Author: James Kennedy, Technology Analyst at IDTechEx
Since the emergence of pyrolysis as a technology in the chemical recycling market in the last decade, it has attracted the attention of key players in the plastics supply chain. Pyrolysis promises to overcome the existing limitations of mechanical recycling and transform the status quo of most plastic waste being discarded or inadequately recycled. However, despite much investment and interest, some key questions surrounding sustainability and economic viability, as well as new regulatory pressures, are putting into question the future of this technology.
IDTechEx explores pyrolysis and the entire advanced plastic recycling market in their report, “Chemical Recycling and Dissolution of Plastics 2024-2034: Technologies, Players, Markets, Forecasts”.
Pyrolysis as a promising alternative to mechanical recycling
One of the limitations of mechanical recycling is due to the process. During mechanical recycling, plastic waste is cleaned, shredded, melted, and extruded into new plastic material. During this process, the material becomes degraded and contaminated, resulting in it having worse material properties than virgin plastic. The second key limitation of mechanical recycling is that not all plastic waste types can be recycled in this way. Only mono-material streams can be easily incorporated into mechanical recycling facilities. This excludes multilayer packaging (commonly found in food packaging), which can contain multiple polymers and metal film layers. Also excluded is plastic which is highly contaminated with food waste or chemicals.
Pyrolysis, on the other hand, involves heating plastic waste to high temperatures in an anaerobic environment, effectively returning it to hydrocarbons analogous to those extracted from crude oil to produce plastics in the first place. It is cited as a technology that can form part of the circular economy for plastics. One of the key advantages is that difficult-to-recycle items such as multi-material packaging and certain contaminated waste can be accepted, although contamination can prove problematic for pyrolysis systems.
Do the economics stack up?
The question of economics is complex for pyrolysis, with many companies claiming that with scale, this technology can be economically viable. There have been several techno-economic analyses that seem to support this. However, the overall picture might be more pessimistic, with success heavily dependent on oil prices, regulations, and, most importantly, scaling. The market for the sale of pyrolysis oil (the main product of pyrolysis and feedstock for new plastics) is currently small and formed primarily of partnership agreements where players within the plastic supply chain agree to purchase and use this product as feedstock for their production. Pyrolysis oil is, naturally, more expensive and less available than crude oil, so companies need to be incentivized to choose to use it.
Pyrolysis plant capacity growth between 2021 and 2024 alongside planned production capacity increase by 2029. Source: IDTechEx
The regulatory landscape is both complex and rapidly evolving
This is where regulations come into play. Regulations are wide-ranging and complex, but the most important ones in relation to pyrolysis are those that allow companies to use pyrolysis oil-derived plastics to count as recycled content. If jurisdictions do not allow this to occur or provide some other incentive, then there is little reason for companies to choose to use pyrolysis oil over crude oil. Even more concerning for the chemical recycling industry has been the emergence of new classifications of chemical recycling technologies by regulators that exclude them from being classed as recycling. These laws are primarily justified to curb carbon emissions released in these processes. It is notable that pyrolysis, due to the high temperatures involved, is energy-intensive. This energy is produced by burning the product gases from the process itself, resulting in the release of carbon into the atmosphere. Additionally, they consider the fact that relatively low yields of original waste become new recycled material.
Shell announces dropping of key chemical recycling target
Shell announced at the end of July this year that it has abandoned its goal of recycling 1 million tonnes of plastic waste into pyrolysis oil by 2025. While Shell attributed this target change to both slow technology development and a lack of available plastic waste feedstock, the underlying reason was regulatory uncertainty.
While they are still planning to complete work on the company's new pyrolysis oil upgrader in the Netherlands, which has a planned capacity of 50,000 tonnes per annum, this marks a shift in priorities by Shell, who had previously been more optimistic about the future of pyrolysis as a technology. The question remains as to how much this will be replicated in the industry and whether this will signal more companies to reconsider their investments in pyrolysis.
Considering that pyrolysis is currently the biggest technology by production capacity within the chemical recycling market, this announcement from Shell will have major implications for the market. While other technologies, such as depolymerization and dissolution, may see this as an advantage, it is notable that some of the same regulatory scrutiny is also being directed their way. This highlights the close impact that regulation is having on the industry, and lawmakers may have the deciding vote on whether these technologies are a success.
Chemical recycling market forecast
For further information on this market, including a discussion on players, an analysis of market trends, and a 10-year market forecast, see the IDTechEx market report, “Chemical Recycling and Dissolution of Plastics 2024-2034: Technologies, Players, Markets, Forecasts”. The report also contains a comprehensive summary of technology providers, a complete list of operational plants and projects, and an analysis of the latest R&D and technology trends with a commercial impact.
For more information on this report, including downloadable sample pages, please visit www.IDTechEx.com/ChemicalRecycling.
For the full portfolio of sustainability research available from IDTechEx, please visit www.IDTechEx.com/Research.