he circular economy initiative, which started to take hold a few years ago in Europe, is spreading rapidly to other parts of the world. The initiative entails gradually decoupling economic activity from the consumption of finite resources, and designing waste out of the system. European companies are leading the way but firms in North America, the Middle East, and Asia are also incorporating circularity into their strategies. The impact on the chemical industry of a sharper circular-economy focus could be enormous, with thermoplastics, synthetic fibers and rubber, and fertilizer nutrients the sectors likely to be affected the most.
The circular-economy concept advocates looking beyond the current take-make-waste extractive industrial model to positive society-wide benefits. It involves gradually decoupling economic activity from the consumption of finite resources, and designing waste out of the system. Underpinned by a transition to renewable-energy sources, the circular model builds economic, natural, and social capital. Resources are used in a more sustainable way by maintaining their use for as long as possible, extracting the maximum value from them while in use, and recovering and regenerating the materials at the end of their life. Under the scheme, materials are constantly cycled back through the value chain for reuse, resulting in lower energy and resource consumption.
Plastics, among the most ubiquitous and useful materials, have had a bad press for several years because of their environmental impact, especially in Asia. About 8 million metric tons/year (MMt/y) of plastic finds its way into the oceans, and Asia accounts for more than 80% of the total leakage. The UK-based Ellen MacArthur Foundation, launched in 2010 to promote the circular economy worldwide, says that if plastics continue to accumulate in the marine environment at the present rate there could be more plastics (850–950 MMt) than fish in the oceans by 2050. According to the UN Environment Program, 127 countries are introducing measures to prevent this, including bans on single-use plastics and greater use of recycling. For their part, plastics producers and consumers are establishing recycling systems, acquiring recyclers, or developing processes to reclaim used polymers or convert them into reusable hydrocarbon raw materials.
The chemical industry is adopting the circular economy in a big way. European companies are leading the way but producers in North America, the Middle East, and Asia are also incorporating circularity into their strategies. A major milestone was passed in January 2019 when more than 25 companies, led by Dow Chemical’s Jim Fitterling and Bob Patel of LyondellBasell, formed the non-profit Alliance to End Plastic Waste, pledging $1 billion, and subsequently $1.5 billion over five years, to support this aim. Founder members included BASF, Braskem, Chevron-Phillips Chemical, Clariant, Covestro, Dow, DSM, ExxonMobil, Formosa Plastics USA, Henkel, LyondellBasell, Mitsubishi Chemical, Mitsui Chemicals, Nova Chemicals, OxyChem, PolyOne, Reliance Industries, Sabic, Sasol, Shell, SCG Chemicals, Sumitomo Chemical, Total, and Versalis. As well as the chemicals and plastics producers, founders included consumer goods firms such as Procter & Gamble, waste-management companies such as Veolia and Suez, and plastics converters such as Berry Global.
Speaking earlier this year, Martin Brudermüller, CEO of BASF, said that the alliance had grown to more than 30 companies across the entire value chain, from waste management to producers of plastic packaging, from chemical producers to consumer goods companies. “[This is] a shoulder-to-shoulder [initiative seeking] to draw up a joint budget and then really take action,” he said. Brudermüller pointed out that 10 rivers around the world, including eight in Asia, are responsible for about 85% of the plastic that flows into the oceans. “What we want to do is close these rivers [to plastics waste] and then prevent new material from flowing into the ocean.” The alliance will also work with companies that have clean-up projects in the oceans. Only 18% of all plastic waste is recycled and about 58% goes to landfill.
From the government side, the European Commission, following its circular-economy action plan of 2015, has launched the Circular Plastics Alliance, a group of key industry stakeholders covering the complete plastics value chain. The alliance forms part of the Commission’s efforts to reduce littering of plastics, increase the volume of plastic material that is recycled, and stimulate innovation. The Commission estimates that less than 30% of plastics waste is collected in the EU, meaning that €70–105 billion ($78–117.2 billion) of business “is thrown away and lost to the economy,” according to Daniel Calleja Crespo, the Commission’s director general/environment. The Commission is inviting key industry stakeholders to join the alliance, particularly from sectors that account for most of European plastics demand, notably the packaging, construction, and automotive industries, which account for approximately 40%, 20%, and 10% of plastics consumption, respectively. Among other things, the Commission aims to ensure that 55% of plastics packaging is recycled by 2025. Current recycling rates in EU countries vary widely, from more than 55% in the Czech Republic to about 25% in Finland and France.
