The Raw Materials Transition In The Chemical Industry – A Study On The Future Of The Chemical Cluster In Central Germany

The Central German Chemical Cluster (MDSV) is one of Germany’s most significant integrated chemical clusters, characterized with closely interconnected material flows between its member sites. A central component of the cluster is the steam cracker in Böhlen, which has been operated by DOW to date. This facility supplies large quantities of basic petrochemical chemicals such as ethylene, propylene, and aromatics. The planned decommissioning of the steam cracker by the end of 2027 presents the MDSV with a profound structural shift.

As part of the “House of Transfer” collaborative project, the Center for Economics and Management of Technologies (CEM) at Fraunhofer IKTS, in cooperation with BioEconomy e.V. and the Fraunhofer Institute for Wind Energy Systems IWES, developed a study that analyzes the impact of the shutdown on downstream value-added stages and derives robust options for action to ensure the resilient and sustainable future development of the MDSV.

For the first time, the material flows of the entire network are quantified and mapped across all sites and linked to techno-economic models. On this basis, transformation pathways are systematically analyzed and comparatively evaluated in terms of energy, raw material, and infrastructure requirements.

Based on technological maturity, scalability, and regional connectivity, the study identifies three fundamental transformation pathways until 2035:

• the further development of existing cracker structures using alternative, non-fossil naphtha equivalents,
• the transition to methanol-based process routes, and
• the specific substitution of petrochemical intermediates with biotechnological processes.

All three pathways have different requirements in terms of raw materials, energy use, and infrastructure, and each has specific advantages and disadvantages regarding system integration, scalability, and product portfolio.

The continued analysis of the transformation pathways resulted in three key findings:

• Following the shutdown of the steam cracker, the Central German Chemical Cluster can only remain competitive if it makes strategic use of its locational advantages. A complete transition to sustainable raw materials while maintaining current structures is considered unrealistic. Instead, new, regional sources of raw materials and energy are needed, accompanied by adjustments to production technologies.
• All of the transition pathways examined require massive investments in infrastructure. New supply networks must be established, particularly for biomass, CO₂, hydrogen, and renewable energy, as these will play a decisive role in determining the MDSV’s future competitiveness.
• The future of the chemical industry in Central Germany depends on close collaboration with other sectors. The energy, agricultural, forestry, and waste management sectors must be more closely integrated with the chemical industry so that raw materials and co-products can be used efficiently and new, integrated value chains can be created.

It is becoming clear that the transformation of the region is limited less by technological feasibility than by appropriate market and industrial policy frameworks. Policymakers can establish framework conditions, mitigate investment risks, and facilitate the coordination of shared infrastructure. For stakeholders in industry and politics, the study provides an analytical decision-making framework that can be used to evaluate investment options in terms of their techno-economic impacts and to derive strategies.

Fraunhofer IKTS, together with CEM in Halle, possesses extensive expertise and experience in conducting techno-economic analyses and also supports other regions in similar transformation processes. The models and methods developed are transferable and enable comparable assessments for other chemical and industrial sites facing similar transformation challenges.

The study was conducted as part of the “House of Transfer” project, funded by the Federal Ministry for Economic Affairs and Energy (BMWE), which supports the transformation of the chemical industry in the region through the development of sustainable raw material strategies.

Project “House of Transfer”
Funded by: Federal Ministry for Economic Affairs and Energy
Duration: 01/2023-12/2026
Partners:

• Fraunhofer IWES (project coordinator),
• BioEconomy e. V.,
• Fraunhofer Institute for for Systems and Innovation Research ISI,
• Fraunhofer Institute for Ceramic Technologies and Systems IKTS,
• Martin-Luther-University Halle-Wittenberg,
• POLYKUM e. V.
• For more information about the “House of Transfer” project, please visit the website: https://www.house-of-transfer.de/

BioEconomy e.V.
BioEconomy e.V. (BEV) is a national business association for the bioeconomy sector with nearly 50 members from companies, research institutions, and other networks, and is headquartered in the chemical hub of Leuna.

The BEV’s goal is to establish value chains based on the use of non-food biomass to accelerate the transition from fossil fuels to renewable raw materials. In doing so, BioEconomy e.V. focuses, among other things, on the fields of biotechnology, biorefining, green chemistry, and the timber industry.

For this purpose, BEV represents the interests of its members in business, science, and politics, connects them both nationally and internationally, and supports them in the realization of research, development, and implementation projects.