Introduction

Oleochemicals are chemicals derived from plant and animal fats. They are analogous to petrochemicals derived from petroleum. The formation of basic oleochemical substances like fatty acids, fatty acid methyl esters (FAME), fatty alcohols, fatty amines and glycerols are by various chemical and enzymatic reactions. Intermediate chemical substances produced from these basic oleochemical substances include alcohol ethoxylates, alcohol sulfates, alcohol ether sulfates, quaternary ammonium salts, monoacylglycerols (MAG), diacylglycerols (DAG), structured triacylglycerols (TAG), sugar esters, and other oleochemical products. Oleochemicals are biodegradable, exhibit low toxicity and are considered to be environment friendly. The major commercially significant oleochemicals are fatty acids and glycerines which are referred to as basic oleochemicals. Other basic and derivatives include methyl esters and fatty alcohols.

As the price of crude oil rose in the late 1970s, manufacturers switched from petrochemicals to oleochemicals because plant-based lauric oils processed from palm kernel oil were cheaper. Since then, palm kernel oil is predominantly used in the production of laundry detergent and personal care items like toothpaste, soap bars, shower cream and shampoo.

Scientists and consumers view oleo products as natural, green, organic, safe, renewable and biodegradable.

The raw materials of the oleochemical sector are:

·         Vegetable oils such as rapeseed oil as well as those derived from soybean, sunflower, safflower, corn, peanut, palm, coco, castor, etc.

·         Fats and oils from animals like rendered fats, tallow, lard, fish oil, etc.

·         Recycled fats and oils like grease from restaurants, used frying oils, trap greases, etc.

Applications

The most common application of oleochemicals is biodiesel production. Fatty acids are esterified with an alcohol, commonly methanol to form methyl esters. Another common application is in the production of detergents. Lauric acid is used to produce sodium lauryl sulfate, the main ingredient in many personal care products. Other applications include the production of lubricants, green solvents, and bioplastics.

Environmental issues related to the oleochemicals manufacturing sector are:

Air Emissions

Oleochemicals manufacturing facilities typically consume large amounts of energy to heat water and produce steam for process applications (e.g., splitting, refining, and distillation processes). Energy consumption is also associated with refrigeration and compressed air systems. Facilities may have captive power plants to supply energy.  Production processes may result in VOC and other emissions.

Wastewater

Industrial process wastewater may contain fatty acids, glycerin, organic residues, and inorganic acids.

Hazardous Materials

Oleochemicals manufacturing facilities use significant amounts of hazardous materials, including raw materials and intermediate/final products.

Wastes and By-products

The principal waste streams generated from fatty acid production are spent bleaching earths, pitches, and spent catalyst filter cakes. Spent bleaching earths represent the main solid waste stream, accounting for between 0.5 percent and 2 percent by weight of treated oils and fats. The spent bleaching earths contain up to 40 percent fat material, and include impurities such as coloring pigments, mucilaginous matters, fibers, protein degradation products, ashes, and soaps. Pitches are generated as residues of fatty acid distillation. Spent catalyst filter cakes are produced from fat hydrogenation.

Waste and by-products generated in glycerin production include heavy fractions from distillation and residues from filtration and / or bleaching, consisting of spent activated carbons, activated clays, and filtering aids containing fat material, soaps, lime, coagulating salts (such as aluminum sulfate or ferric chloride), and coloring pigments.

Industry-specific solid wastes and by-products from oleochemicals manufacturing for making biodiesel include spent catalyst salt precipitates from glyceric phase neutralization; fatty acids and fatty soaps; spent bleaching earth or filtering aid panels produced from purification of low-quality raw material; and heavy and light-end boiling esters from distillation process.

Noise

Typically sources of noise emissions include compressors and turbines, pumps, electric motors, air coolers, rotating drums, spherodizers, conveyors belts, cranes, fired heaters, and from emergency depressurization.

Opportunities

Oleochemicals are used for applications in surfactants, personal care, soaps, detergents and food additives. Various new applications are emerging where they can replace petroleum-based products, creating exciting growth opportunities.

The global oleochemicals market was estimated at 14 million tonnes in the 2013 financial year and it is expected to grow at 6%/year over the next five years. The Asia-Pacific accounts for 68% of the market and this is expected to grow at 8%/year over the next five years. Surfactants, home care and personal care are the largest end use segments. The combination of the growth drivers have resulted in the emergence of new products and applications based on oleochemicals and one of the major beneficiaries is plastics. Polyamide is made from castor oil using available and proven technology.

Opportunities in Asia

Asia is a major consumer and a major producer of oleochemicals and related products, accounting for 68% of the world consumption and 60% of world production. Malaysia and Indonesia are major producers of base oleochemicals, such as fatty acids and fatty alcohols, and have attracted investments from almost all the major companies in the field, such as Emery Oleo, Wilmar, BASF and others. Many are creating partnerships with chemical companies over the years and further strengthening of Asia as a hub for oleochemicals and downstream products.

Future Markets

Oleochemical-based products are a diversification opportunity for chemical companies. Asia is the preferred hub, with a growing market and availability of feedstock. Capitalising on this opportunity, companies can explore partnerships and mergers with base oleochemicals companies. Companies with strong R&D capabilities, looks at building a business in oleochemicals by introducing new molecules. Companies can also to establish their footprint in new regions which would provide them a first mover advantage and position them as a strong integrated player. Industries such as lubricants, polymers and surfactants are impacted by replacement products based on oleochemicals. Companies which capture major portions of the value chain or spot trends early could benefit significantly in the long run.

The global market for oleochemicals is expected to reach 15 million tons by 2018, growing at a CAGR of around 6.0% from 2013 to 2018. Asia Pacific is the fastest growing market for oleochemicals, growing at a CAGR of 8.2% from 2013 to 2018.