For many years, mechanical recycling has been the more dominant process in the recycling market. Yet, the complexities around waste collection, the quality and composition of existing feedstocks, and a limit to the number of times molecules can be reprocessed, can increase the risk to brand owners’ hopes for meeting longer-term, ambitious sustainability targets.
Chemical recycling, also known as advanced or molecular recycling, could potentially have merits in terms of providing that desired long-term solution. In simple terms, it is the process by which plastic is broken down into an earlier molecular state to provide new materials. In reality, it is an umbrella term for multiple recycling methods that provide routes to create new materials from waste.
Chemical recycling benefits from an influx of investment into the sector and has the potential to process large volumes of waste material that cannot be mechanically recycled, providing an attractive prospect for both producers and buyers across the value chain.
These technologies dovetail suitably into a global industry, searching for a solution to its supply and demand deficit. Brand owners and chemicals companies now need chemically recycled plastics to meet their ambitious post-consumer recycled (PCR) content targets, with converters pushing producers for higher and higher volumes of non-fossil-based feedstocks in the chain, sparking a wave of interest among many players.
In 2021, the ICIS Mechanical Recycling Supply Tracker identified just over 2,500 mechanical recyclers globally, of which 24% are responsible for 70% of the total capacity of 49m tonnes/year. The research includes recycled PET (R-PET), recycled PE (R-PE), and recycled PP (R-PP). The ICIS Analyse service also projects analytics and pricing for R-PET, giving foresight for business planning. This breadth of data is particularly relevant amidst the recent COVID-19 disruption to the supply chain.
Recently, around 20 chemicals and recycling experts at ICIS met to evaluate producers’ position in the chemical recycling and sustainability landscape, what the industry implications might be and where ICIS can support positive progress.
How does it compare to traditional mechanical practices, and is it complimentary? Is it the global panacea for producers' sustainability challenges? Ultimately, where and how can chemicals companies play, and how do you assess your strategies?
A global panacea?
“Everybody's very much focused on using the recycled content, but not really addressing the front end of the chain in terms of collection and sorting. The entire supply chain needs to get more involved in or support this part of the chain, even work with government. These are the areas that industry, working with the right parties, can bring out the right change.” - Helen McGeough, Senior Plastics Recycling Analyst and Analyst Team Lead, ICIS.
Many brands have already committed to using a minimum of 25% recycled content in their packaging by 2025, beyond the mandate on plastic bottles. As addressed in the previous roundtable article in this series, Sustainability and the chemicals industry – the problem with delaying the inevitable, regulation and consumer awareness have expedited the rate of industry change. A number of different taxes are being introduced in countries around the world, as well as existing voluntary initiatives, such as the Ellen MacArthur and WWF global Plastics Pacts, which gives the industry a significant backdrop of societal pressure and drive towards new world initiatives.
Chemicals giants are becoming increasingly interested in their part to play. LyondellBasell, aims to be a leader in plastics recycling, with a target of producing and marketing 2 million tonnes/year of recycled and renewable-based polymers by 2030. Packaging firm, Berry Global recently announced upgrades to the tune of $70m to support the demand for recycled content: “These investments are strategically focused on expanding our advantaged product portfolio to help our customers meet their sustainability needs, while concurrently driving innovation in anticipation of future sustainability needs in the flexible packaging market.” Jerry Lamarre, Executive Vice President and General Manager, Berry Global.
Despite the progress that has been made, it is not guaranteed that it will provide the global solution needed for meeting recycling targets by 2025, and there are additional regional differences to this issue: “Europe is ideally suited on feedstock because of the sorting process they have. In the US, that has to grow with us to be successful and that’s happening today. But it has to grow.” Ron Abbott, Sustainability Technical Manager, Chevron Phillip Chemical.
Another growing challenge involves financing projects, which is raising the cost of capital for fossil-fuel projects. Banks and investors are increasingly considering environment, social and governance (ESG) factors as part of their investment strategies – an area that ICIS clients can develop strategies for: “Analysts use ICIS to hedge risk, basically. But to do that, they need to really understand the market, and with the Analyse products, they can see the future trends in the pricing reports, with Insight, what's happened today, and the recycling trackers, the supply and demand angle. The analytics service clarifies the impact of those brand pledges around the legislation.” Mark Victory, Senior Analyst, Recycling at ICIS.
Much like mechanical recycling, the biggest hurdle to the success of chemical recycling is the supply of the feedstock – the plastic waste to be recycled – which is a broader problem, with many more players than just chemicals producers alone. This is also a relatively new phase of innovation; production is not yet at scale, and therefore yields appear lacklustre. The current production costs are higher than those for mechanical recycling, and the ultimate requirement – the efficiency of its environmental impact – remains unclear with no existing, large-scale independent cradle-to-grave LCAs (Life Cycle Assessments) proving its impact either way.
Yet, while some producers remain reticent of how they should transition into sustainability, other, early adopters remain positive of the overall benefits: “Initially quantities will be limited – we’ve communicated that to customers. But ultimately once [the industry] gets up and running, volumes will continue to grow from that point.” Ron Abbott, Sustainability Technical Manager, Chevron Phillip Chemical.
Longer-term, there is some certainty that chemical recycling can be complimentary to mechanical recycling overall. Chemical recyclers can potentially process waste that is not suitable for mechanical recycling, as well as provide food grade resins that are currently more constrained if produced via a mechanical route.