Published December 2014
Chlor-alkali production is energy intensive, with electricity costs typically accounting for 40–50% of operating production costs. Electricity consumption depends on different technology used in chlor-alkali production. Most chlor-alkali is produced by electrolyzing a solution of brine using membrane, diaphragm or mercury cell technologies. Around 74% of global chlor-alkali capacity uses membrane cell technology in 2014. Diaphragm cell and other technology account for 17% and 4%, respectively. About 4% of global chlor-alkali capacity still uses mercury cell, but this is expected to decrease substantially in the near future. The chlor-alkali industry has voluntarily agreed to phase out mercury cell technology by 2017 because of environmental concerns and its high energy consumption.
Chlorine and caustic are two of the most important commodity inorganic chemicals. Two other commercially important and related alkalis are sodium carbonate, commonly called soda ash, and potassium hydroxide, commonly called caustic potash. Chlorine and caustic soda together are normally referred to as chlor-alkali; this term can also be used to describe chlorine and caustic potash.
The following pie charts show world consumption of chlorine and caustic soda:
About two-thirds of chlorine is consumed by vinyl chain and other sectors. Vinyl chain accounts for around 34% of global chlorine consumption in 2014, while other accounts for 28%. Methylene diphenyl diisocyanate (MDI), toluene diisocyanate (TDI) and propylene oxide together account for another 14%. Chlorine consumption has grown at an average annual rate of about 5% per year over the last five years driven by strong growth in the vinyl industry and other sectors. These two sectors will continue to drive chlorine consumption growth of 3% per year over the next five years.
A majority of chlor-alkali capacity is built to supply feedstock for ethylene dichloride (EDC) production. EDC is then used to make vinyl chloride (VCM) and subsequently used to manufacture polyvinyl chloride (PVC). This chain, EDC to VCM to PVC, is normally called the vinyl chain. PVC demand correlates closely with construction spending, therefore, it can be concluded that chlorine consumption and production are driven by the construction industry. Hence, chlorine consumption growth depends on the growth of the global economy, since a country will spend more on construction if it has a healthy gross domestic product (GDP).