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The Pyrolysis Dilemma: To Source Within Or Go Outside The Established Secondary Market

Charles Willard, Analyst
August 2, 2021

The petrochemical industry has responded to the plastic waste crisis by investing heavily in advanced recycling solutions, primarily thermal pyrolysis, with plans to reach commercial volumes in the next decade. While small-scale developers of these technologies have been able to rely on low-volume, niche mixed plastic streams from offshoots and other industrial sources to date, these streams are unsuitable for the 100,000 tpa to 200,000 tpa operations being planned today, primarily in Europe.

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So what's the plan – how will the petrochemical industry divert 8 million tons of previously uncollected plastic waste in Europe over the next decade? The answer is not as obvious as you might expect: Despite pyrolysis being touted for its ability to process extremely mixed and dirty streams, this is in comparison to mechanical recycling. The overall plastic composition of the waste needs to be fairly specific – at least 80% polyethylene (PE; any density) or polypropylene (PP), less than 15% polystyrene, and minimal polyvinyl chloride (PVC) or polycondensate (polyethylene terephthalate [PET], polyamides [PAs], etc.) contamination – and this composition of waste is currently not available for sale on the secondary market.

As a result, developers of large-scale pyrolysis operations have two routes to securing their extensive feedstock requirements: They can either give up a slice of their potential revenue and agree to work within the conventional secondary market or try to treat waste streams outside the scope of traditional European waste management.

Sourcing plastic waste from the secondary market

While recyclers in the Western world have generally struggled following China's National Sword, European policy and market conditions have created a landscape where vertically integrated waste management companies, which control both collection and recycling, have been able to thrive. As natural monopolies in a thriving market, these stakeholders have shown hesitancy in working with advanced recycling developers – in their minds, why can't they be the advanced recyclers, and why can't these processes align with their business models? For this reason, Europe has been home to most mechanical recycling improvements over the past few years, though they're not always very successful.

Even so, there are certain types of waste, such as LDPE and PP, that will always be difficult for traditional recyclers to turn into positive economic revenue and are a perfect match for pyrolysis operations. While volume is a concern – the current combined capacity of Grade C and higher film and post-consumer PP on Europe's secondary market is nowhere near the 8 million tons necessary – and a steep rise in demand could result in higher prices than pyrolysis can pay and still make a profit, they will certainly play at least a partial role in the overall solution. As pyrolysis becomes a mainstream buyer of plastic waste, we may even see some reclamation centers target the industry by packaging secondary materials in a PE/PP package – easily done through traditional sink/float separation.

Making Sense of Sustainability

Sourcing plastic waste outside waste management

While considerable effort will be required to access waste streams outside the scope of traditional waste management, the potential upside is high. Companies could be paid to accept waste rather than paying an upcharged sorting fee to reclamation centers, receive positive press and government support for solving a tough waste issue, and create insulation from increasing scrap prices as demand rises over the next decade. A shortlist of untapped plastic waste streams includes:

Carpeting waste (PP, PA)

  • Issues to solve: Must separate recoverable PP/PA yarn from landfill-bound bitumen backing that often contains PVC.

  • Potential solutions: Develop a pretreatment facility that can break down carpeting waste into its recoverable components. As Eastman's partnership with Circular Polymers has demonstrated, carpet dismantling without contamination is certainly possible from a technology standpoint.

Polybag waste (LDPE, PP)

  • Issues to solve: The waste stream is extremely decentralized through several different distribution centers, and the low density of polybags makes it necessary to secure partnerships with several locations before collection becomes worthwhile. While less of an issue in Europe, polybags can be made of either LDPE or PP, making cross-contamination an issue for conventional mechanical recycling processes.

  • Potential solutions: As clothing companies are consistently slammed by environmental advocacy groups, it may be possible to leverage these concerns into a coordinated collection effort. For example, Nike has set up a polybag collection scheme at its distribution centers in North America, sending the used polybags directly to a plastic reclaimer.

Agricultural plastic waste (LDPE, PP)

  • Issues to solve: Agricultural plastic waste – primarily LDPE crop-covering films and PP cords and nursery pots – contain high levels of both organic and inorganic contamination. Collection is typically not centralized, though there are notable exceptions, such as IrelandGermany, and Spain.

  • Potential solutions: A greater degree of emphasis will need to be placed on the washing cycle of pre-treatment, potentially adding additional solvents or an iterative cycle. Collection will remain an issue in decentralized locations, though the relative high-value products from pyrolysis could allow developers in centralized locations to displace low-quality mechanical recyclers.

Ultimately, the most successful developers of large-scale pyrolysis operations will likely use a combination of cheap, untapped waste streams – especially those like polybags and agricultural plastic waste, which contain potential PE/PP cross-contamination – supplemented by materials from the secondary market to help bridge the supply gap. While large-scale operations are projected to be a few years away, companies need to begin moving now – reclamation centers are already moving fast to capture untreated waste streams to help expand their control over the market.

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