Mura targets 1m tonnes/year of plastics recycling capacity in operation or under construction by 2025 – exec

Joseph Chang

21-Nov-2022

NEW YORK (ICIS)–Mura Technology is targeting 1m tonnes/year of plastics recycling capacity under operation or construction using its technology by 2025, a senior executive said.

“It’s our target that by 2025 we will have over 1m tonnes/year of projects that are finding themselves in build or that have been commissioned, either by us or through our licensing partner KBR. And then obviously we have much, much more aggressive targets by 2030,” said Oliver Borek, chief commercial officer of Mura Technology, in an interview with ICIS.

“If we achieve a 1m tonne/year target by 2025, there’s no reason why we can’t easily surpass the 2m tonne/year mark by 2030,” he added.

PROJECTS WITH DOW
In September, Dow and Mura Technology announced that Mura would build the largest chemically recycled plastics project in Europe at Dow’s site in Boehlen, Germany, at 120,000 tonnes/year of capacity. A final investment decision is targeted by the end of 2023 and the plant could start up by 2025.

Dow and Mura plan to construct multiple 120,000 tonne/year projects in the US and Europe, adding as much as 600,000 tonnes/year of capacity.

The 120,000 tonnes/year is output capacity and is comprised of around 100,000 tonnes/year of liquid and 20,000 tonnes/year of equivalent in gas, Borek explained.

Most plastic recycling companies disclose capacities as input capacity – as in the volume of waste plastics that can be processed.

“The reason we don’t follow the market convention on this is that the feedstock can be very variable – it will include non-target materials, etc. So using input as a nomenclature is something we’ve avoided just for that reason, because you know feedstock is not feedstock is not feedstock,” said Borek.

TECHNOLOGY USING SUPERCRITICAL WATER
Mura’s technology – called HydroPRS (Hydrothermal Plastic Recycling Solution) uses supercritical water to break down polymer bonds. At a certain level of heat and pressure, the water starts to have properties of both a gas (steam) and a liquid.

The targeted input plastic waste feedstock is polyethylene (PE) and polypropylene (PP) with a minimum limit of 85% and a maximum total impurities limit of 15%, according to exclusive engineering and construction partner KBR.

“We essentially boil the plastic at very high temperatures and pressures, and the oil that comes out of our system tends to be better quality because we don’t produce char. We have a very high conversion rate and some of the impurities that exist in the waste plastics streams come out with the water, so they don’t find their way into the oil,” said Borek.

The water acts as a buffer between the short-chain molecules becoming highly reactive with one another after they are cleaved from the long chains (polymer bonds), thus avoiding char byproduct. The water also donates hydrogen, adding to stability of the molecules, he explained.

“And that gives us a very high yield. We don’t have a lot of other reactions going on in our process. Also very important is that this happens on a continuous basis – it’s not a batch process. It’s continuous for about 30 minutes,” said Borek.

All inorganic substances are dissolved in the water and only organic material finds its way into the oils. While there are still some impurities in the oil, the concentration is much less versus typical pyrolysis processes, he noted.

After passing through a flash distillation column, the oil comes out in a distribution of fractions – from naphtha to distillate gas oil, heavy gas oil and heavy residual oil – and Mura can skew the distribution to some extent.

The heavier cuts could be used for waxes and lubricants, and heavy wax residue could be used as a bitumen binder in asphalt, he noted.

Some gas will also be produced – in the C1 to C4 range – which can also be used as cracker feedstock or as fuel to, for example, power boilers.

Mura is better able to scale its technology to different capacities as it uses water as a heat transfer agent, the executive pointed out.

“Think of it like cooking your spaghetti. It doesn’t matter whether you have a small pot or a large pot – you can still get it al dente,” said Borek.

In the process, the plastic comes into the supercritical water and is surrounded evenly on all sides, he noted.

“So very similar to spaghetti, the water goes all around and that’s why the noodles cook so well. They’re all even,” said Borek.

CARBON FOOTPRINT
On carbon footprint, the Mura process produces materially less carbon dioxide (CO2) emissions than virgin plastics production, based on an independent life cycle analysis (LCA) to be released shortly. The Mura process also has a lower carbon footprint than two known pyrolysis processes, he said.

“That will be a very strong selling point since it will highlight to an extent that we are best in class. We hope this in conjunction with our business model to build scale and be able to work with many partners simultaneously, will be a way for us to materially address these concerns of finding enough recycled content,” said Borek.

“It cannot be understated that this [lower carbon footprint] will be a prerequisite for any company in our space. To achieve long-term success, if we don’t improve on fossil production and show we are better than average relative to our peer group, I don’t see how that’s going to work,” he added.

Mura also has a 120,000 tonne/year project planned in Seattle, Washington, US, called Mura Cascade ELP (End-of-Life Plastic) with start-up expected in late 2024 and offtake by an unnamed petrochemical company.

