French utility company Suez, Canada-based PET recycler Loop Industries, and SK Geo Centric have clarified their reasons for abandoning plans for a PET chemical recycling plant in Saint-Avold, France.
In a joint statement sent to Sustainable Plastics, the companies said ‘the investment required for the project significantly exceeds the initial budget, directly calling into question the economic model of the project’.
The partners initially estimated the required investment at €440 million.
However, a recent review of the project’s profitability found that ‘none of the solutions considered ensure the viability of the competitiveness of the recycled plastic that would have been produced there’.
The companies said the project’s predicted profitability deteriorated for two main reasons: increased investment expenditure and the overall economic context.
Regarding the first, Suez, Loop, and SK Geo Centric said they were faced with increased costs for construction materials and skilled labour, as well as costs for adapting the project site.
Moreover, the team found that it was impossible to duplicate the studies carried out at SK Geo Centric’s recycling cluster in Ulsan, South Korea. They said that ‘regulatory provisions’ in France and South Korea are ‘too different’, which would have required the team to significantly redo its overall and detailed engineering studies.
As for the overall economic context, the partners said the increase in energy costs, higher raw material costs, and low PET prices have slowed down negotiations with potential customers.
The Saint-Avold project project was first announced in 2020, construction was scheduled to begin in 2025, and start-up in 2027. The project had public support from the French Ministries of Industry and Ecology, the Grand Est region, and the Saint-Avold Synergy region community.
The 70,000 tonnes/year plant was slated to use Loop’s depolymerisation technology. The company has been trying to commercialise its proprietary no-pressure, low-heat process to break down PET into monoethylene glycol (MEG) and dimethyl terephthalate (DMT), precursors to PET.
Analysis of its financial reports, however, reveal that the company has likely run out of money.
Saint-Avold is the latest planned chemical recycling investment to be abandoned this year. In July, Shell backtracked from its goal to turn 1 million tonnes of plastic waste into pyrolysis oil by 2025, saying its goals are ‘unfeasible’. PET chemical recycler Ioniqa filed for bankruptcy in October.