BANGKOK (ICIS)–Sluggish domestic demand weighed on Japan’s petrochemical industry, resulting in reduced production volumes in 2024 compared with previous years, according to the Japan Petrochemical Industry Association (JPCA). 2024 ethylene output falls 6.3% Production of five major plastics shrink by 5% Japan economy forecast to grow by 1.2% in 2025 “Although some crackers in Southeast Asia and East Asia are reducing production, there are plans for capacity increases in crackers that significantly exceed demand in China,” JPCA said in a report prepared for the Asia Petrochemical Industry Conference (APIC) 2025. The conference is being held in Bangkok, Thailand from 15-16 May. Operating rates of crackers in Japan are expected to remain lowered, as with previous years, JPCA said. Japan’s ethylene production in 2024 fell 6.3% year on year to 4.99 million tonnes, as domestic crackers have operated at below 90% of capacity since August 2022, with the monthly average run rate falling below 80% five times in 2024. Japan’s real GDP growth rate in 2024 was 0.1% amid weak exports, neutral growth in private consumption, and a slight increase in government consumption. For the whole of 2024, the country’s total production of five major plastics – namely, linear density polyethylene (PE), high density PE (HDPE), polypropylene (PP), polystyrene (PS) and polyvinyl chloride (PVC) – declined to 5.7 million tonnes, lower by 5.2% from 2023. Production (in thousand tonnes) Product 2024 2023 % change Ethylene 4,989 5,324 -6.3 LDPE 1,160 1,219 -4.8 HDPE 656 665 -1.4 PP 1,935 2,075 -6.8 PS 549 564 -2.7 PVC 1,406 1,496 -6.0 Styrene monomer (SM) 1,297 1,428 -9.2 Ethylene glycol (EG) 276 264 4.6 Acrylonitrile (ACN) 303 341 -11.2 Sources: METI, Japan Styrene Industry Association (PS, SM) and Vinyl Environmental Council (PVC) Domestic demand as ethylene equivalent in 2024  inched up by 1.4% to 3.92 million tonnes, according to JPCA data. While the global economy is expected to grow steadily in 2025, there is a risk of deterioration in the global economy and a corresponding decline in demand due to geopolitical issues, JPCA said, citing Russia’s invasion of Ukraine, the Israel-Hamas war, as well as the tariff policy of the US Trump administration. The latter has caused costs of raw material prices to soar, JPCA said. Meanwhile, Japan’s real GDP growth rate for 2025 is projected to accelerate to 1.2%, supported by increased exports, sustained growth in personal consumption, and increases in capital investment, said JPCA. Higher wage hikes in 2025 should help boost domestic consumption, it said. In the report, JPCA called on the petrochemical industry to adopt new roles and responsibilities in achieving carbon neutrality and advancing a recycling-oriented society. The report outlined a two-stage timeline: first, to reduce greenhouse gas emissions from existing facilities by immediately deploying currently available technologies; and second, to establish sustainable development goals by gradually introducing new technologies into society. “Not only corporate efforts but … collaboration and system design throughout the supply chain are required,” JPCA said. Focus article by Jonathan Yee

BANGKOK (ICIS)–External factors continue to pressure Thailand’s petrochemical industry, driven by new capacity additions from low-cost producers, particularly those in the Middle East, according to a report by the Federation of Thai Industries, Petrochemical Industry Club (FTIPC). Global PE, PP, PX oversupply weigh on Thai industry Trade tensions threaten Thailand export growth Proposed US tariff hikes could disrupt supply chains Despite these obstacles, the industry is on a gradual recovery path, driven by increasing demand in key sectors such as food packaging, pharmaceuticals, and electronics, the FTIPC said in a report released for the Asia Petrochemical Industry Conference (APIC) 2025. The two-day conference in Bangkok, Thailand, ends on 16 May. However, domestic consumption remains under pressure due to high household debt levels, which could impact the demand for durable goods and related petrochemical products. Here is a summary of the FTIPC’s outlook for petrochemical products produced in Thailand this year: Southeast Asia’s second-largest economy expanded in 2024 by 2.5%, accelerating from the 2.0% growth in 2023. Household consumption growth over the period slowed to 4.4% from 6.9% in 2023. The Bank of Thailand in March said that it expects Thailand’s economy to grow just above 2.5% in 2025, falling short of earlier projections, as high household debt and structural