INDUSTRY
Cracking news – site director Daren Smith says SABIC aims to transform its Olefins Cracker to net zero by 2028 .
PICTURE : TOM BANKS to car interiors , detergents to shampoo .
Close by , the firm ’ s System 18 lowdensity polyethylene plant ( LDPE ) is one of the world ’ s largest of its type , taking about half of the Cracker ’ s ethylene as its feedstock . The pellets it produces are used by customers to manufacture packaging for such everyday essentials as food and medical supplies .
But the very future of both operations and supporting logistics facilities have been in doubt in recent years . When Daren was appointed site director five years ago , despite some serious challenges , he was planning for a bright future for the site - but things changed quickly .
“ We were talking about growth and vision for the future ,” he recalls . “ I was enthused , energised and vibrant about what Teesside could become .
“ I knew the corporation was looking in a strategic way about where its assets base was in Europe and how it would look after 2025 .
“ I knew we were in for some tough times , but I hadn ’ t overlayed the pandemic and the impact of Brexit . They were serious curveballs .”
Despite months of work to make the case for the site to continue , the external pressures of Covid and Brexit tilted the odds heavily against the site ’ s future .
Numerous business cases were assessed and whittled down to just two – to either invest in the Cracker or to close the firm ’ s Teesside operations .
“ The likely outcome was closure ,”
says Daren . “ You go home at night and you think , ‘ What does that mean to the 480 people that directly work for us , let alone all the contractors and support services ?
“ Then there was the domino effect of not having such a chemical asset in the heart of Teesside . We spend up to £ 400m a year on payroll , goods and services . That would be £ 400m that doesn ’ t trickle down into the local economy .
“ But there ’ s also that fact that we are constantly saying that Teesside is a good place to do business . What signal would be sent out to potential investors if one of the world ’ s largest chemical producers decided that it ’ s no longer a viable place to do business ?”
But then something remarkable happened . “ Suddenly , the government was talking about the hydrogen economy , and carbon capture and storage ,” says Daren . “ SABIC ’ s assets on Teesside were a strategic fit with the recently announced Net Zero Teesside initiative .
“ The narrative swung from pure business case model to supporting our ambitions to achieve carbon neutrality .”
SABIC ’ s Teesside operations were pulled back from the brink by international politics and the need for environmental success stories as COP26 , the United Nations climate change conference , got underway under a global spotlight .
“ We ’ d been working on saving the plant for so long , our best efforts had come to nothing and then this sea change happened so fast ,” Daren reflects . “ It was mind-warping .”
So what happens next ? The funds have been approved for the plant ’ s multi-million-pounds conversion from a flexible but complex facility , to a more simplified one .
Perhaps most importantly , the confirmed investment in the Cracker , which is expected to resume operations by the end of 2022 , ends two years of uncertainty for thousands of Teessiders .
“ The design is nearing completion , contracts will soon be awarded , and from there will come construction ,” explains Daren .
“ Our ambition is to bring the Cracker back to life by the end of the year . That ’ s a huge challenge when it ’ s been offline for two years , so there ’ s a massive assurance programme to carry out .
“ The thing that changed the narrative was the ability to move the plant to net zero by 2028 . The first important steps will reduce our carbon emissions by 60 per cent but the ability to move to net zero relies on us having a reliable , sustainable and cost-effective hydrogen solution on Teesside over the next six years .
“ We aren ’ t out of the woods yet . Recent energy price increases , supply chain disruption and now the impact of Russia ’ s aggression against Ukraine all weigh heavily against a sustainable business model .
“ But we ’ re ready to go on these crucial first steps , so let ’ s crack on !”
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