Chemical recycling may need a success story to sway skeptics

ORLANDO, Fla.—Would a Tesla-type success story in chemical recycling bring in capital and help speed up that industry's development?

That was one of the questions put before the audience at a recent American Chemistry Council conference, where an industry crowd looked at what it will take for the nascent technology to become a regular part of the recycling landscape.

Some sympathetic investors on a panel argued that the advanced recycling sector, also called chemical recycling, would benefit if a Tesla- or Airbnb-like success story emerged from its ranks.

It would help sway skeptical investors and policymakers with a tangible example of how the technology can work, proving the case that it should get more funding and support, they said.

"We've seen this in other industries, not to use the obvious examples, but (consider) Tesla and Airbnb," said Bridget Croke, managing director of green investment firm Closed Loop Partners. "If we can have one winner like this that becomes the dot, dot, dot of (advanced recycling), so everybody else can grow behind that, I think that would be a huge boon.

"I don't think we're at that point yet in the innovation curve where we understand how the whole system is going to work," she said. "Some of it won't unlock until we get a few successes. But I do think that we need to have a couple of big wins for all the rhetoric around the challenges (to change). The challenges will still be there, (but) they just won't be the top of the conversation."

Similarly, an executive at the clean tech investment firm that owns part of chemical recycling firm Nexus Circular, said a major success would help change the narrative.

"(After) the first couple of big facilities that run for a year at massive commercial scale and have a good back story to tell, then you can go to all the ecosystem participants we've been talking about and say, 'Hey, I told you so. There is a big opportunity here,'" said Will Thorburn, assistant vice president of clean technology strategy and investments at Cox Enterprises. "Until we have that I think we're still going to be having some of the same kind of dialogue."

It would bring money that's currently sitting on the sidelines, said Ed Gillespie, CEO of Abundia Global Impact Group.

"The first one or two that really get it done will enable the ones that are in the background to start pushing through because money will fall to the alternatives," said Gillespie.

All three spoke at the ACC's inaugural Innovation and Circularity Summit: Advanced Recycling and the Future of Plastics, June 28-29 in Orlando.

Figuring out how to grow the advanced recycling industry—which uses heat or chemicals to break down plastics for recycling as opposed to using traditional mechanical methods like grinding—was a major theme at the event.

Several large consumer goods makers on another panel said they see the technology as important to helping them meet their public commitments to use more recycled plastic in their packaging.

But they also said they're waiting for bottlenecks to be solved.

In their case, the bottleneck is that they can't get nearly enough recycled plastic made from chemical recycling for them to rely on, at least now.

Barnaby Wallace, global commercial lead for packaging for Mars Petcare, said they're using a limited amount of material but would like to use more in direct food contact packaging.

"It's, I think, limited in terms of its impact," he said. "We have plans. We've been spending the last 18 months, 24 months, getting qualifications done and understanding supply chains."

"Advanced recycling is a great opportunity for us but it takes time to set up the capacities," Wallace said. "We've been working with industry partners to try to find availability of materials that can then flow through to us."

He said supply problems are industry-wide, but he noted Mars will be launching the material into more products in the second half of the year.

"We're pleased that we're getting some traction," he said. "It's not at scale yet but that's an industry-wide issue we need to address. As scale develops, we're going to be using that material and into 2024 and 2025 we'll be, you know, sort of on our way."

As well, Canadian frozen food supplier McCain Foods said it's exploring advanced recycling for its packaging but like others, is having material availability problems.

The soonest it could get material is the end of next year, an executive said.

"We've been doing some testing in continental Europe and we believe we're going to get that material by the end of next year, but not for North America, which is our largest market," said Arianna Wolff, senior manager for global sustainable and circular packaging.

Similarly, supply challenges are hurting plans by fast food chain Wendy's to use advanced recycling in its polypropylene drink cups, an executive told the conference during a keynote presentation.

Liliana Esposito, chief corporate affairs and sustainability officer, said the material "isn't there today" to consistently meet the company's goal of 20 percent recycled content in its cups.

"One of the challenges we had is that the advanced recycling material that we had planned, and still plan, to include in the cups isn't there today," Esposito said.

Getting enough waste plastic feedstock for advanced recycling is a barrier, according to Jeremy Wallach, a partner at consulting firm McKinsey & Co.

"As we think about feedstock, the barrier to scaling has really been just that: How do we get the tens of thousands or some cases hundreds of thousands of tons of feedstocks available to feed the advanced recycling investments," Wallach said during another panel at the ACC event.

Plans by consumer product companies to use recycled plastic in their packaging, at announced levels between 15-50 percent by 2025, is a major source of demand, he said.

"This is driving a tremendous amount of demand for high-quality recycled content," Wallach said.

But he also suggested government policy could increase supply, including from deposit return systems, "pay-as-you-throw" municipal curbside systems that charge residents more for waste disposal than recycling, and extended producer responsibility programs for packaging.

A 2022 McKinsey study said advanced recycling could grow from its very small levels today up to 8 percent of global plastics demand by 2030, if significant investments are made.

"Advanced recycling could satisfy 4 to 8 percent of total polymer demand by 2030 and would require the deployment of more than $40 billion in capital investment over the next decade," the study said. "Although that may seem like a small portion of the total market for plastics, it demonstrates significant growth over today's near-zero percent."