HOUSTON (ICIS)–A federal appeals court has vacated the reciprocal switching rule enacted by the Surface Transportation Board (STB) last year, saying the agency exceeded its authority. Reciprocal switching is when a railroad that has physical access to a specific shipper facility switches rail traffic to the facility for another railroad that does not have physical access. The second railroad pays compensation to the railroad that has physical access, typically in the form of a per car switching charge. As a result of the arrangement, the shipper facility gains access to an additional railroad. The STB said its rule was a remedy for poor service. After the STB approved the rule, three major railroads – Union Pacific (UP), CSX and CN – filed a challenge in the court, saying the rule was unlawful. The US Court of Appeals for the Seventh Circuit said in its decision this week that the performance standards in the rule were arbitrary, capricious and unsupported by the record. The court granted the petition to vacate the rule and sent it back to STB for further action. The chemical industry has generally been in favor of reciprocal switching and submitted statements in favor of the rule. Jeff Sloan, senior director of regulatory and scientific affairs at the American Chemistry Council (ACC), said the ACC was disappointed with the court’s ruling, but not overwhelmed. “When the rule was adopted, we felt it was too limited and would have limited benefits for chemical shippers,” he said. “But it is still disappointing that – even if you know this very limited attempt to increase access to competitive rail service – has been denied by the court.” Sloan said the STB has authority to use reciprocal switching in two ways – when it is in the public interest, and when it is necessary to promote competition. “We felt the better approach was for the board to use the tools that Congress gave it to promote competition more broadly,” Sloan said, “and I think this decision confirms that.” The rule was passed under the previous presidential administration, and Sloan said he sees nothing that would indicate the current administration is likely to oppose the rule if it was based on promoting competition. “The administration has issued a number of executive orders on regulations, and they have asked the agencies to focus on regulations that are anticompetitive,” Sloan said. Sloan said it is still too early to predict the path forward. “We would strongly urge the board to look at the options it has to use its statutory authority to promote competition,” Sloan said. The chemical industry is one of the largest users of the freight rail system, and it relies on efficient, reliable, competitive railroads to meet its transportation needs. “When it falls short, it is harmful to US chemical producers,” Sloan said. Eric Byer, president and CEO of the Alliance for Chemical Distribution (ACD), said he respects the court’s decision while urging the STB to work toward providing shippers with a meaningful reciprocal switching remedy. “The STB’s original goal, to address inadequate rail service and provide more competitive access, is both necessary and long overdue,” Byer said. “In recent years, widespread rail service challenges have exposed critical vulnerabilities in the freight system, and the chemical distribution industry continues to face the consequences of limited-service options and poor reliability.” Railroads are vital to the chemicals industry as chemical railcar loadings represent about 20% of chemical transportation by tonnage in the US, with trucks, barges and pipelines carrying the rest. Canada-based chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail. About 80% of Canada’s chemical production goes into export, with about 80% of those exports going to the US.

SAO PAULO (ICIS)–Brazil’s trade group representing chemicals producers Abiquim has expressed concern over US President Donald Trump’s threat to impose 50% tariffs on Brazilian exports, calling for technical dialogue to resolve the dispute. In a written response to ICIS, Abiquim said the issue holds major relevance for the chemical sector, not only due to direct exports to the US but also because the industry supplies key inputs to export sectors including food processing and pulp and paper. The Brazilian chemical sector runs a significant trade deficit with the US, importing approximately $10.4 billion, while exporting just $2.4 billion in 2024, said Abiquim. The resulting trade deficit in favor of the US stood at $7.9 billion – by volume, the deficit totaled 6 million tonnes, said Abiquim. US petrochemicals subsectors such as caustic soda, polyethylene (PE), or acetic acid, among many others, export in large numbers to Brazil and could be greatly affected if Brazil retaliates to the tariffs in kind. “The chemical industry advocates treating international trade relations exclusively on the basis of mutual economic gain and the free market, following the rules of the World Trade Organization (WTO). In a scenario subject to political interference, we believe that technical dialogue is the best way to resolve this issue,” said Abiquim. “Both sides are at risk of losses, as they are important markets for each other’s exports. Therefore, negotiations are necessary to avoid potential losses for all parties involved.”

This summary was created by ICIS hydrogen editor Jake Stones and ICIS policy and regulation analyst Aayesha Pathan UPDATED: This analysis was updated to provide greater clarity around the total emissions allowance for low-carbon hydrogen instead of the emissions reduction required. LONDON (ICIS)–On 8 July 2025, the European Commission published its much-awaited delegated act for low-carbon hydrogen, opening the door to regulated low-carbon hydrogen production via natural gas with carbon capture and storage technology. ICIS has produced the following summary of the delegated act and details provided in its annex as a means of supporting the market.

