How sustainability is driving growth in chemical recycling capacity
By Helen McGeough, Paula Leardini, Egor Dementev and Carolina Perujo-Holland, ICIS
As the world increases its focus on the climate crisis, sustainability has risen to sit high on the agenda of industry and government alike. The pace of change in transitioning to a circular economy has been rapid in recent years. The result for the plastics industry across the globe has been that end markets – major brands, retailers, and consumer goods producers – have made pledges to deliver more sustainable solutions in products and packaging, with an overall objective of shifting away from fossil fuel-based feedstocks.
Regulations and pledges from brand owners have contributed to a growing demand for recycled plastics globally, particularly for use in food and beverage packaging. However, the current supply of high quality mechanically recycled polymers remains short of the demand, especially for food grade recycled polymers. Hence the growing interest and adoption of chemical recycling.
Currently, there are over 45 million tons of recycled polymers globally – recycled polyethylene (R-PE), recycled propylene (R-PP) and recycled polyethylene terephthalate (R-PET) – which represents less than 10% of global annual polymer capacity, according to the ICIS Mechanical Recycling Supply Tracker. This constrains supply available to the end markets and when looking further at those recycled polymers suitable for food contact applications this supply reduces yet further. Globally, food grade mechanical recycled resins currently represent only 10% of the annual capacity of recycled polymers, and therefore 1% of annual total polymer capacity. The availability of food grade varies between resins, with over 20% of global R-PET capacity food grade compared to 3% of polyolefins.
Unsurprisingly, interest in chemical recycling has increased given the shortfall in mechanically recycled polymer supply. With the limitations in mechanical recycling, whether that is availability or technical, there is an expectation from end markets that chemical recycling can bridge the gap in supply.
The industry has high expectations for the larger volumes of feedstock that chemical recycling can potentially process. Also, chemical recycling offers greater capability to process waste streams that may be difficult to recycle by mechanical route, such as flexible, multi-material or multi-layers plastics as well as textiles. Combined this could not only achieve greater circularity in plastics, by increasing the supply of recycled polymers to meet the growing downstream demand, but also reduce plastic waste pollution.
The general view is that commercial scale chemical recycling will be a longer term prospect, making a more significant contribution to 2030 goals. Recent developments in terms of the number of chemical recycling projects announced and levels of investment in this space has been significant.
The ICIS Recycling Supply Tracker – Chemical has identified just under 150 chemical recycling plants globally. However, less than 30% of them are currently operating at commercial scale. Over half of the plants identified are expected to start up in the next three years. As of 2021, the global installed capacity is under 2.5 million tons, including both commercial and pre-commercial facilities. Asia Pacific and North America are the leading regions for capacities, with the Middle East representing 4% of global capacities.
Chemical recycling is an umbrella term for a variety of methods that use different production routes to create new material from waste. ICIS identified three chemical recycling processes: thermal depolymerization (pyrolysis and gasification), chemical depolymerization (glycolysis, hydrolysis, and methanolysis), and solvent-based purification (dissolution), with pyrolysis and glycolysis being the largest in terms of global capacity.
In chemical recycling, processes can be used to revert waste back to an earlier molecular state. Waste can be reverted to monomer or all the way back to crude oil or energy. The ICIS Recycling Supply Tracker – Chemical has identified that, in terms of capacity, only around 20% of the global recyclers currently produce polymers as an output of their chemical recycling facilities. Monomers and hydrocarbons represent 30% and 50% of capacity, respectively, which may or may not remain in the plastics value chain.
Collaboration in the supply chain is essential to drive innovation, share intelligence and best practices. This is evident in the chemical recycling industry with many projects evolving through partnerships and joint ventures with investors stemming from both inside and outside the industry. While investment in recycling continues to grow, chemical recycling, in particular, has seen this surge, and this will continue as technology develops and capabilities bloom.
Despite the progress made and the potential of this industry, uncertainties remain. Chemical recycling processes are typically more expensive than mechanically recycled polymers. Yields have been typically low but are now improving. Chemical recycling also requires a minimum quality of the waste feedstock to ensure high process yield and quality of products, which could cause sourcing challenges like those in mechanical recycling. As with mechanical recycling, though, waste collection infrastructure can potentially be a constraint. The legal status of chemical recycling, as ‘recycling’ varies across regions, or yet to be announced, and the approval process is not yet clear (unlike mechanical) which is influencing the growth rate of the industry in terms of investment and adoption rate of end users.
In addition, the magnitude of environmental impact of the chemical recycling process is still unclear with few, if any, independent life cycle assessment (LCA) studies available. The FMCGs progress on sustainability agendas requires complete transparency and detail on the environmental footprint of chemical recycled outputs. The lack of independent peer reviewed LCAs has been accentuated as a barrier by regulators and stakeholders.
Even with the current unknowns surrounding chemical recycling, at this stage of what is a nascent industry, there remains considerable potential. Regions that have less established recycling capacity can benefit from both mechanical and chemical technologies as they develop the collection and sorting infrastructures to switch plastic wastes into sources of feedstocks. Whether the objective is to generate circularity in plastics, reduce plastics pollution, or diminish the dependence on fossil fueled feedstocks, recycling is an essential component to enabling that transformation.