The Mura project in Seattle will make use of hydroelectric power while the project at Dow’s Germany site will use renewable energy, “turbocharging” the resulting products’ green credentials, he noted.

UNDERSTANDING SUSTAINABILITY DRIVERS
There has been a sea change over the past couple of years on sustainability and how investors, analysts and brand owners are viewing sustainability, he noted.

“Everyone’s talking about carbon footprints [and circularity] and that has really infected the whole value chain, and things have gotten moving very strongly over the last year,” said Borek, who pointed out that Mura has had conversations with brand owners and converters but mainly with petrochemical producers with plastic resins production downstream.

“What we do in terms of health and safety and a lot of things make us very similar to a refiner. And so we view ourselves through that lens. We provide feedstock that a refinery would – a naphtha replacement,” said Borek.

“We interface very well with [the petrochemical] market, but at the end of the day, what’s driving this is not only them but their customers. We have to be very aware of, and very engaging with that base, which is unusual because you’re talking to the customer of your customer. But that’s really important because they are driving the market and you want to be very finely attuned to how this market will wind up looking,” he added.

NEXT PROJECTS
Coming up before the big project with Dow in Boehlen, Germany, and the Cascade ELP project in Seattle, Washington, US, will be Mura’s first commercial-scale plant in Wilton, Teesside, UK, scheduled for start-up in H1 2023, which could spur more interest in yet more projects.

The Wilton plant would have capacity of 20,000 tonnes/year of liquid product output and 23,500 tonnes/year of plastic input material, including gases.

“Once the Wilton plant comes online next year, that will provide a boost because people will have something to see and touch, and that is usually a catalyst for more interest,” said Borek.

The next projects with Dow would be concurrent rather than come after the first plant in Boehlen, Germany, is finished in 2025, he noted.

“Consecutive would take too long in the market, and we can take the learnings from one as long as we have enough of a head start, for the other. Once we get the first one going, the others will become simpler,” said Borek.

FINANCING OPTIONS
The financing for these projects – in the triple-digit millions range – would not come from Mura or Dow’s balance sheet but through third parties. The financing could be a mix of equity and debt, he noted.

While the overall financing market is very challenged today, well-structured and de-risked projects should be able to move forward, he said.

“If we look at the financial crisis in 2008, a lot of markets fell out of bed, but the project finance market was fairly resilient and there were deals still being done. Those deals got done because they were de-risked,” said Borek.

One aspect of a de-risked project is where there is committed offtake of the production at a certain price or price range, as well as committed source of supply at well-defined costs.

“There’s a lot of capital we’re looking for, but if we approach the right markets, which we have done and we structure our deals the right way and we de-risk our deals, then the chances are that we will still find money at levels that make sense and allow us to proceed,” said Borek.

LICENSING MODEL
Mura and licensing partner KBR have sold licences representing around 200,000 tonnes/year of capacity, including to South Korea’s LG Chem, Japan’s Mitsubishi Chemical along with other unnamed companies.

In June, KBR announced an additional $100m investment in Mura, bringing its aggregate investment in Mura to 18%. Other investors include Dow, LG Chem, Six Pines Investment (unit of Chevron Phillips Chemical) and igus GmbH.

“KBR has been very instrumental, and they have a very large resource footprint… We’re slowly on the road where we contribute to the market so significantly that you start seeing more of an equilibrium in the market because currently buyers outstrip sellers by a large margin,” said Borek.

Building scale will be critical for buyers to feel confident that the material will be available and at a reasonable price, he added.

UPSTREAM AND DOWNSTREAM INTERFACE
Mura focuses on both the upstream and downstream interface with the market.

On the upstream side, “that means when we go into the feedstock market, we don’t expect it to produce a product for us. We’ll take a certain quality we know they can achieve given their existing equipment. Then on our side, we perform additional cleaning up and preparing of that material so that we can put that into our own process,” said Borek.

“The second interface is on the other side when we have output we may need to clean up a little bit, depending on who our off-takers are,” he added.

A refinery may simply take the output without further processing while a cracker may require another step.

“We then have an additional hydrotreating step that we install in our facility to produce a cracker feedstock quality output,” said Borek.

“We manage those two interfaces, very aware of the fact that we don’t allow just anyone in the market to take care of it because it fundamentally affects the economics, the performance and a whole host of other issues in how we function and fit into the system. And I think this is a shortcoming that a lot of other companies have. We know best what our process requires so we take matters into our own hands,” he added.

DECOUPLING WITH VIRGIN POLYMERS
Ultimately, once the market reaches a certain level of equilibrium with sufficient volumes of chemically recycled plastics to meet demand, the recycled plastics market should decouple with that for virgin plastics.

“There is an extremely low correlation between the input of waste plastics [and hydrocarbon feedstock], and I would expect over the medium and long term, that the pricing [of recycled plastics] will be independent of the fossil market,” said Borek.

Interview article by Joseph Chang

Join us at the ICIS Recycled Polymers Conference in Atlanta, Georgia, US, 7-8 December

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