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March 04, 2016 06:00 AM

Agilyx halts plastics-to-oil scheme in face of low oil prices

Jim Johnson, Plastics News
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    Agilyx went searching for alternatives as consistently low oil prices bruised the plastics recycling business.

    Low prices are causing Agilyx, a US converter of non-recyclable plastics into crude oil, to discontinue its operation in the state of Oregon after ploughing millions of dollars of investment into the project in recent years.

    Instead of making synthetic oil, the company is reconfiguring its pyrolysis facility to recycle polystyrene into styrene monomer that then will be used by others to make new products.

    The company said it held out the hope that plastics-to-oil would, one day, become economically viable.

    Agilyx went searching for alternatives as consistently low oil prices bruised the plastics recycling business.

    Traditional recyclers have seen the value of their recycled plastics fall because they are tied to lower virgin resin prices created by cheaper oil, while Agilyx uses pyrolysis, a thermochemical reaction, to transform mixed recycled plastics in synthetic oil that is then sold to refineries.

    However falling crude oil prices had put the squeeze on that business model, the firm's chief executive Ross Patten said.

    “We have been doing work back in our facility...where we have been taking different plastic streams and processing them through our pyrolysis technology and we found that we can very efficiently produce a styrene monomer from polystyrene products,” Patten explained.

    “So we're in the process of modification of our existing plastics fuel unit and we're going to purpose it to make a styrene monomer.”

    Agilyx is spending “less than” $1m (£709m) to make the change. “Our present investors are underwriting the shift in technology,” Patten said. “This is a different model that has other capabilities.”

    While market conditions are causing Agilyx to make the shift in Oregon, the company holds out hope that its pyrolysis technology ultimately will financially succeed in plastics-to-oil.

    Work is being done to develop a plastics-to-oil project in the Northeast as Agilyx is finalising permits. The company also has an agreement to sell output from the plant to a refinery and has identified a site, Patten said.

    But, he added: “The stark reality of building the plant with oil prices where they are today on a per barrel basis is very difficult to handle.”

    So those low oil prices have Agilyx zeroing in on creating styrene monomer from recycled polystyrene. “We have a number of interested parties in acquiring that product.

    "And we see our entry into that market as positive in that we will be producing a product that is truly recyclable. The styrene monomer can go directly into manufacturing new polystyrene,” Patten said.

    Agilyx has been studying a possible change for about a year and expects the plant modifications will take about 60 days to complete once they begin.

    The firm currently employs 30, and Patten said he saw that number dropping by “a few” under the new business plan.

    The company expects to secure its used polystyrene feedstock from a variety of sources, including material recovery facilities, municipalities, industrial companies, retailers and even school lunch programmes.

    “We looked at different waste plastic streams and we saw it was an area that needed more attention and we focused our chemical engineering people on that area,” Patten said about polystyrene. “The technology of pyrolysis can do the job and create a nice product.”

    Agilyx has attracted millions of dollars of investments over the years, including cash from business tycoon Richard Branson, the head of the Virgin group of companies.

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