Meeting ambitious circular plastic targets will require the use of all three current major routes, mechanical recycling, chemical recycling and bio-based plastics, Mirjam Mayer, vice president Circular Economy Solutions at Borealis, told ICIS in an interview.
“To actually reach that scale on circular products by 2030 we do see all of the things you’ve mentioned playing a role, mechanical [recycling], chemical [recycling], and bio-based… we’ve started on mechanical recycling… we also have with Renasci [in which Borealis has a majority stake] a chemical recycling plant, and will be a key user of the ReOil plant [operated by parent company OMV],” Mayer said.
ReOil is OMV’s proprietary pyrolysis-based chemical recycling technology, which uses mixed polyolefins as a feedstock. OMV has a pilot plant at Schwechat, Austria, with an installed input capacity of 16,000 tonnes/year. OMV is expected to start an industrial-scale ReOil unit with a processing capacity of up to 200,000 tonnes/year by 2027. Borealis collaborates with OMV on ReOil. OMV holds a 75% stake in Borealis (ADNOC owns the remaining 25%).
Borealis could not say how much each route would individually contribute to overall targets but did say that chemical and mechanical recycling would provide a “significant proportion” of that target. A difficult regulatory environment, however, has meant that “for better or worse I think renewables will be a bit less of the 2030 polyolefins portfolio than we initially anticipated,” Mayer said.
Under Borealis’ vision, chemical recycling will complement rather than replace mechanical recycling.
“We believe mechanical should be the first one to approach given its advantages in GHG footprint, but chemical recycling is a really important complement, for one because it has a drop-in quality. Even at very end of life after mechanical recycling you can use chemical recycling,” Mayer said.
Nevertheless, there remain several key potential barriers that need to be overcome to ensure the growth of the chemical recycling sector
“[It’s an] exciting time, [for chemical recycling] but I think for the broader industry, a lot of plants have been announced but been delayed. We’d all hoped technology would develop faster. I think some of the players have been struggling with tech readiness, and one of the barriers that remains is the acceptance on regulation - and one of those is of course mass balance and how accounting rules will be,” Mayer said.
This mirrors comments from players across the pyrolysis oil market (currently the largest chemical recycling market in Europe) in recent months. The European pyrolysis oil market remains structurally short, and while additional capacity is set to come onstream in 2024, demand is expected to continue to outpace supply throughout H2.
Despite structural tightness, buying interest in 2024 to date has been lower than that seen in 2023, largely due to ongoing legal uncertainty over approaches to mass balance accounting and how pyrolysis oil might count towards EU-mandated recycled content targets under the proposed Packaging and Packaging Waste Regulation (PPWR).
The ongoing legal uncertainty is expected to continue to impact the market in H2.
Legal uncertainty is centred on mass balance accounting rules and whether pyrolysis oil will be countable towards recycling targets, given the ambiguities in the definition of recycling contained within the Waste Framework Directive (a definition to which most EU legislation on waste management and recycling refers back).
In mass balance, a certified volume of renewable or recycled material is input across a production run but may not be evenly distributed across each individual product.
For example, a plant may use 30% recycled material overall, but one piece of produced packaging could contain 100% recycled material and the next 100% virgin material or any mix between those two extremes.
Via this method, market players are able to state that they use a certain percentage of recycled or renewable material in their products, without having to prove that percentage in each individual product produced.
Mass balance is widely used in a number of industries and is not exclusive to either mechanical or chemical recycling.
There are different proposed accounting rules for mass balance, all of which alter the possible recycled polymer output allocations and, therefore, profitability throughout the chain, pyrolysis oil’s competitive position against mechanical recycling, and the sector’s attractiveness to investors.
The EU’s Technical Advisory Committee (TAC) had been due to take a decision on mass-balance accounting rules under the Single-Use Plastics Directive (SUPD) at the end of March.
It is not just in the chemical recycling space where clarity on regulation in Europe could help foster growth in the industry.
“A clear set of rules on which waste shipments are allowed within the EU. It’s also important to see how international trade will work, but first I think it would be good to see rules on shipments. I think we’ve been hampered by not knowing one day to the next if you can ship waste. With bio-based it’s making sure you level the playing field with fuel… then you’ll get the best sub-material that will come out as a product,” Mayer said.
