinations," one trader said.

The EU began restricting imports and transit of some fuel oil from Russia six months ago, under custom code 2707, with a full ban coming into force this month, in response to the dispute in Ukraine. The Group of Seven (G7) industrialized nations has also imposed a price cap on Russian fuel shipments.

In response, traders have diverted cargoes to Asia and the Middle East and increasingly used ship-to-ship (STS) loadings to transport their oil. In December and January total Russian exports of fuel oil and VGO were about 4.2 MMtpy-4.5 MMtpy each month.

According to Refinitiv data, Russia exported more than 0.8 million t of fuel oil in December 2022 to India, which buys the oil products to process at cokers in its refineries. In January 2023, fuel oil shipments from Russia to India totaled at least 0.5 MMt.

STS loadings near the Greek port of Kalamata, which is one of the main destinations for Russian fuel oil and VGO exports, surged to 8.2 MMt in 2022, up from 1.4 MMt in the previous year. In January 2023, Russia sent 0.5 MMt of dirty oil products to STS near Kalamata. Traders also use STS loadings in Skagen (Denmark) and Ceuta (Spain). Large volumes of fuel oil and VGO from Russia were also diverted last year to Singapore, Malaysia, China, Emirates, Turkey, Senegal and South Korea, Refinitiv data shows.

We remind, Russian energy minister Nikolai Shulginov on Friday said there was no reason for a sharp reduction in the country's petroleum products output in response to a European Union embargo. Interfax cited Shulginov as saying that Russia was not considering rescheduling maintenance works at refineries because of the embargo and that the price of Russian gas supplies to Belarus in 2023 would remain at the same level set in 2022.
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The recent announcement of the European Commission’s new EU-wide rules on packaging has divided opinions, said Recyclingtoday.

Starting with “leaked” reports ahead of the announcement last November, we had nongovernmental organizations (NGOs) on the one hand pressing for ambitious targets to drive our carbon footprint down and industry cautioning against unachievable goals that would depress rather than drive the sector forward.

It is indeed a fine balancing act, however, the one fundamental goal we need to keep in mind is that we must not, at any cost, exceed our carbon budget. To do so would push our already precarious climate system overboard. According to an assessment presented at COP27, our remaining carbon budget to stay under 1.5 C temperature increase is 380 billion metric tons, or less than a decade of emissions at the present rate. This means emissions must be drastically reduced.

With that in mind, we need to take the macro view and consistently opt for systemic changes across every facet of our lives that are achievable and, vitally, keep us within a safe carbon range.

The Packaging and Packaging Waste Directive’s (PPWD’s) proposed measures would bring greenhouse gas emissions from packaging down to 43 million metric tons compared with 66 million metric tons if we continue with business as usual. These measures are one of the many transformational steps we need to take as we continue developing innovative technologies to move humanity back from the brink.

PET, or polyethylene terephthalate, which is plastics’ most resounding success story so far, is well within range of these new targets set at 30 percent recycled content by 2030 moving to 50 percent by 2050.

Food-contact plastic packaging’s targets, on the other hand, reflect the belief that these are one of the more challenging materials to recycle back into food-grade resins. Now that we have the technologies to achieve this, however, the 10 percent target set for 2030, shifting to 40 percent by 2040, should be achievable and would mean we will be closing the loop on some 400,000 tons of food-grade plastic per year.

We remind, Repsol has announced an investment of EUR26m to start a new production line (Reciclex range) for recycled plastics at its Puertollano Industrial Complex in Spain. Expected to start in Q4 2024, the new line will have the capacity to manufacture 25,000 tons of recycled plastic per year, which is almost double the current capacity of 16,000 tons.
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Lotte Ineos Chemical is planning to build a new 250,000-tpy vinyl acetate monomer (VAM) plant in Ulsan, South Korea, said Hydrocarbonprocessing.

The company will increase VAM production capacity from the current 450,000 tpy to 700,000 tpy with the addition of a third VAM plant. The new plant is scheduled to start-up by the end of 2025.

