Regulation and recycling

Nov. 12, 2018
By now we know the outcome of the Nov. 6 US midterm elections. Held in an environment in which the most extreme detractors of each party described their counterparts as bent on establishing a nationalist dictatorship on one hand or a communist pogrom on the other, most who went to the polls viewed it as an opportunity to either endorse the first 2 years of US President Donald Trump’s time in office or repudiate them.

By now we know the outcome of the Nov. 6 US midterm elections. Held in an environment in which the most extreme detractors of each party described their counterparts as bent on establishing a nationalist dictatorship on one hand or a communist pogrom on the other, most who went to the polls viewed it as an opportunity to either endorse the first 2 years of US President Donald Trump’s time in office or repudiate them.

One of the hallmarks of the Trump administration has been the rollback of regulations. He campaigned on it and he’s delivered.

Regulations administered by the Environmental Protection Agency, the Food and Drug Administration, the Department of Interior, the Department of Transportation, the Department of Agriculture, the Department of Labor, and the Department of Education, among others, have all come under the axe. Among the changes directly bearing on oil and gas, corporate average fuel economy (CAFE) standards were repealed, rules governing methane emissions during oil and gas production revised, and a replacement to the Clean Power Plan proposed.

Wither petrochemicals?

Against this backdrop the chemical industry has taken a renewed interest in recycling finished plastics. “Plastics waste is hurting the chemical industry as well as the environment,” according to an article published by McKinsey & Co. announcing its report, “The Circular Economy in Petrochemicals: Plastics Recycling.” It said, “By taking the lead on recycling, chemical players could add a new dimension to the industry and help solve the problem.”

According to a 2017 study in the peer-reviewed journal Science Advances, of 8.3 billion tonnes of plastic made since its introduction, 6.3 billion tonnes have become plastic waste. Only 9% of this waste has been recycled, with 79% either in landfills or free-floating in the environment as trash, and 12% incinerated.

As with any big problem, there’s big money to be made solving it. And the petrochemical industry is beginning to realize it would rather get a cut of the recycling pie than not. According to Mc-Kinsey, industry based on recycled plastics could represent a worldwide profit pool of as much as $55 billion/year as soon as 2030.

McKinsey acknowledges that “an array of policy decisions will be needed at the national and local levels” to get plastic waste to stop flowing into landfills and incinerators and start moving into recycling instead.

Dubai-based Gulf Petrochemicals & Chemicals Association was even more explicit in “Circular Economy and Plastics,” a March 2018 report it published with Nexant Inc.: “Government policy will be a driving factor in efforts for plastic sustainability. The impact of regulation is more tangible than consumer sentiment. It is a key, unavoidable element of business operations and regulation reform on plastics will impact the chemical industry.”

Three paths

The McKinsey report outlines three principal approaches to plastics recycling:

• Mechanical recycling, which physically processes used plastic back to pellets, leaving the polymer chain intact.

• Chemical recycling, which breaks condensation-type polymers such as polyethylene terephthalate back down to their monomers.

• Processing back to feedstock through catalytic or thermal means.

McKinsey projects the volume of plastics going to recycling could increase fivefold by 2030, to 220 million tonnes/year, also pointing out the early role played by aluminum and paper manufacturers in establishing recycling in their industries as an example of the type of role plastics manufacturers could play.

SABIC is already working on pyrolysis technologies designed to process plastics back to feedstock and McKinsey notes that SABIC and other large petrochemical companies could buy startups active in the field in addition to developing their own techniques. McKinsey estimates that, given sufficient scale, plastic waste-based feedstocks would be competitive with refinery-based feeds at prices as low as $65/bbl, and highly competitive from $75/bbl and up.

Now, will the right regulatory environment emerge? And if so, in what country?