challenges in manufacturing continue to hinder an uneven recovery. While signs of recovery are evident, the industry still grapples with significant challenges, particularly global oversupply in polyethylene (PE), polypropylene (PP), and paraxylene (PX), the FTIPC said. “This oversupply continues to strain profit margins,” it said. Additionally, geopolitical tensions, trade restrictions, and economic slowdowns in major export markets such as China and Europe pose further risks to growth. Thailand is currently facing a 36% tariff on its exports to the US, with a temporary pause on these tariffs set to expire in July. “The United States has raised concerns among Thai industries, particularly those heavily dependent on exports, by proposing tariff increases,” FIPTC said. “If implemented, these tariff hikes could disrupt supply chains, elevate production costs, and pose significant challenges for Thai exporters,” it added. “Higher import duties may reduce competitiveness and profitability, forcing businesses to reassess their market strategies and cost structures,” it said. Looking ahead, Thailand’s petrochemical sector must navigate a volatile global market while capitalizing on domestic demand growth. Strategic investments in feedstock diversification, sustainability, and advanced manufacturing are crucial for the sector’s success. “To remain competitive, industry leaders will need to focus on cost optimization, innovation, and regional collaboration to strengthen their market position and drive long-term growth,” the FTIPC said. Furthermore, Thailand’s PTT Global Chemical (PTTGC) is set to become the country’s first chemical producer to integrate US-imported ethane as an alternative feedstock. Under the agreement, PTTGC will secure an annual supply of 400,000 tons of ethane to meet growing market demand in a highly competitive environment. The company expects to begin receiving imported ethane in 2029. PTTGC has entered into long-term agreements with key partners, including Very Large Ethane Carriers (VLECs) service agreements with parent firm PTT Public Co (PTT) and Malaysia’s liquefied gas transportation firm MISC. Additionally, PTTGC has signed a long-term terminal service agreement with Thai Tank Terminal C (TTT) to facilitate the delivery and storage of ethane at the Map Ta Phut Terminal in Rayong. Meanwhile, the Thai plastics industry is facing growing competition from finished goods imported from China and competitive supplies from the Middle East. This influx of lower-cost products is intensifying market pressure, potentially affecting domestic manufacturers in Thailand. Moreover, China’s oversupply across sectors like EVs, electronics, and plastics has impacted manufacturing in Southeast Asia, including Thailand. Thailand’s overall polymer consumption has seen a slight increase last year. However, Thai converters are facing significant challenges from geopolitical uncertainties, a global economic slowdown, and high inflation rates, exacerbated by a rise in major polymer imports from China and the Middle East. Insight article by Nurluqman Suratman Thumbnail image: At the Thai-Chinese Rayong Industrial Zone, located at the east coast of Thailand on 29 December 2021. (Xinhua/Shutterstock)

This article reflects the personal views of the author and is not necessarily an expression of ICIS’s position. Romanian pro-EU candidate favours free trade but is less outspoken on clean energy Polish and Romanian presidential candidates’ position on Russia could sway EU policies Rise of populist parties across CEE could lead to fragmentation of markets LONDON (ICIS)– Romanians and Poles will be heading to the polls on Sunday and their vote could hardly be more consequential for the direction of energy markets in central Europe and arguably the EU as a whole. Apart from holding presidential elections on the same day, there are many other notable similarities. As mayors of Bucharest and Warsaw, educated at elite EU universities, Romania’s presidential candidate Nicusor Dan and his Polish counterpart Rafal Trzaskowski have strong pro-EU agendas. At the opposite end, Romania’s populist far-right candidate George Simion and Poland’s Karol Nawrocki prefer to champion the cause of the EU-disillusioned grassroots. But there are also differences. While Dan and Trzaskowski promote the EU’s market-based economic model, the Romanian candidate is less outspoken in favour of clean forms of generation than his Polish counterpart. Simion, on the other hand, embraces economic nationalism, with a strong emphasis on state control over natural resources. He