In early October, Coca-Cola trumpeted the transformation of plastic trash recovered from the sea into new drink bottles. But they buried the lead. This feat isn’t limited to the lab. The proof-of-concept was carried out by technology and manufacturing partners with commercial capability today.
Dutch-based Ioniqa Technologies chemically recycled the PET plastic used in drink bottles into components that Indian manufacturer Indorama Ventures recombined into brand-new PET. Ioniqa opened its first commercial chemical recycling plant this past July in the Netherlands. The recycled material is processed by Indorama and then is transformed into products for Unilever.
By the end of next year, the circular economy of chemically recycled plastic is expected to come to the United States when Canadian-based Loop Industries commissions its new plant in Spartanburg, South Carolina. And PureCycle Technologies expects its Ohio facility to be up and running in 2021.
More than technology, this is a story about how globalization may help to resolve some of the environmental wreckage it creates. Regional regulations on recycled package content and stakeholder pressure have led to ambitious commitments from global consumer products companies. Those commitments have, in turn, enabled ample capital funding for new recycling technology development and now deployment.
Regulations and Commitments Ensure Demand for Recycled Plastic
The European Union (EU) finalized a mandate this year requiring all member states to ensure at least 25% of plastic beverage bottles are comprised of recycled material by 2025. The requirement jumps to at least 30% by 2030. Moreover, the EU requires member states to collect at least 77% of plastic beverage bottles for recycling by 2025 and 90% by 2029. A California bill recently passed by the state assembly called for 10% recycled plastic content by 2021, 25% by 2025 and 50% by 2030. However, California’s governor vetoed the bill due to late amendments making it easier for beverage makers to pursue waivers from the law’s provisions.
Recycled content already accounts for about 15% of plastic beverage bottles, so 25% bogeys by 2025 seem modest. And several global beverage companies have announced more ambitious targets than any current regulations. PepsiCo is seeking to have 33% recycled content in its plastic beverage bottles by 2025, while Danone and Nestle want to reach 50% by then, and Coca-Cola is aiming for 50% by 2030. Unsurprisingly, the European-based companies are out in front of their American counterparts by several years.
New Technology and Physical Plant Needed
There are a few problems with creating a circular economy for food-grade plastics, like those used in beverage bottles. The first is collecting plastic trash. Only about one-third of the 100 billion plastic bottles produced annually in the U.S. get recycled. And collection has gotten more difficult since China stopped importing most of the country’s recycled material. Public-private partnerships, anchored by the beverage industry, are investing to improve collection and processing. But it will take a mixture of consumer incentives and manufacturer accountability to boost recovery rates.
The other impediment is chemistry. The type of plastic used in beverage bottles, polyethylene terephathalate (PET), is not of the same quality once it is ground up during the standard mechanical recycling process. As a result, most beverage bottles get “downcycled” into lower value uses like carpeting and clothing. This is more like a waterfall economy — new virgin PET plastic materials (derived from petroleum) enter at the top in applications with the highest quality standards, like food and beverage, and each time the PET gets recycled it finds a lower value use.
A truly circular economy requires chemical recycling of PET and other plastics. Chemical recycling breaks plastics down into its basic building blocks. These components can then be reassembled to make new PET with same quality as PET made directly from petroleum. The technology to do this has existed for several decades, but scale is required to make the process economically efficient. Raheem et al. (2019) find most chemical processes recover 80 to 90% of the mass of recyclable material. So although chemical recycling does not promise a completely circular economy, its pretty close.
The market has responded. According to venture capital firm Closed Loop Partners, more than five dozen companies are working to commercialize new recycling technology. The majority of existing commercial facilities in North America are used to create synthetic fuels, displacing some demand for crude oil and natural gas.
Loop Industries’ South Carolina plant promises to be the first circular chemical recycling process in North America when it comes on line late next year. The capacity of the plant is already more than 50% subscribed by supply agreements with the likes of PepsiCo, Coca-Cola European Partners (bottling company), and Danone. Loop is pursuing additional deals with high margin consumer products companies — think branded apparel and cosmetics. Recycled plastic will remain more expensive than virgin plastic for years to come. The cost premium is more easily absorbed by companies with valuable brands.
To achieve scale quickly, chemical recycling technology will need to be licensed by existing manufacturers with big capital budgets. For example, one of Loop’s partners is the German conglomerate Thyssenkrupp. Most of the recycling facilities will need to be close to their end markets. The economics of transporting recycled material require most of the feedstock to come from within 200 miles. Fortunately, since the U.S. is increasingly drowning in plastic trash, this is not a problem!
Don’t Forget the Other “R” — Reduce
Zheng and Suh (2019) estimate the lifecycle greenhouse gas (GHG) emissions of plastic will continue to grow even if all plastic is recycled and we shift to bio-based sources for new plastic. This is because the demand for plastic is growing at 4% per year — implying a doubling of plastic consumption within a generation. A reduction from current GHG emission levels is possible only if we use 100% renewable energy in the production of plastics, something that is not currently feasible.
Recycling still generates GHG emissions, and chemical recycling actually generates more emissions than mechanical recycling. A study published by Dutch think tank CE Delft implies every metric ton of plastic recycled using a chemical process generates 0.8 metric tons of carbon dioxide emissions above what is generated using a traditional mechanical process. Sorry, no free lunches.
The promise of advanced recycling technology is now a reality. But the sobering statistics on plastics consumption are a good reminder we won’t be able to invent our way out of making inconvenient changes to behavior.