PRC ’25: US pyrolysis recycling players churning through regulatory, economic uncertainty

HOUSTON (ICIS)–As both regulatory and economic landscapes continue to change, production and commercialization progress among pyrolysis based plastic recyclers continues to be mixed heading into this year’s Plastics Recycling Conference (PRC).

Pyrolysis, a thermal depolymerization/conversion technology which targets polyolefin-heavy mixed plastic waste, or tires, is expected to become the dominant form of chemical recycling over the next decade.

This comes at a time when sought after food grade, natural colored mechanically recycled polyethylene (R-PE) and recycled polypropylene (R-PP) resins continue to be in tight supply and chemically recycled resin could help to close the gap.

However, all types of recycled resin face rising premiums compared to softening virgin markets.

REGULATION: FEDERAL AND STATE
Chemical recycling technologies, such as pyrolysis, have previously been under scrutiny at the federal level through Environmental Protection Agency (EPA) regulation. The latest 2023 stance, officials asked for more time to review the full life cycle and environmental impact of chemical recycling facilities before deregulating permit processes.

Counter to this stance and while not explicitly stated, it is assumed the Trump administration would likely be supportive of chemical recycling, due to the underlying petrochemical industry involvement and pro-business fundamentals.

At a state level, 25 states have passed bills classifying chemical recycling technologies as recycling technologies rather than waste management processes. This potentially opens the door for pyrolysis facilities in those states to qualify for state grants and tax incentives that are available to manufacturing operations as well as supports the case for recycled resin from chemical recycling processes to count towards post-consumer recycled (PCR) content minimums.

However, there is a catch: among the states that have accepted chemical recycling, there are a few states that explicitly exclude certain processes. For example, states such as Kentucky and Kansas are among those that exclude processes that turn plastic to fuel.

One example of this can be seen in the State of Kentucky’s HB 45, which notes, “Advanced recycling does not include energy recovery or the conversion of post-use polymers into fuel.” Similar language can be found in the State of Kansas’ SB 114, “Advanced recycling does not include incineration of plastics or waste-to-energy processes, and products sold as fuel are not recycled products.”

In these specific situations, pyrolysis may still not be counted as a form of recycling.

Similarly, there are several states which have passed or proposed passing laws which prohibit processes such as pyrolysis to count as recycling.

PYROLYSIS HURDLES FROM PCR/EPR MANDATES
States with plastic recycled content requirements have mixed views on acceptance of recycled content from chemical recycling, including pyrolysis.

Currently, five states – California, Maine, Connecticut, Washington and New Jersey – have passed PCR laws, through of which are currently active. However, none of these states are among the 25 mentioned above that have formally accepted chemical recycling into legislation. This fact means that it is often unclear if outputs from chemical recycling are ineligible to count toward PCR requirements, undermining the industry’s potential impact and growth.

In some cases, clarity is brought informally through “Frequently Asked Questions (FAQ)” documents, such as in New Jersey.

A notable exception exists in Washington, where its PCR law explicitly states: “Both mechanical and chemical recycling methods are acceptable.” This language demonstrates a more inclusive approach, contrasting with states like California and Maine, which remain cautious about embracing chemical recycling.

This mirrors uncertainty in extended producer responsibility (EPR) policies which are currently implemented on a state-by-state basis. At present, five states have passed plastic packaging related EPR – Oregon, Colorado, California, Minnesota and Maine.

However, the relationship between EPR and chemical recycling remains complex. A key issue lies in how EPR laws define acceptable “end markets” for collected plastics.

Oregon’s definition of responsible end markets appears tailored to traditional mechanical recycling, inadvertently excluding many chemical recycling technologies. This exclusion stems from the varied outputs of chemical recycling, which can range from plastics to fuels or chemical precursors, complicating their classification as traditional recycling. Pyrolysis is one of the recycling processes that produce multiple outputs, meaning that it will likely suffer from this definition.

INVESTMENT, PROGRESS MIRRORS FRAGMENTATION
As a result of these legislative hurdles, as well as financial burdens, lack of commercial success in the face of premiums, and public pushback on the environmental consequences of these processes, there have been project cancellations for chemical recycling in 2024. Two notable pyrolysis cancellations are Regenyx and Encina.

Announced this week, another US pyrolysis player, Brightmark, has filed for chapter 11 bankruptcy, thus placing their existing Ashley, Indiana plant in jeopardy, though with the hope that both existing and planned facilities will be able to continue operations in the future.

Per the bankruptcy filing, the Ashley facility, with an installed capacity of 100,000 tonnes, had been operating at less than 5% capacity.

Progress on the Thomaston, Georgia facility announced last year is on going.

Brightmark had previously cancelled plans for a separate Georgia facility.

Moreover, several facilities continue to see operational challenges and are also heard to be producing a minimal amount of material.

Despite these setbacks, pyrolysis is projected to have the most growth based on announced plants. According to data gather from the ICIS Chemical Recycling Supply Tracker – which tracks these facility announcements – the chemical recycling capacity could potentially grow 10 times by 2030, with a majority of that growth expected to come from pyrolysis.

Reasons for this include synergies with mechanical recycling by targeting different feedstock and the ability to handle a wider range of feedstock, reducing the degree of sorting needed.

Notable expected facilities include ExxonMobil‘s expansion plans, Braven Environmental’s recently announced plans, and LyondellBasell’s future plans for the Houston refinery.

The chemical recycling industry is nascent as well as controversial. As such, there is a considerable amount of both optimism and challenges. Despite all of the challenges on the horizon, the chemical recycling industry and pyrolysis continue to push forward.

Hosted by Resource Recycling Inc, the PRC takes place on 24-26 March in National Harbor, Maryland.

ICIS will be presenting “Shaping the Future of Recycled Plastics: Trends and Forecasts” on Monday, March 24th at 11:15AM in room Potomac D. As well as attending our session, we would love to connect with you at the show- please stop by our booth, #308.

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Focus article by Joshua Dill

Additional reporting by Emily Friedman