bemoans the abnormal weight of spot trading in the Romanian gas market, caused primarily by heavy market regulation and taxation, but proposes the continuation of state intervention. Like Nawrocki, he advocates preserving coal-fired generation but acknowledges the role of renewables in the installed capacity mix. Perhaps the most critical point in the candidates’ electoral campaigns remains their position on Russia. Unlike Simion, leader of the far right AUR party, who has been more amenable to a rapprochement with Moscow, Nawrocki continues his Law and Justice Party’s anti-Russia narrative. Nevertheless, Simion’s recent fleeting trip to Poland to endorse the conservative candidate elicited sarcastic remarks from the Polish prime minister Donald Tusk who said the encounter ‘had made Russia happy.’ If elected, their position on Russia will matter to the wider EU market on several accounts. In Romania’s case, a Simion win would swell the chorus of populist eastern European leaders such as Hungary’s Viktor Orban or Slovakia’s Robert Fico opposing Russian sanctions and favouring the resumption of Russian oil and gas supplies to Europe. With a standing ban on entering Ukraine and Moldova, Simion has already expressed opposition to supporting Ukraine’s war efforts and insisted on protecting Romania’s interests rather than supporting neighbouring countries. This raises questions about his commitment to facilitating the expansion of cross-border electricity and gas interconnections with Ukraine and Moldova and ultimately threatens to undermine Kyiv and Chisinau’s EU membership bids. Although Nawrocki’s political stance on Russian fossil imports is unclear it is equally uncertain whether as an EU sceptic he would lend support to EU Russian sanctions. In hindsight, Romania and Poland have benefited from substantial EU funds, collectively raking in over €300 billion since their accession in 2007 and 2004. Even so, large swathes of the population remain disillusioned as distortive national economic policies have been preventing an equitable distribution of funds. This is symptomatic of all central and eastern European countries, where the population felt left behind, even though their countries had been net beneficiaries of EU support since accession. The emergence of populist movements with strong nationalist, interventionist and anti-EU agendas across central and eastern Europe may not lead to a full breakup of the bloc but threatens to fragment energy markets and inject further political instability in an already volatile environment. As central and eastern Europe’s largest countries, the outcome of Sunday’s elections in Romania and Poland will provide a tantalizing insight into the direction that the EU will take and policies that it intends to pursue in the long term.

SINGAPORE (ICIS)–Growth in the Asia-Pacific Economic Cooperation (APEC) region is expected to slow sharply to 2.6% in 2025 and 2.7% in 2026 as escalating trade tensions and policy uncertainty weigh on investment and trade, the group said in a report released on Thursday. The region posted a 3.6% growth in 2024. Economic and trade activity across the 21 APEC member economies has slowed considerably, with export volumes projected to barely grow in 2025, according to the new report by the APEC Policy Support Unit. Source: APEC Forecast export volume growth for the group was 0.4% in 2025, while import volume growth will be even lower at 0.1%. They represent a sharp deceleration from 2024, when export and import volumes grew by 5.7% and 4.3%, respectively. “From tariff hikes and retaliatory measures to the suspension of trade facilitation procedures and the proliferation of non-tariff barriers, we are witnessing an environment that is not conducive to trade,” APEC Policy Support Unit director Carlos Kuriyama said. “This uncertainty is hurting business confidence and leading many firms to delay investments and new product launches until the situation becomes more predictable,” Kuriyama added. While challenges persist, the report highlights an opportunity for member economies to strengthen cooperation and build resilience through structural reforms and open trade. Kuriyama urged APEC economies to recommit to cooperation and stability. He noted that restoring confidence in trade requires not only easing tensions, but also expanding into new markets, strengthening supply chain resilience and improving transparency of trade rules and procedures. The report was released ahead of the two-day Ministers Responsible of Trade Meeting in Jeju, South Korea, which opened on Thursday.