All participants in the chemical industry value chain will be affected by this issue, says Dewey Johnson, vice president, base chemicals and plastics, IHS Markit. “Plastics waste is a systemic problem where no single participant owns the solution,” Johnson says. “The challenge is how to get the entire web of participants together to arrive at successful solutions.”
A failure to properly address the challenge presents significant risks to demand and the industry’s license to operate, Johnson adds.
The infrastructure needed to increase recycling is currently inadequate and inefficient. “On the recycle side, infrastructure is underdeveloped, small in scale, and financially distressed,” Johnson says. Technology advances, including adoption and development of chemical recycling, will allow for the capture of a broader spectrum of plastics waste, but they are still at early stages of development. Successful deployment of chemical recycling would be less disruptive to the chemical industry as feedstock substitution would not displace prime plastics production. The technology, however, remains in the early development stages and major process innovations typically require a decade or more for commercial-scale impact.
Concerns around the impact of plastic waste threaten petrochemical demand growth compared to historical trendline assumptions, says Nick Vafiadis, vice president of plastics research at IHS Markit. A recent IHS Markit study, A Sea Change: Plastics Pathway to Sustainability, concludes that almost 50% of the virgin demand growth in 2018–30 for polyethylene (PE) and polypropylene (PP) is viable for recycling or displacement for the major demand centers, Vafiadis says. The analysis shows polyolefins, including PE and PP, hold 90% of total volume at risk. This represents over 20 MMt each of PE and PP. Almost 20% of the virgin polyvinyl chloride (PVC) demand growth in the same period is also viable for recycling or displacement.
According to IHS Markit, global demand for PE, the world’s most-used plastic, has nearly doubled during the last 20 years. IHS Markit expects 2018 global PE demand to exceed 100 MMt. However, significant new market pressures, including a rise in consumer expectations around sustainability, along with tightening environmental regulations in mature markets such as Europe and key growth markets such as China, could threaten future demand growth, which is why producers are keen to understand and plan for the implications, Vafiadis says.
There is a clear shift happening in the approach toward sustainability moving from reactive to proactive, says Robin Waters, director, plastics planning and analysis, chemicals, at IHS Markit. “In the reactive phase, the target was preventing littering and focusing on plastics waste,” Waters said. “Thereafter, the focus moved to managed disposal of plastic waste. Now, we are focused on circularity, which makes the producer a stakeholder in the careful management and reuse of plastic and reducing end-waste.”
Industry associations and individual segments have launched their own targets. Members of the European plastics manufacturers’ association PlasticsEurope are voluntarily targeting 60% recycling and re-use of plastics packaging in the EU by 2030 and 100% by 2040. Several circularity platforms have been established under PlasticsEurope for the individual plastics value chains, such as polyolefins, styrenics, and vinyls.
The American Chemistry Council’s sustainability principles also call for 100% recycling and re-use of plastics packaging by 2040. The US, currently the world’s second largest plastics producer, is something of a laggard among developed countries, recycling only 9–10% of its plastics consumption.
A study, Taking the European Chemical Industry into the Circular Economy, published by Accenture in association with Cefic in 2017 estimated that of the 106 MMt/y of chemicals and plastics delivered to EU customers, up to 66 MMt/y could be circulated or saved over the long term by the introduction or intensification of five molecule-circulating loops. These include substitution of fossil-derived raw materials by renewable raw materials, 12 MMt; energy recovery and re-use of carbon dioxide, 10 MMt; recycling by chemical and mechanical processes, 8MMt and 19 MMt; and product re-use, 17 MMt. Products for which recycling could be stepped up include bulk thermoplastics as well as synthetic fibers and rubber, and fertilizer nutrients. Accenture notes that already in Europe, 73% of all glass bottles are collected and recycled rather than thrown away, and scrap steel makes up 50% of the raw materials for new steel products.