VAM is widely used for everyday products such as food packaging, solar panels, windscreens, polarizing films, adhesives and paints. In recent years VAM demand has increased significantly to meet global solar power generation. Lotte Ineos Chemical has purchased additional land next to the existing plant in Ulsan for the construction of the new VAM plant, and has begun the front-end engineering design (FEED) work with Lotte Engineering & Construction.

David Brooks CEO Ineos Acetyls said: "The Ineos Lotte team in Ulsan have a very strong record in delivering projects safely and on time. This investment, using well proven Ineos technology, will support our customer growth plans in North East Asia and globally."

We remind, Lotte INEOS Chemical, a subsidiary of Ineos, plans to shut down production at Vinyl Acetate Plant №1 (VAM) in Ulsan (South Korea) on 23 March for scheduled maintenance works. The maintenance works at this enterprise with a capacity of 200,000 tonnes of VAM per year will last approximately 25 days.

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European Bioplastics (EUBP), the association representing the bioplastics industry in Europe, is pleased to announce the appointment of Roberto Ferrigno as Head of EU Affairs, said Plasticker.

He assumed his position on 1 January 2023 and will be based in Brussels. He will also head EUBP’s new Brussels office to be opened on 1 February 2023.

European Bioplastics and its members are happy to welcome Roberto Ferrigno as part of the EUBP team. Bioplastics have become an increasingly important topic in the debate of the European Union’s efforts to achieve its ambitious climate goals. “Roberto perfectly fits into the EUBP team, into this group of proven experts when it comes to biobased and compostable plastics” says Stefan Barot, Chairman of EUBP.

“He’s already been working within the bioplastics industry for a long time and brings with him many years of experience in Brussels. I have no doubt that he is the right person to represent our industry’s interests in the capital of Europe at this crucial time”, he adds.

We remind, Teijin said that it has started producing and marketing biomass-based polycarbonate (PC) resin products at the company's Matsuyama and Mihara production sites. "Beginning on 30 January, Teijin... has started producing and marketing biomass PC resin products containing bisphenol A (BPA) made from biomass naphtha that was tracked with the mass-balance approach as well as the conventional PC resin products using petroleum-derived raw materials," the company said in a statement.

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Lyondell Basell Industries said on Friday it plans to operate its Houston oil refinery, which is scheduled to close by the end of this year, at about 85% of its 263,776 bpd capacity during the first quarter, said Hydrocarbonprocessing.

During a Friday conference call to discuss fourth-quarter results, Kimberly Foley, executive vice president of refining, said the company is evaluating the most efficient scenario to permanently close the refinery at the end of this year.

"We're working through the detailed plans of how to do that," Foley said. "You can do that with a slow ramp down or are you going to do that by just pulling the plug on the 31st (of December)."

Lyondell announced last year the refinery will be permanently closed by the end of 2023. It chose to close the refinery, which is no longer essential to produce feedstocks for its plastic production plants, after failing to find a buyer.

The company said the refinery ran at 85% of capacity in the fourth quarter of 2022 due to a Dec. 23 plant-wide shutdown in frigid weather and other unplanned outages earlier in the quarter.

Foley said the 2-1-1 crack spread for Maya crude oil has risen to USD50 a barrel in the first quarter of 2023, from USD48 a barrel in the fourth quarter last year. Foley also praised refinery employees for their safety performance last year.

"I would like to recognize our team at the refinery for finishing the year with zero recordable injuries in 2022," Foley said. "This is the first time such a record has been achieved in the 104-year history of this facility."

We remind, LyondellBasell announced it has signed the first two European renewable electricity power purchase agreements (PPAs) and two additional PPAs in the United States. The combined additional contracts represent a total of approximately 560 megawatts (MW) of renewable energy capacity. LyondellBasell has now signed eight PPA agreements and achieved over half of its 2030 target to procure a minimum of 50 percent of global electricity from renewable sources.

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