SINGAPORE (ICIS)–Saudi energy and chemical giant Saudi Aramco has signed 34 Memoranda of Understanding (MoUs) and agreements potentially worth about $90 billion in total, with major US companies. The deals cover a range of fields, including liquefied natural gas (LNG), fuels, chemicals, emission-reduction technologies, artificial intelligence (AI) and other digital solutions, manufacturing, asset management, short-term cash investments, and procurement of materials, equipment, and services, the company said on 14 May. “Our US-related activities have evolved over the decades, and now include multi-disciplinary R&D, the Motiva refinery in Port Arthur, start-up investments, potential collaborations in LNG, and ongoing procurement,” Saudi Aramco president and CEO Amin Nasser said. “As Aramco pursues an ambitious value-driven growth strategy, we believe that aligning with world-class partners supports further development of our operations, strategic diversification of our portfolio, industrial innovation, and ongoing capability development within the Kingdom,” he added. The MoUs and agreements signed by Aramco and its Aramco Group Companies are as follows: Downstream Honeywell UOP: MoU related to technology licensing for an aromatics project. Motiva: MoU related to an aromatics project in Port Arthur, subject to a final investment decision. Afton Chemical: MoUs related to development and supply of chemical fuel additives in pipelines and retail fuel offerings. ExxonMobil: MoU related to evaluating a significant upgrade to the SAMREF (Saudi Aramco Mobil Refinery Company) refinery and expanding the facility into a world-class integrated petrochemical complex. Upstream Sempra Infrastructure: MoU related to previously announced HOA (head of agreement) regarding LNG equity and offtake stake in Port Arthur LNG 2. Woodside Energy: Collaboration Agreement to explore global opportunities, including an equity interest and LNG offtake from the Louisiana LNG project. Additionally, both companies are exploring opportunities for a potential collaboration in lower-carbon ammonia. NextDecade: Final Agreement to purchase 1.2 million tonnes per annum of LNG for a 20-year term from Train 4 of the Rio Grande LNG Facility, subject to certain conditions, including a positive final investment decision of Train 4. Technology & innovation Amazon/AWS (Amazon Web Services): non-binding Strategic Framework agreement related to collaboration on digital transformation and lower-carbon initiatives. NVIDIA: MoU related to developing advanced Industrial AI computing infrastructure, establishing an AI Hub and AI Enterprise platforms, an Engineering and Robotics Center of Excellence, training and upskilling, and collaborating with NVIDIA’s startup ecosystem. Qualcomm: MoU with Aramco Digital that aims to explore entry into a strategic collaboration that will focus on key digital transformation use cases, leveraging Aramco Digital’s 450 megahertz (MHz) 5G industrial network to connect intelligent edge devices with on-device AI capabilities, including smartphones, rugged industrial devices, robots, drones, cameras, sensors, and other IoT devices. Technical Services Procured Materials and Services: MoUs were signed to reflect the existing relationships with strategic US suppliers: SLB, Baker Hughes, McDermott, Halliburton, Nabors, Helmerich & Payne, Valaris, NESR (National Energy Services Reunited), Weatherford, Air Products, KBR, Flowserve, NOV, Emerson, GE Vernova, and Honeywell. These suppliers provide high-standard materials and professional services that help support Aramco’s projects and operations. Strategy & Corporate Development Guardian Glass: MoU to localize specialty glass manufacturing for architectural applications in the Kingdom of Saudi Arabia. Finance Wisayah asset management agreements with PIMCO (Pacific Investment Management Co), State Street Corporation, and Wellington. Agreements for short-term cash investments through a unified investment fund, the “Fund of One,” with BlackRock, Goldman Sachs, Morgan Stanley, and PIMCO.

Lower storage targets to apply for 2025, MEP confirms These may be enacted in July, if negotiators can agree a compromise by the end of June Next round of talks set for 3 June BRUSSELS (ICIS)–Revisions to Europe’s gas storage targets will apply to 2025 once agreed, with talks likely to wrap up quickly, a MEP involved in the negotiations confirmed to ICIS on 14 May. Jens Geier, who represents the European Parliament’s centre-left Socialist & Democratic group in compromise negotiations to agree the final law, told ICIS the intention was to implement the rules for the current gas storage filling season. Speaking at a policy debate on affordable energy convened by Energy Traders Europe in Brussels, Geier said the majority of lawmakers agreed on a need to avoid sending market signals about when to buy gas. “You don’t have to be a socialist to believe that when Germany has to buy, it has to fill up [stocks by two more percentage points] for the first of August, it’s an invitation to raise prices,” Geier said, talking about speculation over changing filling targets. ICIS assessments have shown a correlation between agreement in each step of the revision process and the spreads between the Dutch TTF Q3 ’25 and front-winter contracts. The discount averaged €0.548/MWh below Winter ’25 between 9-23 April, correlating with details of the Council position. The discount then widened to €0.955/MWh from 24 April-7 May, after the ITRE committee vote suggested a speedy resolution to negotiations. This is in stark contrast with the first three months of 2025, when the Dutch TTF Q3 ’25 held an average premium of €2.769 over Winter ’25. TRILOGUE TALKS A delegation from the Parliament began so-called trilogue negotiations on 13 May, with EU countries, represented by the Council of the EU, and with the European Commission also attending. The talks aim to find a compromise between positions adopted by the Council and the Parliament. Geier said the first round of discussions went well and that co-legislators were like-minded about not needing the “harsh regulation” of 90% filling targets. “We can believe in the traders that they will provide security of supply,” Geier said, calling for trust in the market backed by penalties if it failed to deliver. Geier told the panel he thought a maximum of two more rounds of talks at political level would be needed to agree a deal, saying most of the work would be done at technical level. He also said he hoped the deal could be concluded before Poland’s Council presidency concludes in June, telling ICIS he hoped the final deal could be endorsed by the full parliament in July. An EU source confirmed the next discussions would take place on 3 June, after a very positive first round.

