LyondellBasell Circular and Low Carbon Solutions to take multi-pronged approach for growth – EVP

Joseph Chang


NEW YORK (ICIS)–LyondellBasell will take a multi-pronged approach to boost production and sales of recycled and bio-based plastics as demand accelerates through 2030, the head of its Circular and Low Carbon Solutions business said.

The company is targeting the production of 2m tonnes/year or more of recycled and renewable-based plastics by 2030, with this business generating at least $1bn of incremental earnings before interest, tax, depreciation and amortisation (EBITDA) by that time. It expects to reach an intermediate EBITDA target of $500m by 2027.

For the 2m tonne/year production target by 2030, recycled plastics will dominate the volumes, said Yvonne van der Laan, executive vice president, Circular and Low Carbon Solutions at LyondellBasell, in an interview with ICIS.

LyondellBasell on 1 June announced a major step to decarbonise its operations with a memorandum of understanding (MoU) with Technip Energies and Chevron Phillips Chemical to potentially build a demonstration unit using Technip’s electric steam cracking furnace technology at its Channelview, Texas, site.

Electric cracking would involve the use of renewable energy to heat cracker furnaces rather than natural gas, allowing up to a 90% reduction in furnace greenhouse gas emissions (GHG).

“This is very much related to our GHG reduction ambitions and also very helpful [in creating] a platform for the products coming out of Channelview to improve their carbon footprint,” said van der Laan.

This would include chemically recycled plastics produced downstream from the Channelview cracker which can process pyrolysis oil from plastic waste.

LyondellBasell is targeting a 42% reduction in Scope 1 and 2 GHG emissions, and a 30% reduction in Scope 3 emissions by 2030 versus a 2020 baseline.

Meanwhile, the company’s recent announcement to postpone the closure of its Houston refinery to the end of Q1 2025 versus a previous target of the end of 2023 in no way delays plans or targets for its Circular and Low Carbon Solutions business, the executive said.

“This has been carefully analysed, and it actually provides for a great transition to prepare the site for some of the repurposing we are looking at,” said van der Laan.

The Houston refining site will play a key role in the Circular and Low Carbon Solutions business as a regional hub. The company sees the extension enabling a smoother transition between the shutdown of the refinery and the implementation of retrofitting and plastics recycling projects.

Options being evaluated include recycled and renewable-based feedstocks, and green and blue hydrogen. The projects under development would connect to existing assets in the Houston area and use existing infrastructure on the refining site including hydrotreaters, pipelines, tanks, utilities, buildings and laboratories.

“We have two big flagship sites – one in Cologne, Germany, and one in Houston around our Channelview, Texas, operations, and this perfectly fits into that plan,” said van der Laan.

Demand for recycled plastics is expected to far outpace production capacity in the years ahead.

“On the demand side we see very strong fundamentals which is basically the driver for our strategy going forward. On the packaging side, the consumer brand owners have made very ambitious pledges on recycled content, and this is where the most urgent demand is,” said van der Laan.

“It’s society, it’s consumers and this is partly being translated into regulations to support it,” she added.

Demand for recycled polyethylene (PE) and polypropylene (PP) of around 15m tonnes/year is expected to outpace supply by 50% by 2030, according to the company. Of that demand, 65% will come from packaging of which 55% is attributed to food packaging in particular.

“In our view of that demand outlook, we have only taken into account what is currently announced [in terms of regulations]. Anything that comes on top will be a further tailwind for that demand development or acceleration,” said van der Laan.

In November 2022 the EU Commission proposed draft legislation which would replace the existing Packaging and Packaging Waste Directive (PPWD) with a new Packaging and Packaging Waste Regulation. Part of the regulation proposes minimum recycled content targets of 10-35% by weight by 2030 and 50-65% by 2040, depending on packaging type. The proposals have not yet been adopted into law.

“Brand owners are obviously reacting not just to regulations but to what consumers want, and more and more are willing to pay for it,” said van der Laan.

Reducing carbon footprint is complementary to plastics recycling, said the executive.

“It’s complementary and it means that in the future, we will make sure we work with new technologies that also address carbon footprint,” said van der Laan, pointing to electric furnaces as one of those technologies.

“We are working to see how we can ultimately get to net zero for those sites, which means that any product coming from those sites will also meet GHG targets,” she added.

LyondellBasell’s MoReTec technology to chemically recycle plastic waste is also not only high yielding and scalable, but also has a lower carbon footprint than standard pyrolysis processes, she pointed out.

“In general terms, I can say that it’s lower than typical standalone ‘no-frills’ pyrolysis technology. With MoReTec, we can integrate it with our cracker streams so we can do something with the gas stream and not just the liquid. But we are also doing other things to make sure that in terms of GHG emissions, it will meet our own ambitions,” said van der Laan.

