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The petrochemical industry is facing mounting environmental
pressure to reduce plastic waste through increased recycling. Yet
plastics recycling is a complex issue that involves not just
plastics producers but also brand owners, consumers,
municipalities, waste management companies, and waste recyclers.
Industry infrastructure, government regulations, and technology
development also play important roles. To delineate the issues and
to assess factors that will determine future plastics recycling
rates, IHS Markit proposes a process economics framework that
enables systematic and quantitative evaluation of plastics
recycling (see Figure 1).
In the production of virgin plastic, feedstocks typically cost
US $100 to US $500 per ton. Every conversion step requires capital
investment and involves operating costs that provide maximum value
at a typical consumer product value of US $2,000 per ton. Yet due
to lack of effective sorting and collecting infrastructure, most
post-consumer plastics end up in landfill or as environmental
pollutants. These wasted post-consumer plastics have zero or
negative value, which represents a tremendous loss in resource
utilization. Because the most urgent issue for plastics recycling
is addressing environmental pollution, plastics recycling must also
be considered from the standpoint of associated resource
utilization and value preservation.
The collected post-consumer plastic materials may be viewed as
"the new oil" in the circular economy. There is already a market
for waste plastic bales in each geographical region. As recycling
activities pick up and markets expand, waste plastic bales will
become an important new commodity with prices set by supply and
demand. Sorting efficiency, collection costs, and quality will be
reflected in the market price, similar to other commodities.
Collected waste plastics can be mechanically recycled into
plastics, chemically recycled to monomers, or molecularly recycled
to feedstocks. Each recycling route exerts its impact mainly on the
supply and demand of virgin plastics, virgin monomers, and virgin
feedstocks, respectively. All recycling routes will eventually
impact the supply of incumbent feedstocks: crude oil, natural gas
liquids (NGL), and even natural gas or coal.
The extent to which recycled materials impact future demand for
virgin plastics depends on the future recycling rate versus the
total demand growth rate. Figure 2 illustrates this concept using
mechanical recycling of polyethylene terephthalate (PET) as an
example.
In Figure 2, the total annual demand for a plastic is Dt, which
is the sum of demand for virgin plastic Dv and demand for recycled
plastic Dr. Thus, Dv = Dt - Dr in any given year. The impact of
plastic recycling on future demand for virgin plastic can be
determined as follows:
1. Demand balance in year 0 (base year):
Dv0= Dt0- Dr0
Letting R0 =Dr0/Dt0 , where R0 is recycle ratio in year 0:
Dv0= Dt0(1-R0)
2. Demand balance in year n:
Dvn = Dtn- Drn
3. Assuming total annual demand grows at x% and
recycle rate grows at y%:
Dvn = Dt0 (1+x)n * [1-R0(1+y)n ]
The future growth rate of virgin resin thus depends on three
factors: the growth rate of total demand (x), the current recycle
ratio (R0), and the future growth rate of plastics recycling
(y).
Equations (1)- (3) can be extended to any plastic and to
multiple end markets, each with a different scenario of demand
growth rate, current recycling rate, and future recycling growth.
IHS Markit Process Economics Program created an interactive
template for quantitative estimation of the impact of future
recycling rate on future demand for a virgin plastic, in any region
. The template also allows estimation of annual and cumulative
leakage to the environment, either as landfills or pollutants.
Similar analyses can be applied at monomer and feedstock levels for
chemical and molecular recycling, respectively.
Future recycling growth rate will be determined by the relative
production economics and quality of recycled versus virgin
material. Figure 3 presents a comparison of production cost
structure for mechanically recycled PET (rPET), at 18 KTA capacity,
and virgin PET from monoethylene glycol (MEG) and purified
terephthalic acid (PTA), at 650 KTA capacity. Also shown is the
carbon footprint of each process, to show relative
sustainability.
The current scale of mechanical recycling for PET is relatively
small, which means that fixed and other costs per ton of rPET are
very high compared to production of vPET. However, due to the
relatively low price of feedstock (waste PET bales), the total
production cost of rPET is lower than that of vPET. rPET also
commands a lower price than vPET, due to its generally lower
quality, resulting in lower profitability for rPET. To improve the
economics and profitability of rPET, its production scale must be
increased substantially and its quality must improve to command a
higher market price.
From a sustainability viewpoint, rPET has a lower total carbon
footprint than vPET produced directly from MEG and PTA. When
tracing MEG production to ethylene by ethane steam cracking and PTA
production from PX (para-xylene) and heavy naphtha (HN) in an
aromatic complex, the sustainability of rPET vs. vPET is even more
striking.
Future recycling operations will require multiple solutions.
Chemical and feedstock recycling offer the possibility of operating
at a larger scale, and they may be right for certain situations.
However, these processes require energy to break down larger
molecules to smaller molecules, plus additional energy to convert
small molecules back to plastics by repeating the long conversion
steps as used in production of virgin polymers. The net result is
much higher carbon emissions for chemical and feedstock recycling
than for mechanical recycling.
From the sustainability, resource utilization, and value
preservation viewpoints, the industry's priorities should be
mechanical recycling, chemical recycling, and feedstock recycling.
Mechanical recycling has challenges that require industry
innovations. Sample opportunities include: developing better
tagging or tracking of materials to significantly increase sorting
and collection of higher-purity post-consumer plastics; providing
blend stocks to compensate for somewhat inferior properties of
recycled plastics; and developing new, large-volumen markets that
decrease use of recycled plastics for short life-cycle
applications, such as packaging materials, with use for long
life-cycle applications, such as textiles, pipes, or even housing
construction materials.
With the emergence of EPR (extended producer responsibility)
policy approaches, producers are at least in part operationally and
financially responsible for recycling the products they produce.
The new regulation is expected to build a more effective
infrastructure that will lead to a larger supply of well-sorted,
high-quality, post-consumer plastics - which will significantly
increase the scale and further improve the economics of mechanical
recycling.
Posted 23 April 2020 by RJ Chang, Ph.D., Vice President, IHS Markit