LONDON (ICIS)–The biodiesel market looks poised for lower supply if UK-based fuels supplier and distributor Greenergy finalizes new plans to shut its UK biodiesel site in Immingham announced on Thursday. Greenergy began consulting to cease operations at its biodiesel plant, according to a company statement.  This follows a strategic review to evaluate the plant’s commercial viability in May, when production was halted. “In light of continuing market pressures, we unfortunately do not have enough certainty on the outlook for UK biofuels policy to make the substantial investments required to create a competitive operation at Immingham,” Greenergy said in its statement. The drop in supply as a result of the plant’s potential closure may not necessarily ease market conditions though. This is mainly because of a steady flow of biodiesel from the US. UK biodiesel producers are facing sustained headwinds, as lackluster domestic demand collides with a surge in tariff-free imports from the US and heavily subsidized supplies from China, further undermining market competitiveness. European major Trafigura acquired Greenergy’s European operations in March 2024. Greenergy’s CEO, Adam Trager said he was looking to have “urgent talks” with the government on a higher quota of biofuels in UK petrol and diesel consumption. This would support demand in the biofuels sector, in particular biodiesel. Biodiesel, which can be derived from vegetable oils, animal fats, or other waste-based bio-feedstocks, is used as fuel in diesel engines.

LONDON (ICIS)–Petrochemicals will remain a key component of oil demand through to 2050, according to the latest forecast published by OPEC on Thursday. Petchem demand set to rise by 4.7m barrels/day by 2050 Increasing GDP and non-OECD populations drive increase Regulatory, environmental concerns pose challenges to growth The World Oil Outlook forecasts that demand from the petrochemicals sector will significantly increase, by 4.7 million barrels a day, from 15.5 million barrels/day in 2024 to 20.2 million barrels/day in 2050. The sector is set to account for 16% of total oil demand in 2050, from 14% in 2024, with 90% of that growth coming from the Middle East and China as new capacity comes on stream. Petrochemicals demand for oil will predominantly be as a feedstock, as more competitively priced fuels such as natural gas remain viable alternatives. While natural gas and biomass are expected to increase their shares as a source of feedstock, naphtha and liquefied petroleum gas (LPG) will remain more suitable products for many downstream materials. Petrochemicals oil demand in the OECD will likely mirror tight oil production in the US, which produces LPG and ethane as feedstocks in that market. “Accordingly, demand in this sector is expected to grow until around 2035 and then start a slow decline for the rest of the forecast period,” the report said. This would see offtake from OECD countries reach 7.7 million barrels/day by 2050, close to its level in 2024. MACRO, DEMOGRAPHIC DRIVERSOverall demand is driven by expected GDP growth, rising population and income levels, and expanding industries and technologies that these products use, including renewables, electric vehicles (EVs) and construction. “It is assumed, however, that this growth potential will be partly constrained by regulations and actions linked to environmental concerns,” the report advised. “These relate to commitments to reduce the sector’s carbon footprint, the push to increase recycling, restrictions on single-use plastics, implementing ‘Extended Producer Responsibility’ schemes, an increasing penetration of bioplastics and improved circularity of petrochemical products.” The outlook cautioned that uncertainty surrounding US trade tariffs could also weigh on the chemicals market dynamics and downstream products. Naphtha demand is expected to grow from 2.8 million barrels/day in 2024 to 3.1 million barrels/day in 2030 in OECD countries, and remain around this level for the entire forecast. OECD ethane/LPG demand is expected to rise by more than 600,000 barrels/day in the medium term before softening, partly as a result of a decline in petrochemical demand but also on LPG substitution in other sectors. The outlook expects aviation to be the only segment that will show growth over the entire forecast period, with even this experiencing some limitations, adding around 1 million barrels/day between 2024 and 2050. China remains the dominant country for oil demand, peaking at 17.7 million boe (barrels of oil equivalent) a day in 2035, driven by petrochemical growth and heavy transportation, but subsiding to 17.1 million boe/day, in part due to increased EV use. Oil consumption growth in India is expected to rise from 400,000 barrels/day in 2024 to 1 million barrels/day in 2050, with naphtha used as the primary feedstock. Petrochemical demand from non-OECD countries will be particularly strong as a result of population growth and an increasing middle class. In response, oil consumption is expected to rise to 12.5 million barrels/day in 2050, from nearly 8 million barrels/day in 2024 – an incremental increase of 4.6 million barrels/day. Demand for ethane/LPG from non-OECD countries will increase by more than 4 million barrels/day between 2024 and 2050, while naphtha will add another 2.4 million barrels/day to incremental demand during the same period. The global population is predicted to rise by around 1.5 billion people, from 8.2 billion in 2024 to almost 9.7 billion by 2050, mainly in non-OECD countries. MOBILITY TO REMAIN PIVOTALTransport is set to remain “the backbone of oil demand” to 2050, accounting for 57% of global consumption in 2024, and is expected to largely retain this share over the entire forecast period. This accounts for both road travel and the aviation industry. Overall energy demand is predicted to grow by 23%, with demand for all fuels expected to rise apart from coal. Oil consumption is expected to reach 123 million barrels/day by 2050. Oil will retain the most significant share of the energy mix, just below 30%, with oil and gas accounting for over half of demand between 2024 and 2050. The share of renewables is set to increase by 10 percentage points from 2024, to 13.5% in 2050. Chemicals usage is in part attributed to growth in demand from both segments, as products will be used for renewables, for instance in manufacturing photovoltaic panels for solar energy. The percentage of oil, gas, and coal in the energy mix was around 80% in 2024, “only a little less than when OPEC was founded in 1960, despite energy consumption increasing more than five-fold over that time”, the report noted. Although the long-term forecast is for increased energy demand, the outlook cautioned that volatility around the global economy and energy markets could alter the landscape quickly. In 2024 petrochemicals production, along with growth in the aviation sector, were cited as the drivers of oil demand, which rose by 1.3 million boe/day compared with 2023, supported by sustained growth in transport and residential sectors in developing countries. This growth was primarily driven by the continued expansion of the petrochemicals and aviation sectors, as well as sustained growth in road transportation and residential sectors in developing countries. Focus article by Morgan Condon