SAO PAULO (ICIS)–Brazilian President Luiz Inacio Lula da Silva had already got several investment deals in the bag midway through his five-day state visit to China – among others, Envision Group has committed $1.0 billion in Latin America’s largest economy to produce sugar-based sustainable aviation fuel (SAF). Green hydrogen, ammonia also within Envision plans for its ‘Net-Zero Industrial Park Energy production, energy storage on focus in Brazil, China firms talks, deals China’s insatiable hunger for grain sees Brazil as the counterweight to US supply SAF: LARGE SCALEWhile Envision Group’s announcement did not disclose any financial details about its Brazilian SAF plans, Brazil’s Planalto Presidential Palace press services said in a separate statement the firm’s investment would stand at around $1.0 billion. The announcement came soon after Lula met Envision’s management in Beijing. “Envision will develop Latin America’s first Net-Zero Industrial Park in Brazil. Anchored by the production of SAF, the park will establish a complete green fuel value chain while advancing the development of green hydrogen and green ammonia,” said the company. “We will build Latin America’s first Net Zero Industrial Park in Brazil, creating a green ecosystem centered on SAF, green hydrogen, green ammonia, and renewable energy systems,” said Envision on a post on social media network LinkedIn. “By leveraging Brazil’s abundant renewable resources to drive sustainable growth and continuously innovating to lower the cost of green fuels, this collaboration [is to] contribute positively to Brazil’s green transition and reindustrialization.” IT’S ALL (MOSTLY) ABOUT ENERGY The Brazilian president is due to meet “several companies” this week while in his visit to China, eyeing not only investments in Brazil but also partnerships with Brazilian institutions and the creation of research centers. The main objective for the latter would be to generate “technological development” in the energy sector, said the cabinet’s chief of staff, Rui Costa, who is travelling with the President. According to the Brazilian government, agreements with Chinese companies will involve projects in renewable energy – wind and solar energy but also some hybrid projects which will focus primarily on energy storage in Brazilian territory. “Brazil is one of the countries that has invested the most in wind and solar energy, but today it lacks the ability to store this energy,” said Costa. Apart from Envision, CGN Power also said it would invest Brazilian reais (R) 3.0 billion ($535 million) in a wind, solar, and energy storage hub. Lula also met the chairmen of automotive group GAC and the chairman of Windey Energy Technology Group. Within automotive, electric vehicles (EVs) major Great Motor Wall (GMW) said it would invest R6.0 billion in car manufacturing facilities in Brazil. Finally, another deal to highlight would be China’s semiconductor company Longsys commitment to invest R650 million to expand capacity at its Brazilian subsidiary Zilia, potentially helping avoid US tariffs on China-made chips. Meanwhile, Lula also found time in his first two days of state visit to meet with the CEO of Norinco, a conglomerate in the defense sector but whose reach expands also to infrastructure projects such highways, railways, hydroelectric plants, and water treatment plants. On May 13, Lula and China’s President Xi Jinping also had a one-on-one, although the pair had already met a few days earlier in Moscow. RELENTLESS GROWTH IN BILATERAL TRADE According to figures by the Brazilian cabinet, China has since 2009 been Brazil’s largest trading partner. Bilateral trade stood in 2023 at $157.5 billion, with Brazil exporting to China goods worth $104.3 billion and importing goods worth $53.1 billion from China. The growth in bilateral trade continued up to the first quarter of this year. According to the same information by Brazil’s cabinet, between January and March trade between Brazil and China stood at $38.8 billion – Brazil exported $19.8 billion and imported $19 billion. Among the main products exported by Brazil are crude petroleum oils, soybeans, and iron ore and concentrates. Brazil, in turn, mainly imports from China vessels, telecommunications equipment, electrical machinery and appliances, valves and thermionic tubes (valves). MOSCOW STOPOVER CRITICISMBefore landing in China over the weekend, Lula had visited Russia and took part on 10 May in Moscow’s Red Square military parade in which the country remembers the victory of the Soviet Union against Germany. Lula defended his presence in Red Square and argued that did not disqualify him as a potential peace mediator between Russia and Ukraine, the latter suffering a full-scale invasion by the former since 2022. Lula has always sought to develop Brazil’s soft power influence and as a global mediator. Since Russia invaded Ukraine in 2022, however, he has at times stated that Moscow and Kyiv bear equal responsibility for the war, calling them both to settle their differences through dialogue. Front page picture: Lula (left) meeting with Chinese officials in Beijing  Picture source: Brazil’s Planalto presidential palace press services Insight by Jonathan Lopez ($1=R5.61)

