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Is A Loop-The-Loop Economy Better Than A Circular Economy?

Michael Holman, Ph.D., Vice President, Research, & Anthony Schiavo, Senior Analyst
December 18, 2020

The vision of a circular economy is an appealing one – waste is converted back into the same type of new product it came from, the circle is closed, and no (or, more realistically, far fewer) new raw material resources need to be fed into the system. In plastics, this concept is the promise of advanced recycling technologies. Plastic waste pyrolysis, for example, takes waste streams of mixed plastics like polyolefins – high-density polyethylene (HDPE), low-density polyethylene (LDPE), and polypropylene (PP) – and converts them into pyrolysis oil, which refiners can then use in their crackers in lieu of fossil fuel petroleum to make the feedstocks for new polyolefin materials. Polymer leaders like BASF and SABIC tout circular plastics based on this process.

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However, this approach has some drawbacks. Notably, converting pyrolysis oil into the chemical intermediates used to produce those olefins is difficult and inefficient, requiring a costly and energy-intensive upgrading step to make the pyrolysis oil crackable. It's more practical to simply use the pyrolysis oil for less demanding end markets like marine fuels, such as the bunker fuel commonly used in shipping. This sort of "single-pass" approach falls short of the circular vision, as more new petroleum is needed to continue producing plastics, blunting any positive environmental or climate impact.

However, the key question is, compared to what alternative? And how does that alternative compare at the overall system level? If the bunker fuel is going to be needed and used anyway, and if it would otherwise simply be made from crude oil itself, then the overall system inputs and outputs are not different in this "loop-the-loop" approach, as the diagram below shows. Indeed, if the process of converting pyrolysis oil into bunker fuel is more efficient (relative to making bunker fuel from crude) than converting pyrolysis oil into plastics (relative to making plastics from crude), then the loop-the-loop can be more sustainable and lower-emission than the circular approach. That's the case today, where the waste pyrolysis could produce useful marine fuel at up to 70% to 75% efficiency, whereas the yield of new plastic materials from plastic waste is at best only going to reach 45% or so (and require more energy in the conversion process).

What's better than a circular economy? Maybe a loop-the-loop economy – for now, anyway

Of course, in the long run, if marine fuels are replaced instead by electrification or other renewable sources emerge for shipping, then the argument above no longer holds, and circular plastics could retain a sustainability edge. However, as long as there are other, more suitable uses for pyrolysis oil than making plastics, which would otherwise be using fresh crude, then closing the circle for plastic packaging, however appealing it might be, won't necessarily be the right move for the planet. While being able to tout plastics as "fully circular" or some such designation might be most successful from a marketing standpoint, those interested – whether (petro)chemical players or packaging companies and brands choosing material suppliers – should consider the overall system impact of their choices.

What's more, regulators will (and should) factor this overall picture in when making decisions about how regulations, incentives, and mandates should treat processes like pyrolysis. Already, most fuels mandates, such as the U.S. Renewable Fuel Standard (RFS) or California's Low Carbon Fuel Standard (LCFS), don't regard fuel made from pyrolysis of plastic waste as a renewable fuel, which is a potential impediment to the loop approach. However, most recycled content requirements for plastics also don't consider materials made from waste plastic pyrolysis as recycled – and the relative inefficiency of that "circular" plastics route could give policymakers another reason to keep it that way. If regulators aren't boosting either option over the other, it's all the more reason for materials companies and brands to just focus on the options with the strongest environmental benefit overall.

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