The impact on the chemical industry of an increased circular-economy focus could be enormous. Paul Bjacek, resources research lead at the management consulting firm Accenture, estimates that, if the world adopts the same current and planned regulations as the European Union, recycling of the nine major thermoplastics could equate to 81.2 MMt/y of lost conventional capacity, or 162 world-scale polymer plants by 2030, compared with 2017. This would be equivalent to 19% of expected production capacity in 2020.
On the positive side, however, Accenture says that adoption by downstream and customer industries of circular-economy strategies, such as increased energy saving, could lead to a potential increase in demand of 88 MMt/y for basic chemicals, intermediates, and chemicals for consumers, a net 26% increase. The chemical industry could help reduce overall EU energy consumption by up to 37%, Accenture says.
There is no planet B
Numerous specific technological initiatives are being launched by individual companies. BASF has introduced the ChemCycling project to thermochemically recycle plastic waste and produce hydrocarbon feedstocks for use in its plants. It also says that its proposed acrylates project in India, expected to be a joint venture (JV) with the Adani group, would create BASF’s first carbon dioxide (CO2)-neutral production site, powered entirely by renewable and solar energy.
OMV (Vienna, Austria) is another company developing oil-from-waste technology. Its ReOil pilot plant, which began operations at the Schwechat, Austria, refinery in 2018, uses a thermal cracking process operating at more than 300 degrees C to transform about 100 kilograms/hour of used packaging into 100 liters/hour of synthetic crude oil. OMV is now exploring the potential for synergies in the ReOil project with Borealis, which produces petrochemicals and plastics on the Schwechat site. OMV, a 36% shareholder in Borealis, says that one more scale-up step of the plant is planned before reaching final industrial-scale capacity. Borealis itself owns two plastics-recycling companies in Germany—mtm plastics and mtm compact, acquired in 2016—and the Austria-based Ecoplast Kunstoffrecycling, acquired in 2018. The first is one of Europe’s largest producers of polyolefin recyclates, primarily for rigid injection molding. The second processes about 35,000 metric tons/year of mainly flexible waste, turning it into high-quality low-density polyethylene and high-density polyethylene recyclates, primarily but not exclusively for the film market. In a similar move, LyondellBasell and Suez jointly acquired the recycling firm QCP (Geleen, Netherlands) in 2018. QCP can process 35,000 metric tons/year of waste to make PE and PP recompounds.
Another approach to producing fuels from plastics waste is that of ReNew ELP (Redcar, UK). ReNew’s CAT-HR process uses supercritical water—heated and pressurized water—to crack the carbon-carbon bonds in plastics, creating short-chain hydrocarbons. Hydrogen released in the process combines with the mixture to make a range of hydrocarbon products: naphtha, diesel, vacuum gas oil, waxes, residues, and high-calorie process gas.
Meanwhile, Standard Gas (London, UK), has a disruptive modular technology producing certified end-of-waste clean gas that can be available for petrochemical feedstock. The concept is especially interesting for small-scale applications on-site and is regarded as the cleanest disposal route for a wide variety of waste types. The company takes hydrocarbon-based waste and turns it into synthesis gas. A key point is that the technology involves no burning or incineration, but rather an advanced pyrolysis that converts solids to gas followed by secondary and tertiary high-temperature thermal cracking, thus avoiding the creation of tars and resulting in an energy-rich gas.
In the US, Agilyx, a developer of chemical-recycling technologies for plastics, has started up a 10-metric tons/day plant at Tigard, Oregon, to depolymerize waste polystyrene (PS) into styrene monomer. American Styrenics (AmSty), a JV of CPChem and Trinseo, and Ineos Styrolution are already using the monomer in their PS plants. AmSty and Agilyx have formed a JV, Regenyx, to take over the Tigard facility. The partners will develop plans for a 50-metric tons/day facility, probably on the US West Coast.
Ineos Styrolution, an Ineos subsidiary, has also signed an agreement with GreenMantra Technologies (Brantford, Ontario, Canada) to use recycled styrene from GreenMantra’s PS depolymerization process at its manufacturing plant. GreenMantra’s catalytic upcycling process converts PS waste into two product streams: a primary low molecular weight PS and secondary recycled styrene.
