Bio-based polyethylene and MEG: Cycles

When oil prices rise, the green premium shrinks

Bio-PE has no public price series. Its economics depend on the gap between Brazilian ethanol and fossil PE prices. When oil and fossil PE are expensive (2008, 2011-2014, 2022, early 2026) the premium shrinks; when PE is cheap and ethanol dear, it widens and projects stall. Braskem has expanded only once since 2010 (2023, +60 kt). Plans for a Thai plant have not reached a confirmed investment decision in sources reached. Demand comes from brand owners with fossil-carbon or bio-content targets, which have proved stickier than price-based buying.

About 2.2 m3 ethanol per t ethylene (indicative) times Brazilian hydrous ethanol price, against fossil ethylene; not published by Braskem.

Booms and busts

1. 2010

   Braskem started Triunfo at 200 kt/yr as oil traded near $80/bbl and Brazilian ethanol was cheap (indicative).

   not public

2. 2023

   Braskem expanded Triunfo by 30% to 260 kt for $87 million and signed an MoU for 200 kt in Thailand.

   not public

3. 2025-2026

   Fossil PE fell to $830/t (LLDPE CFR South Asia, Dec 2025), widening the bio premium; then the 2026 oil shock lifted LLDPE to $1,470-1,550/t CFR India (Apr 2026), narrowing it.

   fossil benchmarks from Platts and Polymerupdate via polyethylene tile

What drives the cycle

• Brazilian ethanol price. Most of bio-ethylene cash cost.
• Fossil PE price. Sets the premium buyers must pay.
• Brand commitments and labelling rules. Demand rests on buyers valuing bio content and lower carbon.
• Mass-balance acceptance. Cheaper mass-balance products compete with physically bio-based PE.

Metrics to track