Masdar explores production of low-carbon polypropylene with Japanese companies

The deal is expected to help reduce emissions in hard-to-abate sectors

The agreement was signed during the Japan-UAE Business Forum in Abu Dhabi and witnessed by Sheikh Hamed bin Zayed, member of the Abu Dhabi Executive Council, and Japan’s Prime Minister Fumio Kishida. Show more

Abu Dhabi’s clean energy company Masdar, Mitsubishi Chemical Group and Japan’s Inpex have signed an agreement to explore production of the world’s first commercial-scale polypropylene made from carbon-dioxide and green hydrogen in Abu Dhabi.

The green hydrogen and carbon-dioxide will be converted to e-methanol, which will subsequently be converted to propylene and polypropylene, Masdar said in a statement on Tuesday.

“Today’s agreement will enable us to join forces and further unlock the potential of green hydrogen to drive industry and growth while reducing emissions,” said Mohamed Al Ramahi, Masdar’s chief executive.

Polypropylene is a plastic material used in the production of common objects like bottles, jars and food packaging. The project will also produce e-methanol, a crucial synthetic fuel that can be used to decarbonise maritime transportation.

Masdar and Inpex also signed a separate agreement to potentially establish a project in Abu Dhabi to produce e-methane.

Both the companies will carry out a feasibility study focused on the entire value chain, which includes hydrogen production, procurement of carbon-dioxide, as well as e-methane production and transportation.

The study will also evaluate the commercial viability of operating a methanation business in the emirate, with a view to exporting the e-methane to Japan. Methanation is the chemical reaction by which carbon oxides and hydrogen are converted to methane and water.

The global polypropylene market, which was valued at $120.94 billion last year, is projected to grow 3.5 per cent every year from 2022 to 2030, reaching nearly $160 billion, according to Statista.

“The chemical industry is now faced with the dual challenge of reducing its [greenhouse gas] emissions, while actively participating and leading the transition to a carbon neutral economy,” said Jean-Marc Gilson, chief executive of Mitsubishi Chemical Group.

“With that focus in mind, our ambition to use CO2 as a key starting raw material is a very important stepping stone towards a sustainable future and we are looking forward to using our expertise to contribute to the success of this project.”

The power and heavy industry sectors accounted for about 60 per cent of annual emissions from existing infrastructure in 2019, with their share expected to rise to nearly 100 per cent in 2050 if nothing is done to address these assets, according to the International Energy Agency.

“We look forward to working together with Masdar and MCG to pursue a green hydrogen to e-methanol and polypropylene supply chain linking the UAE and Japan,” said Takayuki Ueda, Inpex president and chief executive.

“This initiative is fully aligned with our decarbonisation efforts as well as our long-term commitment to Abu Dhabi, which is one of our core business areas.”

The relationship between the UAE and Japan has deepened in recent years and the two countries plan to focus on boosting green energy and investment ties, Japan’s Prime Minister Fumio Kishida said during a speech on Monday.

“Japan will promote the Japan-UAE innovation partnership initiative and the green global energy hub initiative for the Middle East including [for the UAE] to be a global clean energy and decarbonisation hub,” Mr Kishida told the UAE-Japan Business Forum in Abu Dhabi.

Total trade between the two countries amounted to $51.7 billion last year, while non-oil trade exchange reached $14.7 billion, of which non-oil imports to the UAE were $12 billion.

Tokyo is also looking to bolster its energy security by entering into long-term liquefied natural gas agreements and adding more renewable resources to its overall energy mix.

Global competition for LNG cargo is set to intensify this year as China’s economy recovers and Europe stockpiles more natural gas before the next winter.