Communicator

Dow Inc. has announced a significant delay to its highly anticipated Path2Zero project in Fort Saskatchewan, Alberta, while also expanding its review of European assets in response to ongoing market challenges. The Path2Zero initiative, originally slated for phased startup in 2027 and 2029, represents an $8.9 billion investment to build the world’s first net-zero emissions steamcracker (ethylene plant) and polyethylene production facility. This project was designed to decarbonize 20% of Dow’s global ethylene capacity and boost its polyethylene output by about 15%, supplying roughly 3.2 million metric tonnes of low- or zero-carbon plastics annually.

The decision to delay construction comes as Dow faces persistent global economic uncertainty, including unpredictable U.S. trade policies and tariffs that have dampened demand and increased market volatility. According to Dow CEO Jim Fitterling, the pause is intended to preserve cash flow and avoid escalating costs before major construction begins. By delaying the project, Dow expects to save $600 million in 2025, contributing to a $1 billion reduction in capital expenditures for the year. Despite the setback, the company remains committed to the long-term vision of the Path2Zero project, which is seen as crucial for future growth in sectors such as pressure pipes, wiring, cables, and food packaging.

In addition to the Path2Zero delay, Dow is broadening its review of European assets, particularly in light of high feedstock and energy costs, weak demand, and increasingly complex regulatory conditions in the region. This expanded review now includes all value-creating options for its polyurethanes business, as well as three high-cost, energy-intensive upstream assets: the steam cracker in Böhlen, Germany; chlor-alkali and vinyl assets in Schkopau, Germany; and the basics siloxanes plant in Barry, U.K. The company aims to complete this review by mid-2025, with possible outcomes ranging from idling to shutting down these facilities.

Financially, Dow reported a net loss of $290 million in the first quarter of 2025, reversing a profit from the previous year, largely due to lower prices and higher costs. The company has also implemented a global workforce reduction of 1,500 jobs and is targeting approximately $6 billion in near-term cash support through asset sales and legal settlements. Despite these challenges, the Alberta government and other project stakeholders continue to support the Path2Zero initiative, emphasizing its long-term importance for the region’s economy and the global shift toward low-emissions energy.

#dow  #dowchemical  #dowolefins  #steamcracker  #b öhlen #germane  #schkopau  #chloralkali  #netzero   #chloralkali 

DOW Chemical’s industrial complex, in Terneuzen, The Netherlands

24^th Jan 2025

Dow's decision to indefinitely postpone the maintenance of its No. 3 ethylene cracker (LCH-3) at Terneuzen reflects the company's strategy to navigate challenging market conditions in Europe.

Initially planned for 2023 and later rescheduled for 2025, the maintenance has now been deferred indefinitely due to weak regional demand and cost-cutting measures.

The idling of this cracker, which has a nameplate capacity of 680,000 tons per year of ethylene, will help Dow reduce expenditures while maintaining its ability to meet customer commitments through its other two operational crackers (LCH-1, LCH-2) at the site.

This move highlights the broader struggles in Europe's petrochemical sector, where subdued demand and oversupply have pressured margins.

The closure of downstream derivative production facilities at the DOW Chemical’s industrial complex, in Terneuzen, such as Trinseo's ethylbenzene-styrene unit and Olin's cumene unit in 2023, has further exacerbated the challenges in placing cracker products in the market.

Dow's flexibility in feedstock usage at Terneuzen has historically supported profitability, but current conditions necessitate operational adjustments.

The timeline for restarting LCH-3 remains uncertain and will depend on market recovery and investment in required maintenance.

#terneuzen  #netherlands  #dowchemical  #steamcracker