Orion is meeting milestones on road to 2050

LUXEMBOURG—Orion Engineered Carbons, a global supplier of carbon black, is moving forward on its road to sustainability, releasing another carbon black made from 100-percent renewable feedstock and intended for a range of applications.

Ecorax Nature 200 is the company's newest innovation, a rubber carbon black made from tire pyrolysis oil extracted from end-of-life tires.

"Last year, we launched Ecorax Nature 105, the first product made of 100-percent, renewable feedstock and designed for rubber applications," Celso Magri, director of global marketing and sustainability for rubber at Orion, told Rubber News. "In early 2022, we launched Ecorax Nature 200, using a second-generation, animal-free, bio-based feedstock."

A decade ago, Orion was the first major carbon black producer to develop and commercialize carbon black made from renewable feedstocks, such as industrial-grade vegetable oils or other oils derived from waste and residues of biological origin from agriculture or forestry (think pine oil).

Those feedstocks are mostly used as bio-diesel applications, Magri said.

"Ecorax Nature 200 is produced from an oil blend, enabling a gradual transition from fossil to renewable feedstocks on a large industrial scale," he said.

Magri added he is not aware of a comparable product on the market.

"Recovered carbon blacks and other fillers based on renewables have been developed over the years," he said. "However, all those products have performance limitations and can only replace a small percentage of some carbon blacks in non-critical applications. They need significant reformulation work and very long testing.

"In contrast, our products have been developed to match the performance of conventional carbon blacks. They allow a full replacement of conventional carbon blacks and have already been extensively tested in the respective applications."

Both Ecorax 105 and Ecorax 200 were tested at Orion's advanced application laboratories in Kalscheuren, Germany, Magri added.

"We now have a range of sustainable carbon blacks for a variety of rubber applications," he said.

For example, Ecorax Nature 105 and Ecorax Nature 200 were developed as drop-in sustainable solutions for sensitive applications using the ASTM grade N326, and they are touted as having the same performance characteristics as virgin carbon black.

The two renewable CBs are used in tires, for steel cord adhesion compounds and in mechanical rubber goods for some special applications.

"We're also focusing on recycled carbon blacks, which are made from post-consumer recycled products," Magri said. "Currently, the major focus of the rubber carbon black business is on the tire circular economy. Our primary raw material is end-of-life tires."

Under this mantra, Orion has developed a distinct product line, Ecorax Circular. The products also are made from tire pyrolysis oils derived from ELTs.

Ecorax Circular 210, 215 and 220 are used in different parts of tires and also in some mechanical rubber goods.

"In 2021 we developed soft and hard blacks, made from 100-percent (thermoplastic polyolefins) that match in-rubber performance of virgin carbon blacks," Magri said. "This year, we are launching the first commercial grades based on TPO, manufactured using the same mass-balance principle as Ecorax Nature 200."

Carbon black, typically produced as a powder or pellets, is an essential additive in rubber and specialty uses, made by Orion to customer specifications. CB finds use in tires, coatings, ink, batteries, plastics and numerous other specialty, high-performance applications like high-voltage cables.

Carbon black is used to tint, colorize, reinforce, conduct electricity, increase durability and add UV protection, Orion notes in its 2021 sustainability report, released Aug. 1.

Orion has 14 manufacturing plants and several innovation centers on three continents.

"Our core purpose is delivering sustainable solutions for our customers as a leading global supplier of premium carbon black," Orion said in the report.

The tire industry is the largest consumer of carbon black, according to Orion, accounting for more than 70 percent of global demand. The additive comprises about 30 percent of a typical tire by weight.

Orion is the only company in the industry that can make carbon black with the broadest range of production processes: furnace, gas, thermal, lamp and acetylene.

The company has established partnerships to help it reach its sustainability goals through ELTs.

"We're collaborating with different companies and organizations on a variety of projects worldwide," Magri said. "One of the most exciting, impactful examples is BlackCycle, an EU-funded project led by Michelin. We're the only carbon black producer in the group, which includes seven industrial partners.

"The project is developing processes to make new tires out of end-of-life tires."

Orion has its headquarters in Luxembourg and its principal executive offices in Houston. The company has about 355 employees in the U.S. alone.

Orion saw sales revenue of $1.5 billion in 2019 and 2021; and about $1.1 billion in sales revenue in 2020, according to the company's sustainability report.

Adjusted EBITDA was $267 million in 2019, $200 million in 2020 and $268 million in 2021.