BANGKOK (ICIS)–Tough times lie ahead for the Asia’s petrochemical industry amid continued oversupply and a global economic downturn because of US tariffs, but a pivot to sustainable products can help. US-China trade war threatens industries Oversupply, weak demand signal prolonged downturn; plant closures loom Energy transition offers feedstock opportunities Global megatrends, including geopolitics, energy transition, and sustainability are fundamentally reshaping petrochemical demand patterns and the entire industry. The US-China trade war de-escalated this week as both sides agreed to bring down tariffs on each other significantly by 14 May. An all-out trade war between the US and China, the world’s two-biggest economies, could trigger a global recession. There is also a possibility that amid high trade tensions with the US, China could flood the global market with excess products, which may prompt building of trade barriers by other countries After striking an initial agreement to bring down tariffs from more than 100%, the US and China are expected to continue with trade negotiations. In the meantime, uncertainty is dominating markets, leading to soft demand. DIFFICULTIES The petrochemical industry is facing significant challenges, including oversupply, cost volatility, and regulatory shifts, ICIS Chemical Analytics vice president Alexander Lidback said. Amid persistently low demand, firms are shutting plants around the world, notably in Europe, and without significant shutdowns, polyolefin oversupply could persist into the mid-2030s, forcing companies into survival mode. The industry will need to “go through worse to get better”, with 2027/2028 being a potential turning point for survival, Lidback said. China’s increased capacity, which was “underestimated”, is also a contributing factor to oversupply, and global polyolefins capacity significantly exceeds demand currently, ICIS senior consultant John Richardson said. Adaptation through plastics circularity and innovation could be a way for companies to survive, although this also presents its own difficulties, said Bala Ramani, director of sustainability consulting and Asia strategy advisor at ICIS. All three will be speaking at the Asia Petrochemical Industry Conference (APIC) in Bangkok, Thailand on 15-16 May, discussing market challenges and opportunities in the sector. The theme for APIC 2025 is “Ensuring a Transformed World Prosperity”, with a particular focus on “Action for Planet with Innovation and Collaboration”. CIRCULARITY There is a need amid the current demand downturn to adapt to the changing landscape -one of which is by exploring plastics circularity and alternative feedstocks. Sustainable polyolefins present as “interesting opportunity”, especially for integrated polyolefins producers to leverage existing assets for driving incremental value, Ramani said. “By embracing a multi-faceted production model, the polyolefins industry can reduce its environmental footprint, meet evolving regulatory demands, and unlock new value streams in a resource-constrained world,” said Ramani. The path towards circularity sustainability for polyolefins involves several approaches: mechanical recycling, circular polyolefins derived from pyrolysis oil, and bio-circular polyolefins derived from bio-naphtha or other hydrogenated bio-derived oil. Pyrolysis is expected to become a complementary solution alongside mechanical recycling in tackling plastic pollution. In turn, polyolefins producers can maximize the value of pyrolysis oil integration by strategically aligning feedstock procurement, technology, and processing configurations, Ramani said. Europe leads with robust regulations and collaboration, eyeing over 13 million tonnes of sustainable polyolefins by 2040. Asia, however, lags, stymied by fragmented policies despite interest for sustainable polyolefins from markets such as India, Japan and South Korea. “In Asia, early adoption by a few markets and global brands, combined with evolving yet fragmented policies, is building momentum and opportunities, with future growth hinging on regulatory alignment and infrastructure development,” Ramani said. Regulatory fragmentation among Asian countries compared with EU regulatory mandates makes sustainable polyolefins market tricky