In Europe, the multi-company alliance Styrenics Circular Solutions (SCS), and Agilyx said in March that they had achieved promising results from processing various post-consumer PS waste samples. SCS, with members including Ineos, Total, Trinseo, and Versalis, has provided Agilyx with mixed plastic waste samples, mainly from food packaging, such as yogurt pots, that were collected in several European countries, including Germany, France, and Belgium. Agilyx evaluated the composition of the waste raw material and subsequently recycled it back into the original monomer. “The average styrene concentration is typical of our experience with samples of high-impact polystyrene. Now, we are working on further optimizing process conditions for maximum yield,” says Norbert Niessner, SCS chair of technologies. SCS aims to improve further the styrene monomer yield from depolymerization while reducing the volume of co- products. “We want to find the optimal purity level of post-consumer plastic waste, before we move on to replicate the results at a commercial unit,” he says. Joe Vaillancourt, Agilyx CEO, says the potential for PS closed-loop recycling is enormous.
Another depolymerization project is a planned JV between Indorama Ventures and Loop Industries (Terrebonne, Quebec, Canada) to produce 100% sustainable polyethylene terephthalate (PET) resin in the US. Their plant, which should start production in 2020, will use Loop’s patented technology to produce dimethyl terephthalate and ethylene glycol (EG) from waste polyester bottles and fibers. The JV, Indorama Loop Technologies, will have a worldwide exclusive license to use the technology. Daniel Solomita, founder and CEO of Loop Industries, says, “We continue to make meaningful progress to commercialize our groundbreaking technology, including a new alliance with ThyssenKrupp and a multiyear framework agreement with the Coca-Cola system’s Cross Enterprise Procurement Group.”
Carbios (Saint-Beauzire, France) uses an enzymatic process to break down PET into EG and purified terephthalic acid (PTA). PET bottles are easily recyclable in their original form, with 58.2%—up to 95% in Finland and Germany—being recycled in Europe in 2017.
Covestro, meanwhile, is collaborating in the PUReSmart project to recycle polyurethane (PU) plastics back into PU raw materials and develop a complete circular product life-cycle. The four-year, EU–funded PUReSmart initiative groups nine companies and academic institutions in six European countries.
Covestro is also one of several companies that are developing polymer, in this case polyol, syntheses based on CO2. Another is Repsol with its Neospol polycarbonate polyol technology. CO2 is expected to be an increasingly important feedstock as commercial carbon capture and storage systems are developed and even mandated in future by governments. Covestro already produces polyol for foams and binders on a 5,000-metric ton/year plant at Dormagen using CO2 by-product from a nearby chemical company. The polyol, which contains approximately 20% CO2, is used to make PU foam mattresses and upholstered furniture. A more recent application is in the binder for the elastic underfloor of a hockey facility of a sports club at Krefeld, Germany. Several other applications, including elastomers, are under development. “The use of carbon dioxide as a new raw material is a promising approach for making production in the chemical and plastics industries more sustainable,” says Markus Steilemann, CEO.
This year Covestro sponsored an innovation prize for CO2-based technology from the nova-Institut (Knapsack, Germany), a research consultancy on bio- and CO2-based technologies. First prize went to Carbicrete (Westmount, Quebec, Canada) for cement-free concrete. Cement is replaced with ground steel slag and the concrete is cured with CO2 instead of heat and steam. Nordic Blue Crude (Porsgrunn, Norway), in second place, developed a process to make a synthetic oil from CO2, as well as renewable power and water. The oil is usable as diesel or kerosene and can be converted to gasoline. In third place was b.fab (Dortmund, Germany), which has developed technology to convert CO2, water, and renewable energy into value-added chemicals such as lactic acid.
Also active in CO2-based syntheses is Saudi Aramco. The company acquired the Converge polycarbonate polyols business in 2016 from the venture capital-backed Novomer (Waltham, Massachusetts), for “up to” $100 million. Scott Allen, R&D director at Aramco Performance Materials (Houston, Texas), says the Converge catalyst used to copolymerize epoxides, such as propylene oxide and CO2, can create a high-performance polyol, polypropylene carbonate, which contains up to 42% by weight of CO2. Novomer, in turn, is using the proceeds of the Converge sale to commercialize its ethylene oxide/carbon monoxide (COEth) process to make low-cost, sustainable C3 and C4 products, including glacial acrylic acid, butanediol, polypropiolactone, and succinic acid. The ethylene oxide (EO) is made from bioethanol.