By market segment, about 39 percent of Orion's sales come from specialty carbon blacks and about 61 percent come from the sale of rubber carbon blacks, as reported in 2021.

Orion's sustainability report offers mandates and initiatives focused on advancing the circular economy, renewable feedstocks and electrification.

The report outlines how Orion is transforming its product portfolio to reflect sustainability in its business strategy, and has set what it believes are reachable milestones by 2025, 2030, 2035 and finally, 2050.

"To show how serious we are about tackling climate change, we have announced our ambitions to achieve net-zero emissions by 2050," Orion CEO Corning Painter said in the report. "It is a daunting undertaking and, to be honest, I can't say we have all the answers today. I feel the same way I feel when I'm at the base of a mountain I've never climbed before, and I look up at the summit with a general notion of the route I plan to take.

"But I can't say I can map out every step of the ascent. There are always plenty of unknowable unknowns."

In 2025, Orion plans to launch more materials and additives made from recycled materials, citing the aforementioned BlackCycle research initiative with Michelin, among other companies.

A second goal set to be reached in 2025 is the release of materials for EVs and lithium-ion batteries, high-voltage cables and other specialty avenues toward electrification.

"EV's produce no direct emissions, are heavier and have higher torque," Magri said. "If you want to improve the sustainability of a tire over the cycle, you need very different solutions."

And there is give-and-take in this regard in the EV world.

First, Magri said, the pursuit of lower rolling resistance to reduce emissions from the tailpipe becomes irrelevant.

Second, work on materials and solutions that reduce wear become very important. In addition, considering wear will increase, replacing fossil-based materials with recycled or renewable ones will significantly improve the tire sustainability.

"This is an important focus area for us," Magri said. "EVs do not need several heat-resistant parts and other things used by internal combustion engines.

"On the other hand, they need higher insulation and ... lighter metals. This requires different rubber compounds, which, in turn, may need different fillers, including the application of non-conductive carbon blacks to avoid corrosion of the expensive lighter metal parts."

With specialty carbon black, Magri said, the surging demand for lithium-ion batteries for electrification is creating an "incredible opportunity" for Orion's acetylene-based conductive additives.

"We're the only producer of these conductive materials in the Western Hemisphere, with a plant in France and another under construction in La Porte, Texas, which will be the only facility of its kind in the U.S.," he said.

The La Porte facility is expected to quadruple production of acetylene-based conductive additives, acetylene-based production being one of the more environmentally friendly processes for producing carbon black.

Less visible but also essential, Orion notes in the sustainability report, is upgrading electricity grids for offshore wind, distributed solar and charging stations.

"Here conductive carbons again have an important role to play in power distribution cables," the company said. "We believe that we have an important role to play as a conductive-additives supplier to support the transformation of the sector and grow with it."

Conversely, there are hurdles on the horizon on the road to 100-percent sustainability by 2050.

Carbon dioxide and other greenhouse gas price mechanisms could lead to increased costs, where regulations like the EU Emissions Trading System pose "a risk to our operations," Orion said.

"Further increases in the unit price of CO2 and a reduction of free credits are likely to be introduced," the company said.

In addition, Orion notes that the more efficient the technology, the fewer greenhouse gases that are emitted. Carbon black is produced through processing carbon-rich feedstocks, typically from refining or coal processing.

"Consequently, the more carbon we can recover from the feedstock, the less carbon is converted to CO2," the company said. "We intend to comply with the regulations and reduce costs over the long term. CO2 management is critical and integrated into our strategy and processes."

In addition, raw materials are becoming scarce, Orion said.

"The world is transitioning toward a lower carbon economy, and as a result the demand for petroleum and coal is likely to eventually be reduced," the company said.

Feedstocks such as slurry oil and coal tar, which are used to produce carbon black, will be less readily available.

To combat this trend, the company said it plans to improve its yield so that less traditional feedstock is needed, as well as develop alternative feedstocks that are renewable or that use oil recovered from the ELT recycling process.

In the past year, the company also was one of the first in the U.S. to take out a sustainability-linked term loan, Orion said, noting that favorable interest rates related to the loan are tied to the company's success in meeting certain emission-reduction targets at its U.S. plants.

"Our customers have shown a tremendous amount of interest in our sustainable products," Magri said. "Recently, several companies have made very public statements about achieving fully sustainable raw materials by 2050, or earlier. Since rubber and carbon black are the largest raw materials in rubber compounds, replacing conventional carbon blacks with our sustainable products will largely contribute to the achievement of their commitments."