Plastics Greenium Boosts Chemical Recycling Outlook
Mar 13, 2024
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Exploring the potential of chemical recycling to tackle plastic waste pollution and inefficiencies, with a focus on different forms of chemical recycling, investment drivers, and the destinations for recycled plastics. Discussing the challenges of mechanical recycling, the growth of chemical recycling plants, economic dynamics, and the optimistic future of chemical recycling in addressing hard-to-recycle waste.
Chemical recycling converts plastics back to their original state for high-quality recycling suitable for sensitive materials.
Growing chemical recycling industry with new plants and technologies aims to bridge recycling inefficiencies and enhance waste management.
Deep dives
Chemical Recycling Process and Benefits
Chemical recycling offers a new approach to recycling plastics using chemical processes. Unlike mechanical recycling, which has limitations in yield efficiency and sorting complexities, chemical recycling breaks down plastics to their original hydrocarbons, allowing for the production of high-quality recycled plastics suitable for sensitive materials like food packaging. This process is crucial in addressing the challenge of low recycling rates, especially for hard-to-recycle plastics, and presents an opportunity for producing virgin-grade plastics from waste materials.
Industry Growth and Adoption of Chemical Recycling
The chemical recycling industry is experiencing growth with approximately 40 new chemical recycling plants announced since 2020, showcasing an expected capacity of 2.3 million tons by 2030. This significant expansion aims to bridge the gap in recycling inefficiencies and enhance waste management. Companies are actively investing in chemical recycling projects, with feedstock recycling like monomer recycling and pyrolysis gaining traction, offering opportunities for producing higher-quality recycled materials for various applications.
Policy Influence and Economic Insights
Government policies mandating post-consumer recycled content and imposing plastics taxes are driving the demand for recycled materials in packaging. The introduction of green premiums above virgin plastic prices is incentivizing chemical recycling, with economics indicating high internal rates of return for recycling projects. While challenges like rising construction costs and feedstock price volatility persist, the evolving market dynamics and policy support indicate a positive outlook for the chemical recycling industry's growth and sustainability efforts.
With plastic production set to double by 2050, immediate action is needed to address plastic waste pollution and the inefficiencies of existing recycling systems. Chemical recycling could help process lower-grade feedstocks, significantly upping the amount of plastic that can be given a second life, but is the sector ready to do so?
On today’s show, Dana is joined by Kirti Vasta, a senior associate from BloombergNEF’s sustainable materials team. Together they discuss the different forms chemical recycling can take, what’s driving investment in the space, and the unexpected places that recycled plastics can go.
Complementary BNEF research on the trends driving the transition to a lower-carbon economy can be found at BNEF<GO> on the Bloomberg Terminal or on bnef.com