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A recent report from RaboResearch suggests that the advanced recycling industry continues to expand, with a high volume of collaborations and projects being announced in 2021, and new players emerging in regions including East Asia. However, criticisms of advanced recycling are also mounting, impacting the outlook of some of the industry’s biggest companies.
In March, RaboResearch reported that there could be 140 advanced recycling plants worldwide, with a total capacity of three to four million metric tonnes, by 2025. The group’s new report, released in September, draws on its earlier predictions for the advanced recycling industry and gives some idea of how this growth may be achieved.
RaboResearch identifies a number of advanced recycling projects that have been announced in the last six months, focused on testing or rolling out new technology, securing feedstock, and investing in infrastructure solutions. This includes intentions to build more than 70 additional plants.
Announcements from companies already involved in the industry include Brightmark’s plans to put US$680 million into a plastic-to-fuel plant to treat plastic waste and PureCycle Technologies’ proposed investment of US$440 million to build a cluster location in the USA. Notably, these investments are focused on North America, a key market for advanced recycling.
Another significant announcement is TRACKCYCLE, a blockchain-enabled traceability solution for hard-to-replace plastics, supported by Circulor, Total Energies, Recycling Technologies, and Innovate UK. The TRACKCYCLE solution is aimed at ensuring compliance with manufacturing standards at every stage of the advanced recycling process. RaboResearch adds that this announcement addresses a criticism of the industry: lack of traceability in the value chain.
Showing interest from elsewhere in the value chain, oil companies are reportedly becoming key investors in advanced recycling. Shell announced the acquisition of a 21.5% equity share in the technology provider BlueAlp, a joint venture that will potentially involve conversion units being built in the Netherlands and Singapore. Meanwhile, BP has reached a memorandum of understanding with Brightmark to explore opportunities for plants in Germany, the Netherlands, and Belgium.
According to the report, packaging convertors and feedstock suppliers are the most active parties across the value chain in speeding up the rollout of advanced recycling. RaboResearch claims this interest has grown since its last report and is likely to continue expanding. Convertors and suppliers apparently gain valuable experience from partnerships with the advanced recycling industry, as well as strategic access to chemically recycled feedstock that enables companies to meet escalating recycled content targets.
Some of the major partnerships announced by convertors and suppliers include Sealed Air’s US$5 million investment in the Closed Loop Circular Plastics Fund and two supply agreements from Berry Global, which is seeking to secure chemically recycled PP.
2021 has also seen the rise of East Asia-based companies becoming more active in the advanced recycling industry. The South Korean company SK Geo Centric has set the target of becoming the world’s largest urban oil field using plastic waste and, as part of its commitment to this goal, has made significant investments in Loop Industries, Brightmark, and PureCycle Technologies. Other companies emerging in this market include Mitsui and Kumho Petrochemical, both seeking to establish advanced recycling plants in the region.
While RaboResearch implies that these investments show increasing interest in developing advanced recycling into a large-scale and commercially viable industry, there are still many practical, financial, and economic challenges going forward.
This includes criticism from NGOs and media outlets, which have argued that the technology is still unproven, too costly and has a worse-than-advertised environmental impact, while planned investments have faced ongoing delays. Critics also claim that the technology is a greenwashing tool for companies to avoid other waste management solutions that have drawn more widespread negative attention.
Some of the biggest criticisms levied at the advanced recycling industry have come from Hindenburg Research. In one report, the research group lambasted PureCycle’s approach to funding, claiming it had not yet generated any revenue despite garnering large investments, and suggested that the company was seeking to scale up some of its advanced recycling technologies despite safety concerns being identified at the laboratory level.
In another report published in 2020, Hindenburg Research critiqued Loop Industries for similar issues with funding and revenue, and published comments from previous employees of the company that implied its technology for breaking down PET into its base chemicals to produce virgin-quality resin was “impossible”. As noted by RaboResearch, both reports resulted in significant fluctuations in the companies’ share prices – with PureCycle’s dropping by 40% on the day Hindenburgh Research’s report was published. PureCycle is also facing a class action lawsuit from investors – the results of which may have consequences for the entire industry – at the time of RaboResearch’s report.
However, even for some of the most criticised players in the industry, growth continues. As suggested by RaboResearch, the number of partnerships and investments announced in 2021 appears to show that collaboration will be key to continuing developments in the advanced recycling industry. Going forward, it is likely that companies will need to consolidate a more trustworthy image in order to attract further investments.