LyondellBasell to take plastics recycling global with new investments - CEO

Author: Joseph Chang

2021/05/11

NEW YORK (ICIS)--LyondellBasell aims to significantly expand its footprint in both mechanical and molecular (chemical) recycling of waste plastics on a global basis with the US, China and eventually India the next targets, its CEO said on Tuesday.

“In mechanical recycling I’d like to see us take a position in the US similar to what we have in Europe, preferably with a waste handler. If we can duplicate the model we have in Europe, that would be ideal,” said Bob Patel, CEO of LyondellBasell, in an interview with ICIS.

LyondellBasell in December 2020 expanded its Quality Circular Plastics (QCP) joint venture with SUEZ focused on mechanical recycling with the acquisition of Belgium-based plastics recycling company TIVACO, bringing total capacity for recycled plastics to around 55,000 tonnes/year from 35,000 tonnes/year.

“We have other such M&A projects under way in Europe to acquire more mechanical recycling [assets]. I could also see us building mechanical recycling facilities in Europe,” said Patel.

LyondellBasell has a target of producing 2m tonnes/year of recycled or renewable PE and PP by 2030.

“We also want to focus much more in China on mechanical recycling for locally produced waste,” he added, noting that a recycling venture in China could involve its local partner Bora.

LyondellBasell and Bora have a 50/50 joint venture cracker and downstream polyethylene (PE) and polypropylene (PP) facilities in Liaoning province.

“To get to the 2m tonnes, mechanical recycling globally is a big part of that, and we aim to be active in mechanical recycling in all the major regions and possibly in India at some point,” said Patel.

The company views plastics recycling as a growth business, and there will be meaningful capital investments down the road.

“To size the investment in mechanical recycling, individual projects are in the tens of millions [of dollars], so I could imagine us spending $100m-200m a year on both organic and inorganic [investments] in mechanical recycling – that would be on the high end. It’s very manageable and we can continue to build out the footprint,” said Patel.

CHEMICAL RECYCLING
On the chemical-recycling side, LyondellBasell has a pilot plant in Ferrara, Italy using its proprietary MoReTec technology involving catalysis.

The plant converts mixed plastics waste into pyrolysis oil that can then be fed into naphtha crackers. However, volumes are small at this point.

“We have a pyrolysis process that also includes catalysis, and that’s the part that makes us unique compared to the other pyrolysis units out there today… The aim is to have greater yield of pyrolysis oil and less yield of ash or carbon,” said Patel.

In April, LyondellBasell started offering chemically recycled PE and PP under its brand name CirculenRevive using pyrolysis oil sourced from third parties.

CirculenRevive products are available to customers in Europe and will be made available to customers in the US later this year.

“My hope is that in the next couple of years, we’re at a point where we can build a 100,000-200,000 tonne/year waste input scale facility. World-scale, ultimately we think over time you could build units that are as big as 400,000 tonnes of waste processed annually,” said Patel.

Key benefits of molecular recycling include greater scale, less need for sorting of plastic waste and the same output as virgin plastic available for use in all applications.

The CEO foresees the company achieving “medium industrial scale” on the chemical recycling front by 2025 and “scaling up to very large plants” by the second half of the decade.

And chemical recycling plants won’t be limited to Europe where naphtha crackers are abundant.

LyondellBasell has mixed feed crackers in the US in Channelview, Texas, and at Wesseling and Munchsmunster in Germany. Wesseling is a good location to build a molecular recycling unit, he noted.

“And then of course in China over time, as we continue to build phase 2 and phase 3 of Bora, if we want to do molecular recycling in China, we would place those [units] near naphtha crackers. So given our feedstock flexibility and footprint, we can take molecular recycling globally,” said Patel.

“My sense is that the first [commercial plant] would probably be in Europe, and possibly at Wesseling,” he added.

Logistics and infrastructure will be key to building sizeable molecular recycling plants, as large quantities of waste plastics would have to be funnelled to the location.

“That will be the prerequisite in terms of how we decide location, and it’s going to require collaboration with local municipalities and with a waste handling company to really incent us to build something like this. That infrastructure for collection will have to be supported by local governments,” said Patel.

“The advantage is that we don’t need to have much sorting as we do in mechanical recycling. In mechanical recycling, we really have to sort polyolefin waste whereas here it can be mixed waste of all plastics,” he added.

A medium-scale molecular recycling plant could cost in the range of $200m-300m, but this is a very early estimate, he noted.

RECYCLED PLASTICS PREMIUM
The CEO is optimistic about brand owners and consumers being willing to pay premiums for recycled plastics.

“I think brand owners will pay that and consumers ultimately will be willing to pay an additional cost. If you think about packaging, it’s a very small part of the overall cost of anything we buy at the grocery store or elsewhere,” said Patel.

“So ultimately I think the model that works best is passing it through to the consumer. Brand owners are expressing very high levels of interest and recognise that recycled plastics – whether from pyrolysis oil or mechanical recycling – have to be priced differentially to incent the investment. We’re already seeing very good receptivity,” he added.

See more from the ICIS interview with LyondellBasell CEO Bob Patel in the 21 May special issue of ICIS Chemical Business, in association with the American Fuel & Petrochemical Manufacturers (AFPM).

Interview article by Joseph Chang