to scale. South Korea and Japan are paving the way for sustainable polyolefins demand, although Asian investments are likely to target developed markets such as the EU, before pivoting to local and regional markets in the long term. Were EU recycled content targets to be adopted in Asia, the region could unlock over 18 million tonnes of sustainable polyolefins demand by 2040. But while alternative feedstocks and sustainable polyolefins offer opportunities for producers, their widespread adoption faces other hurdles including regulatory uncertainty, high costs, technology scalability and insufficient waste infrastructure. “Amid ongoing industry challenges, sustainable polyolefins are set to drive resilience through resource efficiency, regulatory compliance, and new value creation enabled by circular production models,” Ramani said. Insight article by Jonathan Yee Click here to view the ICIS Recycled Plastics Focus topic page.  Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image: Panorama from Golden Mount, skyline of Bangkok, Thailand, (By Walter G Allgöwer/imageBROKER/Shutterstock)

Italian TSO Terna has likely been curtailing solar generation on sunny days with low demand according to traders and publicly available data Market participants told ICIS that curtailments could be bullish for Italian gas and power prices Curtailments aim to safeguard grid stability and could indicate Terna taking cautious approach following Iberian blackout in April LONDON (ICIS)–Several market participants told ICIS that recent curtailments of Italian solar output by the national transmission system operator (TSO) Terna could have a bullish impact on power prices by replacing cheap renewable generation with more expensive gas-fired output. “The Italian TSO has likely been curtailing solar generation, as the forecasts don’t match up with the actual generation levels, especially on festive days with low demand,” a trader told ICIS. A second trader added that the effect would be “decidedly bullish on power and gas”. BEAR OR BULL? Italian solar curtailments are indicative of grid oversupply, which is potentially a bearish indicator for power prices. On 1 May, amid the Labor Day national holiday, low demand and sunny weather, pressures Italian electricity prices to zero or near-zero for seven consecutive hours (11:00-17:00) across all zones. Italian load peaked at 27.7GW on 1 May, some 9.3GW below the peak load average for the month of May so far. The combination of low demand and strong solar led to actual solar generation, as reported by Terna, falling behind ENTSO-E’s Day-ahead forecast for 1 May, a discrepancy which could indicate curtailments. Despite being an indicator of oversupply, according to ICIS Italian power analyst Luca Urbanucci, the impact of the curtailments is ultimately bullish. “If Terna is curtailing solar generation more, this means that low-cost renewable generation is being replaced by something more expensive, like gas”, said Urbanucci. A third trader agreed with this view, claiming that “the impact will be more bullish than bearish”. Perhaps in anticipation of increased prospects of solar curtailments, on 27 March the Italian regulator Arera issued Resolution 128/2025/R/EFR to compensate solar producers for curtailed energy, extending a mechanism that previously applied only to wind power. GRID SECURITY The first trader told ICIS that curtailments were “probably made because Terna is having difficulties balancing the grid”. The first trader also explained Terna’s curtailments could be due to safety reasons. “Curtailments are made in order to have more gas-fired power plants running, so that if solar generation should suddenly and unexpectedly drop due to a passing cloud, gas-fired generation can be quickly ramped up and offset the loss,” the same trader said. A second Italian power analyst noted that “we are also witnessing unplanned import reductions made likewise with the goal of leaving more space for Italian CCGTs”. Keeping additional combined-cycle gas turbines (CCGTs) online could provide both additional grid inertia and ramping capability for the Italian grid. The second trader suggested that the curtailments might be linked to the Italian TSO taking a more cautious approach after the major Iberian blackout on 28 April. However, ICIS’s Urbanucci was skeptical regarding any recent change in Terna’s approach, stating that he did not believe that “Terna’s recent behavior has been particularly influenced by what happened in Spain.” “The Italian TSO has always been quite conservative in avoiding risks of overloading the grid,” said Urbanucci. In April, Italian solar generation was 15.7% higher than in April 2024. Terna did not reply to questions from ICIS by the time of publishing.