Route 1 capacity should be offered on quarterly basis Capacity will be used only as last-resort if TSOs do not slash tariffs further Ukraine renewable sector needs support mechanism ROME (ICIS)–Traders looking to export gas from Greece to Ukraine using a new bundled capacity product would benefit from three key improvements by grid operators, the CEO of D.Trading, the company that is currently using this route, told ICIS. Dmytro Sakharuk said transmission system operators should consider increasing the capacity allocated for this route, which uses the Trans-Balkan corridor, extend the booking period and reduce tariffs. Speaking on the sidelines of the Ukraine Recovery Conference in Rome on 9 July, the CEO said his company booked the largest capacity for gas exports from the Greek VTP to Ukrainian storage in July. He said gas transmission system operators (TSOs) need to allocate a minimum firm capacity to allow companies to predict their market position. Currently, Route 1 capacity is offered based on what is left over after firm capacity for standard products is booked during regular monthly auctions. However, Sakharuk said gas grid operators should guarantee at least a minimum capacity which traders can count on every month. He also noted that if the product, currently offered on a temporary basis, were to be extended beyond October, it should be marketed for a longer period. Sakharuk said traders would benefit if this capacity were offered on a quarterly basis as many companies may be looking to import LNG via Greece, which may require greater time flexibility in terms of imports, regasification and send-out. TARIFFS Most importantly, however, Sakharuk said transmission system operators need to reduce transmission costs even more than they currently do. Grid operators agreed to reduce by 25% aggregated transmission tariffs from Greece up to the Romania-Ukraine border, with a further reduction of 47% expected between the Ukrainian and Moldovan borders. Nevertheless, Sakharuk said, even when accounting for the discounts, the fixed capacity cost was €6.68/MWh which, he said, was excessively high. This cost does not include additional variables, which bring the total transmission cost up to €9.00/MWh. Sakharuk said gas grid operators should benchmark these costs against much cheaper routes from Hungary or Poland. The cost to ship gas along Route 1 is disproportionately higher because Romania’s Transgaz and its Moldovan subsidiary, VMTG, charge some of the heftiest transmission costs in the region despite having no compression costs along the route. Sakharuk said that, unless grid operators implemented these changes, the route will never be viable and traders will only use it as a last resort if all regional transmission capacity elsewhere is fully booked. RENEWABLES On a different note, speaking at one of the side events organised by the Florence School of Regulation and Ukraine-based think tank Dixi Group, Sakharuk also referred to the development of the renewable sector in Ukraine. He said the country needed to introduce a support scheme if it was serious about scaling up clean production. He said his company, a subsidiary of DTEK, Ukraine’s largest private power and gas producer, sees a lot of investor interest in developing the wind and solar sector despite war-related risks. However, he said many developers were put off by falling electricity prices which meant it was difficult to take a long-term investment decision if prices were forecast to fall. The price decline is largely the effect of a vicious cycle, also affecting EU producers, where rising renewable output was depressing margins. However, while EU countries benefit from generous funds in supporting scaled up projects, Ukraine does not have similar schemes, which means that investors are reluctant to commit to long-term projects.

