Will the long-term gasoline surplus overwhelm the propylene market?

The energy transition is going to hit gasoline demand. Fluidised catalytic cracker (FCC) units are a major source of gasoline supply in a refinery and must reconfigure to remain profitable. Propylene is one option. Conventional FCC units maximise gasoline with propylene produced as a by-product. FCC refiners will be eager to shift production from gasoline to propylene, particularly in markets where gasoline demand is declining and propylene demand is growing, such as in the US and Europe. But there will be challenges to overcome. Cost of switching from gasoline to propylene, margin uplift for refiners from this switch and feasible options for higher propylene offtake are some challenges. Over-conversion from refiners may kill the conversion incentive and push the propylene market into a surplus situation. The global propylene market will then have to rebalance its on-purpose propylene production sources, such as PDH, metathesis, CTO and MTO.