Petrochem policy proposes mandatory use of plastics

New Delhi, Jan 4 | Updated: Jan 5 2006, 05:30am hrs
The draft petrochemicals policy, to be considered by the Cabinet shortly, says an inter-ministerial committee would consider if plastic consumption by certain user industries should be made mandatory. Stating that per capita plastic consumption in the country is low (4 kg as against the world average of 25 kg), the proposed policy says a Task Force would be set up to draw a roadmap for adding new gas cracker capacities.

Rich gas (C2C3 fraction) should be reserved for crackers, as consuming this petrochemical feedstock as fuel is wasteful. Even while liquified natural gas (LNG) is imported into the country, a certain percentage of it (the C2C3 fraction constitutes 7-8% of the gas volume), must be earmarked for the petrochemical industry, the draft adds.

The proposed policy also suggests de-reservation of production of 83 plastic items from SSIs and a plastic technology upgradation fund for the benefit of the downstream plastic processing units. The idea of imposing a cess on polymers to mobilise the resources for the fund has, however, been dropped.

Expressing concern over the fact that domestic cracker capacity has remained stagnant in the country (2.5 million tonne of ethylene and 1.9 mt xylene per annum) for the last about a decade, the policy draft calls for a ropadmap for more investment in the capital-intensive naphtha/gas crackers.

A senior official from the ministry of chemicals & fertilisers, which drafted the policy, told FE, Issues of availability and pricing of the feestocks (naphtha and gas) are worrying.

Stating that the stagnancy in ethylene output would throttle the growth of all polymer value chains, he said a concerted action plan was needed to build more crackers.

The official cited plasticulture (use of plastic pipes in micro and drip irrigation) and use of plastics as geotextiles in road construction as possible areas where plastic use can be made mandatory.