MUMBAI (ICIS)–India’s state-owned Bharat Petroleum Corp Ltd (BPCL) is currently assessing the impact of an 8 July fire incident at its Kochi refinery and petrochemical complex in the southern Kerala state, a company source said on Thursday. Twenty-three people were hospitalized – seven BPCL workers and 16 residents of the surrounding area – after inhaling smoke following an explosion and fire near BPCL’s central warehousing unit on 8 July, the source said. The fire was caused by a power fluctuation in a 200-kilovolt (kV) underground cable, which passes through a concealed trench on the BPCL Kochi Refinery campus, the company source said. This has affected some plant operations at the site, he said, but did not provide further information. Any impact on operations at any of the plants in the refinery is unclear, based on checks with other company sources. BPCL operates a 15.5 million tonne/year refinery at its Kochi complex and produces liquefied petroleum gas, naphtha, benzene, toluene, hexane, propylene, sulphur, petcoke and hydrogen. The company also operates a specialty propylene derivatives petrochemical project at its Kochi refinery complex which has the capacity to produce 160,000 tonnes/year of acrylic acid; 212,000 tonnes/year oxo alcohols (n-butanol, iso butanol and 2-ethyl hexanol); and 190,000 tonnes/year of acrylates (butyl acrylate and 2-ethyl hexyl acrylate). The Kerala state government announced that a special committee was created to investigate the fire which will submit its report within three days. A separate committee has been formed to review BPCL’s disaster management action plan and to recommend any changes within a week. The committee that will review BPCL’s disaster management plan will include the deputy collector of the district, BPCL’s security officer, electrical inspector and officials from the Kerala State Electricity Board (KSEB). Additional reporting by Corey Chew and Aswin Kondapally

SINGAPORE (ICIS)–Trade tensions have been in focus for the wider petrochemical markets since US Liberation Day tariffs were announced. In this podcast, propylene editor Julia Tan speaks with ethylene editor Josh Quah to examine how recent tariff developments have impacted the Asian olefins market. Ethylene support collapses with ethane resolution, new downstream demand to cushion drops US tariff impact to trickle up from end use sectors Zhengzhou Commodity Exchange announces propylene futures, beginning 22 July

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. The global polypropylene (PP) market is undergoing a seismic shift, driven by remarkable changes in China’s trade flows. The data tells a compelling story of a country rapidly transitioning from a net importer to a potential net exporter of PP by year-end 2025. Consider these incredible shifts: PP Exports Soaring: As recently as 2020, China’s PP exports were a mere 0.4m tonnes. If current trends continue, 2025 could see that figure hit 5.7m tonnes – a staggering 3.3m tonnes higher than 2024! Net Imports Plummeting: China’s PP net imports, which hit an all-time high of 6.1m tonnes in 2020, are projected to fall to just 0.2m tonnes in 2025. A Historic Turn: My ICIS colleague Lucy Shuai highlighted that China was actually a net exporter of PP between March and May 2025. This turnaround has profound implications for overseas producers. I’ve estimated the impact on sales turnover in China among China’s top PP import partners. Comparing the 41 months before the 1992-2021 Chemicals Supercycle ended with the 41 months since (up to May 2025), the losses are stark. South Korea leads with a $1.6bn loss in sales turnover. Taiwan follows with $1.1bn in losses. Saudi Arabia saw losses of $1.0bn. Only the Russian Federation gained, up by $178m. These figures reflect a significant drop in total PP imports into China (from 18.7m tonnes to 13.7m tonnes across the compared periods), coupled with a decline in average PP prices. What’s driving this? China’s petrochemicals self-sufficiency is rapidly increasing. ICIS forecasts China’s PP capacity as a percentage of demand will surge from 94% in 2019 to 123% in 2025, and 127% by 2030. This, combined with weaker domestic demand growth and the second Trump trade war, is pushing China to spread its export net ever wider, beyond traditional markets to destinations like Brazil, India, Turkey, and Africa. What does this mean for the global PP industry? Defensive measures like anti-dumping actions are likely. But more critically, producers outside China must go on the offensive. This demands: Dynamic Sales Tactics: Maximising returns from every tonne by constantly re-evaluating sales efforts in diverse global markets. Data-driven decisions on where and when to sell are paramount. Strategic Innovation: The old approach of passively riding out downturns is no longer viable. Innovation, particularly in developing new end-use applications (making your own demand), is key to addressing challenges like climate change. Events in China, combined with climate change, the plastic-waste crisis, demographics and deglobalisation mean the Supercycle’s dynamics no longer apply. A proactive, strategic, and innovative approach is essential for survival and growth. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.