Despite seeking more legislative clarity, there are recent pieces of legislation that Mayer sees as positive steps for the industry.
“One of the things that was positive was the announcement around PPWR [the EU’s Packaging and Packaging Waste Regulation] – that was something very much welcome… it sets the right tone of where the industry needs to go,” Mayer said.
The proposed PPWR includes measures such as minimum mandated recycled content targets. There are currently structural shortages of available suitable packaging material to reach these targets, but Mayer does see them as achievable.
“I think we’re looking at inclusion in polyolefins of 20-30% [recycled content] in Europe by 2030 from an overall polyolefin industry perspective… 20-30% across PO applications is one scenario I think is realistic,” Mayer said.
“You’ve got packaging which will be mandated by PPWR and then ELV [the EU’s draft End-Of-Life Vehicle directive revision]. Of course there is some backtracking on previous pledges from players across the value chain that could cause a delay. But if people invest it could even exceed that,” she added.
The draft ELV includes proposed minimum recycled content targets of 25% in vehicles by 2030, with 25% of that target [equating to 8.25%] having to have come from End-of-life vehicles.
It is not just legislators that have a role to play in fostering growth, but also the industry itself.
“What we also need to get to more is a design for circularity [which encompasses design for recycling, design for reuse, design for ecoefficiency] approach to begin with... that will require more harmonisation and standardisation, and people will need to be more willing to compromise on qualities than they did before,” Mayer said.
“To be honest, companies could do a lot themselves to make that a reality, but clear rules and end user acceptance will help. The second thing is the infrastructure itself, aside from technology it’s the waste management, the sorting technology [etc]” she added.
Across multiple mechanical and chemical recycling sectors, access to sufficient high quality sorted waste feedstock is seen as one of the major barriers to growth. Borealis does see an opportunity for companies to do more around infrastructure to facilitate this.
“We do see at the moment, we as Borealis or as broader group we need to develop some of that ourselves, but you can ask the question should some of that already be done? Should you need to do that with every technology? We have great collaboration with TOMRA or Reclay, for example, but in the end really making sure that all of the waste being produced and that all of the waste finds its home in the right technology, it’s something [where] we’re keen but where more work needs to be done,” Mayer said.
When asked which new developments Mayer was most excited by in the circular economy space, she highlighted opportunities in mechanical recycling.
“I’m really excited by the possibilities mechanical recycling can offer. We have two FDA [the US Food and Drug Administration] non-objection letters this year for specific post-consumer recycled high density polyethylene (R-HDPE) and [recycled] polypropylene (R-PP) grades, so do see that mechanical recycling can principally be taken to food-applications,” Mayer said.
"Dialling up the quality of mechanical recycling is something I find exciting because it opens up a lot of possibilities where people [currently] think of downcycling, and you go to other parts of the world where it’s a less valuable product. I do think on recycling moving up to the next level is something I find exciting,” she added.
Non-objection letters are provided by the US’ Food and Drug Administration for food-contact suitability in the US. In the EU, certification by the European Food Safety Authority (EFSA) is needed for food-contact applications. EFSA criteria for food contact are different from those of the FDA and are widely seen as more stringent.
For example, EFSA requires that 95% of the feedstock used in food-grade recycled plastic must have originated from a food-contact source.
The difficulty and cost of separating material to meet EFSA’s 95% rule have been barriers to the creation of food-grade post-consumer material across recycled polyolefin applications in Europe. This is one of the drivers behind brands in Europe exploring the use of chemically recycled polyolefins.
“[It is] clear chemical recycling needs to be part of the solution and I wish anyone success in that space, and we’ll need every drop of pyrolysis oil to get circular in the polyolefins space,” Mayer said.
Packaging, though is not the only area where Mayer sees growing interest in the use of recycled material.
“What I’m proud of in Borealis is that we’ve developed solutions in all the end-use industries we are active in; of course, our main focus has been packaging, but it’s not just packaging… That you see it taking hold in applications such as mobility, infrastructure, energy, and appliances is really great; people don’t just see it as a license to operate, but they also see value in it,” Mayer said.