Quantafuel expects to reach positive cashflow in 2022, updates on project progress

LONDON (ICIS)–Norway-headquartered chemical and mechanical recycler Quantafuel expects to reach positive cashflow by the end of 2022, following the ramp-up of several of its facilities next year, the company said during its Q3 quarterly update on Thursday.

The majority of Quantafuel’s operations are pyrolysis-based chemical recycling, but it is also building a combined chemical and mechanical recycling plant and sorting line in Kristiansund, Norway. The plant is expected to double its sorting capacity from 10,000 tonnes/year to 20,000 tonnes/year in 2022. The company also expects to take a decision on the building of a permanent chemical recycling line on the site by the end of the year.

Quantafuel acquired mechanical recycler Replast in 2020, which had an existing mechanical recycling plant at Kristiansund.

At its site in Skive, Denmark, Quantafuel will begin phasing up to full capacity from December following a turnaround in Q4 to replace some of its pumps to better control gas pressure.

The plant will have an eventual nameplate capacity of 20,000 tonnes/year of input mixed-plastic waste, and an output of 16,000 tonnes/year of pyrolysis oil – equating to an 80% yield.

Proof of concept is expected by the year-end, following which each of its four lines will be brought on stream one at a time. The company expects an average utilisation rate of 60% at Skive in 2022.

The plant will predominantly use mixed polyolefins post-consumer waste as an input source.

Typically, pyrolysis-based processes seek to limit polyethylene terephthalate (PET) content in bales – due to oxygenation – chlorine containing plastics such as polyvinyl chloride (PVC) – due to corrosion risks – along with nylon and flame retardants. They also typically aim to minimise moisture content, because loose water molecules in the reactor can cause changes to pressure values.

The company’s nearby sorting line in Aalborg, Denmark, which is being built to feed the plant with sorted waste volumes and will have a matching input capacity of 20,000 tonnes/year, is expected to be operational in the second quarter.

The company is also planning to add:

• A 140,000 tonne/year sorting plant and an 80,000 tonne/year pyrolysis-based chemical recycling plant in Esbjerg, Denmark, which is expected to come on stream in 2023
• A 100,000 tonne/year pyrolysis-based chemical recycling plant in Amsterdam, the Netherlands, which is expected to start up in 2023-2024
• A 100,000 tonne/year pyrolysis-based chemical recycling plant in Sunderland, the UK

A key factor in the decision to build a plant in Sunderland was good access to shipping routes, which would lower the plant’s carbon footprint, the company said. The company is also expecting to add further capacity.

During the call, the company also said that it expected customer specifications to intensify as chemical recycling ramps up in scale and that this would require ongoing modifications to its facilities to meet future demands.

Chief commercial officer of Quantafuel Chris Lach said: “If you put 20,000 tonnes, which is 16,000 tonnes of oil, in to a 2m [tonnes/year] cracker for oil you are not so sensitive about the specification so there is more leeway today than in future because you have a dilution effect because you feed into a large stream of fossil feed.

“As we ramp up, as volumes are bigger – if you feed 300,000 tonnes of pyrolysis oil into a cracker it is much more crucial that your specifications are where they need to be. That’s why we have the joint development agreement with BASF, and that’s what we’re working on and that development will take time… this depends on our purification, but also the quality of the plastic that we used.

“That’s why we are trying many different plastic types today, to find out how far we can go, while still staying in these specifications.”

New sorting capacity from waste managers and mechanical recyclers, targeting the use of mixed-plastic polyolefin waste, is due to come on stream in 2022. Mechanical recyclers are increasingly exploring the use of mixed-plastic waste.

This is because supply of mono-sorted high density PE (HDPE) and polypropylene (PP) waste bales is short in Europe. With a number of new packaging projects scheduled for 2022 – due to the ongoing sustainability pressure on fast moving consumer goods (FMCG) brands – mono-sorted HDPE and PP bales availability is expected to remain low throughout 2022.

Players have previously explored the use of mixed-plastic waste, although low yields and the complexity of sorting ultimately made these attempts uneconomical.

Sharp increases in single material bale prices across 2021, ongoing structural shortages, developments in sorting technologies, and firm R-HDPE and R-PP pellet values (which are at record highs in Europe) mean using mixed polyolefin waste as an input has become economically viable, particularly given that shortages are expected to last into the mid-term

This has resulted in pyrolysis-based chemical recyclers exploring new types of waste bales so as not to compete with mechanical recycling. In some cases, this has seen chemical recyclers explore the use of reject bales that contain a maximum of 0.5% PVC content that are currently commonly used by the refuse derived fuel (RDF) sector.

“We are integrating into the strong upstream players, not working against them, and the likes of Remondis, Corepla, they are happy to give us plastics that today are not used for anything but incineration… If today you try to use a feedstock that is usable for mechanical recycling you will face really high input cost and you will have trouble securing that. But that simply is not the case for Quantafuel,” Lach said.

Focus article by Mark Victory

ICIS is currently prototyping a mixed-plastic waste report, covering mixed-polyolefin, MRF reject, and PVC-free reject bale grades of mixed-plastic waste, along with wider supply and demand trends in the chemical and mechanical recycling markets. To find out more about the new report, or to receive a copy of the prototype, please contact Mark Victory at mark.victory@icis.com