Versalis (Milan, Italy), Eni’s chemicals subsidiary, in addition to its SCS participation, has its own circularity projects. The company has simulated the use of compact PS from post-consumer packaging such as yogurt cups or single-use plates and glasses, in the production of expandable PS grades suitable for thermal insulation. Parent company Eni plans to build a semi-industrial plant at Ravenna and industrial-scale plants at other Italian sites, including Porto Marghera, to produce biofuel for marine transport from the organic fraction of municipal waste. The company’s patented waste-to-fuel liquefaction technology is already being trialled on a pilot plant at Ravenna. Eni has signed a wide-ranging agreement with the Italian investment bank CDP, to develop this and other renewable energy projects.
Sabic announced in January 2019 that, together with its customers Unilever, Vinventions, and Walki Group, it is launching an initiative to manufacture certified circular polymers. The products will be manufactured by Sabic and used by its customers for packaging a variety of consumer products that will be introduced into the market in 2019. The certified circular polymers will be produced from a feedstock known as Tacoil, a patented product from Plastic Energy (London, UK), by recycling low-quality, mixed plastic waste. Sabic is building a plant to produce the oil at its Geleen, Netherlands, petrochemical complex. The finished certified circular polymers will be supplied to the three key customers for use in food and beverage packaging, and personal- and home-care products.
BP, a major producer of para-xylene (p-xylene); Virent (Madison, Wisconsin), a wholly-owned subsidiary of Marathon Petroleum; and Johnson Matthey (JM) signed an agreement in March 2019 to advance the commercialization of Virent’s Bioforming process to produce bio-p-xylene, a key raw material in the production of renewable polyester. Virent’s Bioforming technology, which is being developed with JM, produces drop-in reformate product from renewable sources that can be used to produce renewable fuels and be processed into less carbon intensive bio-p-xylene, the feedstock for bio-purified terephthalic acid using existing technologies. BP will contribute technical resources and has exclusive rights to negotiate becoming the sole manufacturer of bio-p-xylene using Virent’s technology. Charles Damianides, BP vice president/petrochemicals technology and licensing, says, “We consider Virent’s technology to be the leading route to commercial quantities of renewable bio-p-xylene that may enable BP’s existing petrochemical plants to produce a distinctive product in support of our commitment to advance a low carbon future. In our petrochemicals business we have also introduced our PTAir product line, a low-carbon PTA product, and we continue to work toward improving the efficiency of our operations.”
Waste as a resource
Arguably the largest circular manufacturing project announced so far is the proposed multi-company waste-to-chemicals (W2C) facility in the Botlek area of Rotterdam. The €200-million project, Europe’s first advanced W2C complex, will be implemented by a consortium of Shell, Nouryon, Air Liquide, Enerkem, and the Port of Rotterdam. Using Enerkem technology, it will convert 360,000 metric tons/year of non-recyclable waste, including plastics, into 220,000 metric tons/year of biomethanol. This is more than the total annual waste from 700,000 households. The plant will have twice the input capacity of Enerkem’s unit at Edmonton, Alberta. Air Liquide will supply oxygen and Nouryon hydrogen to the complex, and Shell and Nouryon will buy the bulk of the produced biomethanol for use as transportation fuel and in chemical production. The project is supported by the Dutch ministry of economic affairs and climate policy, the city of Rotterdam, the province of Zuid-Holland, and InnovationQuarter, the regional development agency.
In Canada, the Enerkem Alberta Biofuels plant is the world’s first major collaboration between a large city and a W2C producer. The plant, which has been in operation since 2014, has allowed the city of Edmonton to increase its waste diversion from 50% to 90%. It replaces more than 100,000 metric tons/year of landfill and produces 38 million liters/year of methanol and ethanol. At the beginning of 2018, the Sinobioway Group (Beijing, China) invested about C$125 million ($100 million) in a C$280-million Enerkem fund-raising. The investment is expected to create a JV to build a large number of Enerkem waste-to-fuel plants in China.
