French utility company Suez, Canada-based PET recycler Loop Industries, and SK Geo Centric, a subsidiary of South Korean group SK, have abandoned plans for their PET chemical recycling plant in Saint-Avold, France.
The €450 million 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. The joint venture claimed the Saint-Avold plant would produce 100% recycled and infinitely recyclable virgin-quality PET resin.
Suez told Franceinfo, a public radio network, that the three companies have mutually agreed not to pursue the project.
Neither Suez nor Loop Industries responded to Sustainable Plastics’ request for comment.
The German newspaper Saarbrücker Zeitung has reported, citing Suez as a source, that the decision was a response to ‘inflationary cost growth’ and a poor macroeconomical situation.
Analysis of Loop Industry’s financial reports reveal that the company has likely run out of money. Its financial statement dated Oct. 15, 2024, indicates that its ability to ‘move to the next stage of its strategic development and construct manufacturing plants’ depends on its ability, amongst other things, to obtain financing. However, the company said it would run out of funds by the end of November 2024 if financing from Reed were not concluded.
When asked whether the transaction with Reed was successfully concluded, Loop Industries did not answer Sustainable Plastics’ query.
In January, the company announced it signed a non-binding memorandum of understanding (MOU) with Reed, a European investment firm, to commercialise its technology in Europe. Reed intended to provide €60 million in funding, half of which would fund the commercialisation of Loop’s technology, including the Saint-Avold project.
In September, however, Societe Generale, a French financial services firm, acquired 75% of share capital in Reed, which may have changed the firm’s plans.
Loop’s financial statement reveals the company has ‘incurred net losses and negative cash flow from operating and investing activities since its inception and expects to incur additional net losses while it continues to develop and plan for commercialisation.’
As of Aug. 31, 2024, the company’s liquidity stood at $2,403. It expects to receive an initial amount of $11,080 from Reed and ‘certain insiders’ are committed to provide bridge financing of $2,000 in case of delays in funding. It added that ‘there is no assurance it will succeed’ in securing that financing.
“There is no assurance that the Company will be successful in attracting additional funding. Even if additional financing is available, it may not be available on terms favourable to the Company. Failure to secure additional financing on favourable terms when it becomes required would have an adverse effect on the Company’s financial position and on its ability to execute its business plan,” the latest financial statement on Oct. 15 reads.
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.