Invest in Russia — invest in Russian regions!
All analytics

Petrochemicals in Russia: opportunities for growth

Research
6 April 2022
Нефтегазохимия в России: возможности для роста
Source
Release date
08/17/2021
Open PDF

The report of the Center for Strategic Research analyzes the global and Russian petrochemical markets, the risks, and prospects for their development, as well as measures to support the industry.

Analysts of the Roscongress Foundation have identified the main theses of this study, accompanying each of them with a relevant piece of video broadcasts of panel discussions held as part of the business programs of key events held by the Foundation.

Net zero transition may state petrochemicals as the «new normal» for oil and gas exporting countries.

The world is witnessing the development of the climate agenda and a gradual transition to low-carbon energy sources, which soon will cause risks of a decrease in demand for Russian oil and its refined products. At the same time, global demand for plastics is projected to grow steadily, with petrochemicals to become the most significant growing segment of global oil demand until 2030.


Russia is actively responding to these trends: in recent years, the policy to stimulate the development of the petrochemical industry has intensified, which mainly includes benefits for manufacturers. It is focused on achieving several goals, the main of which is the accelerated and efficient monetization of hydrocarbon reserves. A course is also being implemented to increase non-commodity non-energy exports, the formation of modern and competitive domestic technological competencies — these strategic tasks can be solved to one degree or another within the framework of the development of the oil and gas complex. Another priority is to expand the use of plastic products in various sectors of the economy.

Video: roscongress.org/sessions/eef-2018-neftegazopererabotka-sozdaem-novyy-otraslevoy-klaster/search/#00:30:25.024

The development of domestic demand is a necessary condition for the development of the petrochemical industry; however, it is associated with a decrease in the effectiveness of measures to improve the environmental sustainability of the Russian economy.

The current export trend in the development of large-tonnage petrochemicals creates additional risks for business sustainability due to the volatility of the global market price environment. This factor has been especially evident in recent years in the synthetic rubber market, where even now the share of net exports in the production volume exceeds 60%. Also for high-volume plastics: by 2030, the share of net exports from production is expected to rise to 48-53% from 0.4% in 2018.

The impact of the effect of replacing primary polymers with «secondary» ones in Russia will be much less than in developed countries, primarily due to the slow implementation of the separate waste collection system, the lack of decisions to ban single-use plastic and the less developed waste recycling sector. This will also support demand for virgin hydrocarbons.

Video: roscongress.org/sessions/rew-2021-novye-vyzovy-khimicheskoy-otrasli-klimaticheskaya-povestka/search/#00:30:16.576

The state policy provides for many measures to support the petrochemical industry.

The current place of petrochemicals in the Russian economy is rather modest. The share in gross added value does not exceed 1.6%, the volume of investments in the industry is less than 3% of the total, the share in tax revenues of budgets is also at the level of 1–2%.


This situation led to the formation of a whole support and stimulate system to the industry, including:

• Tax incentives
• Preferential lending
• Subsidizing
• Tariff and non-tariff protection measures
• Stimulating the consumption of Russian petrochemical products

Video: roscongress.org/sessions/eef-2021-povyshenie-otdachi-ot-nefti-i-gaza-dlya-rossiyan/search/#00:45:28.191

We also invite you to familiarize yourself with other materials posted in special sections of the Roscongress Information and Analytical System Oil and Gas, Chemical Industry, Climate Change, dedicated to the development of petrochemicals in the context of the climate agenda.

Anlytics on the topic

All analytics
Research
5 February 2018
Geology of the Future

ROSGEO presents a draft roadmap for the development of geology up to 2050. Leading experts in the geological branch, scientists, representatives of related industries and minerals developers have worked out this draft for several months. The work was conducted at various expert sites during the foresight sessions.


Research
29 May 2019
Geology for the future. The development of World ocean resources

The study was prepared by Rosgeologia and is focused at the geological study and assessment of the mineral and raw material potential of the World ocean.

Research
8 February 2018
WEF Annual Meeting: Creating a Shared Future in a Fractured World

This report summarises insights from more than 400 sessions in the official program, as well as outcomes from over 200 working sessions organised by Forum communities.