The ramp up in pyrolysis chemical recycling has been slower than expected in recent years. Only 350,000-400,000 t/yr of commercial-scale pyrolysis capacity for plastic waste has been commissioned globally, Argus data show, a portion of which is operating well below nameplate capability. Timelines on many projects are extending for a variety of reasons including permitting, funding and personnel. Plants often need a lengthy process of testing and optimisation before achieving stable operating rates, meaning that supply of pyrolysis oil remains very limited.
Recent press coverage of Shell's March announcement that its target to convert 1mn t/yr of plastic waste into pyrolysis oil by 2025 is no longer feasible showed how this has further fuelled sceptics' questions about its commercial viability. And the risk could be that continuing delays begin to harm public opinion and the confidence of investors and regulators, all of which will be important factors needed for the industry to become established.
Despite progress taking longer than many had anticipated, industry participants remain confident that the industry is heading in the right direction. Sustainability commitments and legislation mandating the use of recycled content in contact or performance-sensitive applications — such as the EU's upcoming Packaging and Packaging Waste Regulation (PPWR) — are expected to drive demand for polymers based on chemical recycling. There is a busy global pipeline for new pyrolysis projects, including many that are in the latter stages of development and due online within 12-18 months. A network of supporting infrastructure — waste sorting centres aimed at providing pyrolysis feedstock and upgrading capacity for pyrolysis oil — is beginning to develop.
Argus spoke to Richard and Paul Bingham from Technotherm, a South African company specialising in thermal engineering, about the company's expansion plans and the factors that they think will be key in the development of the industry going forward. Technotherm currently operates a "twin-system" pyrolysis plant for plastic waste with a capacity of slightly over 10,000 t/yr at its site near Johannesburg. It expects this capacity to quadruple by the end of this year with the installation of three further identical systems on the same site, and aims to bring a further eight units online elsewhere in South Africa by the end of 2025. It is also active in licensing its technology to operators in other regions. Edited highlights of the conversation follow:
What markets do you expect to be the largest for pyrolysis chemical recycling in the future?
We are, first and foremost, a manufacturer of pyrolysis solutions [for external clients]. At this time we have about 50 offers out there to license the technology in the marketplace, that are at different stages of financial close. Whilst interest is currently worldwide, I think that Europe will soon become our biggest market in terms of licensing.
And, since we became an owner/operator, we find that it is highly lucrative. We see demand for our pyrolysis oil from the petrochemical industry in Europe in particular and, as our owned production volume grows in the next 18 months we would expect to be sending more volume towards the European market.
At the moment, America and Australia are more drop-in fuel markets. We supplied a pyrolysis oil facility in California around four years ago, where the operators wanted it to produce ultra-low sulphur diesel (ULSD). But I think that will change in America very soon, with people saying that — rather than making ULSD — they will just sell the pyrolysis oil to petrochemicals producers.
What is the pyrolysis oil that you produce most suitable for?
We have looked at future-proofing our outputs. At the moment the European petrochemical market wants a product that is like gas oil, with low sulphur and aromatics and several other factors. But that might change, and they might want more heavy fraction or light fraction, so as a standard component in the facility we separate the heavy and light fractions and then we put the material back together again for the European market. And, if the European market was to steer off then, for slightly less value, we could sell it into our local market as a blending fuel.
Based on the feedstock that we currently use, we can get up to 9ppm sulphur in our mix, which is well within the acceptable range of the market, and the final boiling point we can achieve is around 350C (which is below the indicative "cracker grade" range quoted in Argus' Recycled Polymers methodology).
Feedstock — both availability and dealing with inconsistencies — has been a persistent challenge for the chemical recycling industry, how do you approach this now and how do you anticipate your sourcing developing as your capacity expands?
Currently we work with two waste collectors in South Africa that provide us with pre-consumer waste that is rejected from extruding plants, for example, in bale form which we just shred and extrude into the pyroliser. If that runs short at any point we can take in dirty material and put it through the shredder and our wash plant before it goes through the system. We can take in baled material, loose plastic and dirty plastic and obviously we go for the easiest option to keep the costs as low as possible. In the future we are planning to create buy-back centres where informal waste collectors can bring waste that they have collected and sorted to sell to us.
There isn't any real difference in the quality of oil between using post-consumer and pre-consumer waste as long as the post-consumer is washed sufficiently. If it's dirty, the sulphur level in the oil goes through the roof, but if it's clean it's the same as processing pre-consumer material. You might see a yield reduction of about 5pc, but it's not major.
Delays and protracted ramping up of facilities have been a common feature in the pyrolysis chemical recycling market thus far. Do you see that there is a risk of this harming confidence in the industry?
I think that there is going to be a rapid roll-out very soon. With new technology there will always be issues with the design of the technology and delays because of what the operators need to learn to get it into operation.
But with our plants, the design and engineering is fully baked. Everything is modular and you just take it out, connect it up and it works. We design, manufacture, install and commission the plants for our clients. Technotherm has an open door policy towards potential plant owners considering our equipment, where we will gladly eliminate the learning curve for new entrants to the market through mentoring and sharing of operational techniques. So now instead of taking 3-4 years to become operational, it's taking a year [from the placing of the manufacturing order]. And if you have a project that operates straight out of the container then you haven't got such high costs and you don't need to secure a massively high price point to secure return on investment to get a payback. Once we have enough of those clients, they can give testimony to what we have advised. The market's going to take off big time.