In November 2022, the company decided to move forward with engineering to build a chemically recycled plastics plant using its MoReTec technology at its Wesseling, Germany, site near Cologne. A final investment decision is targeted for the end of 2023, and start-up of the 50,000 tonne/year output plant is expected by the end of 2025.

Future MoReTec plants could scale much higher than the 50,000 tonne/year capacity at its first planned project, especially around its Cologne and Houston hubs where there is high population density and existing infrastructure.

“If you want to process [the feedstock] in steam crackers, you still need to hydrotreat or post-treat it and that’s exactly what you have to do at scale again, because otherwise the costs are too high,” said van der Laan.

“So that’s where our integrated large-scale hubs come in, because that’s where you localise or centralise these streams to do this in an efficient way,” she added.

LyondellBasell is already using third-party pyrolyisis oil feedstock at its crackers in Cologne, Germany, and Channelview, Texas, to ultimately produce recycled PE and PP downstream, and will continue to source supply in addition to producing its own feedstock supply with MoReTec plants.

In May, LyondellBasell, Infinity Recycling and Invest-NL made an equity investment in the Netherlands-based Pryme to help the company commercialise its pyrolysis process for recycling plastic waste. Pryme is building a chemical recycling plant in Rotterdam with scheduled start-up later this year, and plans to build a second larger project by 2025.

LyondellBasell plans to use some of the pyrolysis oil from Pryme at its Cologne, Germany, hub.

In the US, LyondellBasell in February signed a long-term contract with Nexus Circular for the latter to supply LyondellBasell with around 24,000 tonnes/year of recycled feedstock. The material will be produced at Nexus Circular’s new chemical recycling facility, which will start construction in 2023, and be used in LyondellBasell’s Channelview, Texas, cracker.

“These are two examples of how this fits very well with our integrated hub strategy at those larger sites where we can really concentrate and scale. It is part of our strategy going forward,” said van der Laan.

LyondellBasell will also engage further upstream with the waste collection ecosystem to help ensure a steady stream of waste plastics supply.

“Part of the strategy is that we also move upstream with partners to make sure we create the required sorting capacity, so that plastic that today ends up in incineration or landfill is getting sorted and treated properly to serve as feedstock,” said van der Laan.

In March, LyondellBasell and European waste treatment company EEW Energy from Waste signed a letter of intent (LOI) which includes exploring a long-term partnership to extract and recycle plastics out of incineration waste streams. This could include construction of waste pre-sorting facilities at or near EEW incineration plants to remove plastics from waste streams bound for incineration, and investment in advanced sorting facilities.

In the US, Cyclyx International, ExxonMobil and LyondellBasell in October 2022 signed an agreement to develop an advanced plastic waste sorting and processing facility around Houston, Texas.

The $100m Cyclyx Circularity Center is expected to start up in 2024 and produce 150,000 tonnes/year of plastic waste feedstock to supply LyondellBasell’s and ExxonMobil’s chemical recycling operations.

“This allows us to offer to the players that own the waste, a better alternative and access to a value chain that today they cannot access through a landfill or incineration model,” van der Laan said.

While much of the focus in plastics recycling has been on chemical recycling, LyondellBasell continues to invest in mechanical recycling as well.

In April, LyondellBasell agreed to buy out partner Veolia’s 50% stake in mechanical recycler Quality Circular Polymers (QCP) with locations in Belgium and the Netherlands, taking full ownership.

Earlier this year, LyondellBasell has also made an investment in solvent-based recycling company APK based in Germany, and acquired Italy-based recycled polymers compounder Mepol, which also has operations in Poland.

Having both chemical and mechanical recycling capabilities addresses both mixed plastic waste flexibles that are hard to recycle, and rigid plastics that are easier to process through mechanical recycling. And downstream, the recycled plastics coming out of chains serve different markets.

“Advanced (or chemical) recycling is very much in demand by the brand owners for food packaging solutions or medical uses, whereas our mechanical recycling solutions are also ending up with brand owners in packaging such as bottles and caps,” van der Laan pointed out.

More chemical recycling capacity is needed to address the issue of hard-to-recycle plastic films and flexibles such as bags – an issue in the public spotlight lately with an ABC investigative report on plastic bag recycling.

“That’s what advanced recycling does, really [addressing] the hard-to-recycle plastic waste which is flexibles, films (including multi-layer) and mixed plastic waste,” said van der Laan.

Interview article by Joseph Chang

Clarification: Recasts 19th paragraph to reflect the PPWD’s proposed new targets for plastic packaging recycling rather than recycled content.


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