Opportunities Remain for China's MTBE Development   

Global trends: MTBE demand declining

Generally, it seems MTBE (methyl tert-butyl ether) demand getting smaller in the global market. In Europe, a number of countries have already found new biofuels to substitute for MTBE, and respectively they are tending to use ETBE (Ethyl Tertiary Butyl Ether) and alcohol petrol as options, which resulted in decreasing 30% MTBE demand in west and north Europe in 2008. In Asia, Japan has a policy to develop the use of ETBE and alcohol petrol in 2010 and 2011, aiming to make them account for 20% of national petrol sales, which is considered to be a good way to decrease greenhouse gases emissions by 6% in the period of 2008 to 2012, compared with the benchmark emissions in 1990. Unfortunately, others in Asia currently have no policies limiting or banning MTBE. The main reason is high speed development in their current economies, so they put much attention on the quantity of petrol rather than the quality, even substitution, the situation which will probably last a long time.
    Historically, global MTBE consumption reached the highest point - 22.58 million tons in 2001, however, from 2004, consumption declined significantly: 17.7 million tons in 2005 and 15.3 million tons in 2006, with 13.3 million tons forecast for 2010. The United States was world's largest MTBE consumer in 2005, accounting for 32% of the global total, but from 2006 when the US banned MTBE usage, the top position was taken by China, using 12% of the global total.

Great demand in China

In spite of the MTBE ban in United States and replacement by ETBE in Europe, it seems that this is still not the right time for Asian countries to copy those models because they worry at the moment about urban air pollution but not the underground water pollution caused by MTBE. Therefore, an expanding market in Asia is expected in the next few years.
    Meanwhile, MTBE in China's automobile industry becomes more attractive to most producers because the automobile industry displays a more significant role in China's economy. Data from official report say the number of vehicles in China increased to 18 million, which was three times more than the 5.7 million in 2005, while the capacity of MTBE rose to 3.2 million tons in 2010, compared with 2.1 million in 2005. It is expected to be 4.4 million tons in 2014 with the support of plants now under construction and proposed projects. However, the existing MTBE factories in China are confronted by low operating rate of about 75%. In addition, 90% of MTBE output was used as a petrol additive, leaving little for other uses in the chemical industry.

Challenges and opportunities

With the impact of oil price, methanol petrol and ethanol petrol became much more popular in some Chinese provinces, while non-grain fuel ethanol achieved some commercial success in recent years, with a few plants' capacity exceeding 10 000 t/a. Furthermore, M85 and M100 methanol petrol have recently achieved government approval to promote civil applications in Shanghai, Shanxi and Shaanxi provinces, and also the capacity of coal-based methanol overtook 30 million tons per year, which might have negative effects for domestic MTBE consumption.
    On the other hand, China currently has 500 million tons of refining capacity and fairly rich C4 resources. C4 raw material is believed to be an easy way to produce MTBE. Therefore, the higher MTBE capacity and MTBE output can be expected in the next few years.
    As inevitable tendency, it is believed that the day of MTBE replacement in China will come sooner or later due to its heavy pollution of drinking water. In this circumstance, now it is the right time for MTBE producers to make decisions for substitute products, aiming to avoid the waste of isobutylene resources. In addition, MTBE producers might prepare to move forward to isobutylene downstream derivatives and fine chemical intermediates including alkylate petrol, isooctane, heptene, butyl rubber, polyisobutene, methyl methacrylate (MMA) and so on, which are good uses for existing C4 resources. Alternatively, MTBE producers might be able to concentrate on ETBE production.