Plastics is not the only sector introducing circularity strategies. Other companies, including chemical producers, distributors, process owners, and engineering firms, are embracing the circular economy by developing technologies based on renewable feedstocks, reusing and recycling existing molecules tied up in consumer products that have reached the end of their lives.
Solvay, a partner of the Ellen MacArthur Foundation, says it is convinced that moving from the traditional linear model to a circular model is essential in helping to solve the many pressing environmental and societal challenges. Through its partnership with the foundation, Solvay is exploring solutions based on circular-economy principles in concrete business projects, using the company’s Sustainable Portfolio Management tool. Solvay says it generated almost half of its 2017 revenue from sustainable solutions—including those aligned with the circularity model.
In March 2019, Mitsubishi Chemical Holdings joined the Ellen MacArthur Foundation’s Circular Economy 100 (CE 100) initiative to acquire further knowledge and information about a circular economy and collaborate with other companies, governments, and academia, through collective approaches. Mitsubishi Chemical is the first Japanese chemical company to join the CE100 initiative.
In the fertilizer industry, Yara International and Veolia have joined forces to develop the circular economy in the European food and agricultural chain by recycling fertilizer nutrients and creating nutrient loops. The partnership integrates Veolia’s access to growing volumes of recovered nutrients and expertise in handling organic materials with Yara’s expertise in mineral fertilizer production and crop nutrition. The partners say their initiative connects the end and beginning of today’s linear food value chain and will effectively close the nutrient cycle. Veolia and Yara will develop new business models for a circular agriculture by establishing nutrient-recycling models in existing production processes as well as via local recovery, processing, distribution, and sales.
Michael Carus, CEO of nova-Institut, says that, while renewable raw materials are making only slow headway into petrochemicals and plastics markets, they are penetrating more rapidly areas that are not in direct competition with petrochemicals. These areas include fine chemicals, food ingredients, flavors, personal care, cosmetics, and pharmaceuticals, in which bio-based products often provide new functions and properties that petrochemistry cannot offer. He notes, too, that consumers are often prepared to pay a premium price for what they perceive to be sustainable products.
Conversion of agricultural waste, as opposed to food crops, into fuels and chemicals is another priority in bioprocessing. Clariant started construction of its first large scale commercial Sunliquid plant near Craiova, Romania in September 2018. The unit will convert around 250,000 metric tons/year of wheat and other cereal straw into 50,000 metric tons/year of cellulosic ethanol. By using waste from the process as fuel, the plant will be practically carbon-neutral, Clariant says.
DSM has one of the most eye-catching projects under way to reduce greenhouse gas (GHG) emissions. The company is testing a feed supplement, 3-nitrooxypropanol (3-NOP), which can reduce methane emissions from cattle by more than 30%. A single dairy cow generates about 3 metric tons/year of CO2 equivalent of enteric methane, which means that emissions from the world’s cattle are responsible for 4% of worldwide GHG emissions. Agriculture as a whole contributes 14.5%, a little more than the transport sector.
DSM’s Project Clean Cow, which is applicable to other ruminants such as sheep and goats, is not yet commercial, but could be launched on a small scale this year. DSM still needs to obtain regulatory approvals, and to work out how to make a commercial, as well as technical, success of the product.
Two Swiss companies, Agolin and Zaluvida, have similar, but naturally-derived, products on or nearing the market.
Separately, DSM and another Dutch company, Niaga, have developed technology that can make carpets fully recyclable. An estimated 1.8 MMt/y of carpets end up in landfill in the US alone. The technology, which can be applied to other products, uses 90% less energy and zero water compared with current manufacturing processes.
Part of the solution
The examples above are not intended to be a complete list of chemical industry circular economy projects, but an illustration of how the industry, often unfairly labeled as the cause of the problem, can in reality be an important part of the solution. New technology and circularity have the potential to transform environmental protection. Finite natural resources, including fossil fuels, minerals, and metals, should lead to circularity being embraced in many parts of the world, solving the mounting waste problem by doing away with the very concept of waste altogether.