Turning Trash into Treasure: Plastic Recycling Technologies
Over the long Memorial Day weekend, many attended parties and parades honoring those who served while celebrating being with loved ones. As you picture the day, images of those ubiquitous red solo cups come to mind, or perhaps patriotic-themed plastic BBQ plates and coolers filled with bottled water or bottles of soda. Now think of the all cleanup and the mountains of plastic waste collectively generated by the country in just that one day.
Plastics are one of the most prevalent and problematic waste materials due to their slow degradation and detrimental effects on ecosystems. Depending on the source, somewhere around 5%, 9%, or 15% of plastics are recycled in the United States, and worldwide, that number is around 9% of all plastic ever made. According to the Environmental Protection Agency (EPA) in 2018, the latest date for which there is data, plastic products waste generation reached 35.7 million tons in the United States, or 12.2% of total Municipal Solid Waste (MSW), an increase of 4.3 million tons (54.4%) from 2010, primarily from the durable goods and the containers and packaging categories. In this article, we delve into three types of plastic recycling and discuss some companies developing technologies for a cleaner future.
Chemical Recycling
Chemical recycling involves using chemical reactions to break down plastics into their molecular components to produce high-quality raw materials, such as converting polymers into their constituent monomers or other useful products.
Norway-based Agilyx ASA (AGYX) is a technology licensor and a recycler. Historically, plastic recycling has been challenging because collecting, sorting, and recycling has often been more expensive than producing virgin plastic. One of the most significant barriers to recycling plastics is the challenge and cost of getting the right types of plastic waste to the right recyclers. To address this, Agilyx launched Cyclyx, a consortium-based supply chain company that works with municipalities, retailers, corporations, and universities to increase the amount of plastic waste sent to the appropriate recyclers.
Along with AmSty, Agilyx has a 50/50 joint venture facility in Tigard, Oregon, called Regenyx, that converts post-use polystyrene into its original components under the PolyRenew label. The facility showcases Agilyx technology at a commercial scale which supports its technology licensing business. In 2020, Agilyx and ExxonMobil created a joint venture to recover and sort plastic waste.
Loop Industries (LOOP) depolymerization technology breaks down previously unrecyclable PET (polyethylene terephthalate) plastic and polyester fiber waste into their base building blocks, dimethyl terephthalate (DMT) and mono ethylene glycol (MEG). These monomers are then purified and re-combined (polymerized) into Loop-branded PET plastic and polyester fiber that can be used in food-grade packaging, such as water bottles, or for footwear and clothing.
Last month L’Oreal’s (LRLCY) Garnier brand launched its first micellar cleansing water in an upcycled bottle that uses Loop’s technology. On May 2, Loop announced that, along with SK Geo Centric, it will be building a manufacturing facility in South Korea starting this year with an expected completion date in 2025 to commercialize Loop’s technology in the Asian market. The joint venture will be 51% owned by SKGC and 49% by Loop. In connection with this facility, Loop and On AG, a subsidiary of On Holding AG (ONON), announced a signed Letter of Intent by On to purchase fibers for use in footwear and apparel. The announcement followed a two-year technical due diligence process to validate Loop’s technology.
Mechanical Recycling
Mechanical recycling involves traditional recycling techniques such as sorting, cleaning, and melting plastic waste to create new products.
PureCycle Technologies (PCT) converts polypropylene plastic waste into like-new plastic and just last month announced that its first commercial-scale facility, Ironton, had received certification for its mechanical completion. When fully operational, this facility is expected to have an annual production capacity of 107 million pounds of ultra-pure recycled (UPR) resin. The company is also developing other locations, such as Georgia, South Korea, Japan, and Belgium, with a goal of 30 commercial recycling lines by 2030. The company’s share price took a beating earlier in the year but is up over 50% since its March low.
Tomra Systems ASA (TMRAF) provides sorting and recycling solutions, including metal and plastic waste technologies. The company has developed sensor-based sorting systems that efficiently separate different types of waste, facilitating the recycling process.
Veolia Environnement SA (VEOEF) is not a pure play in this area as it has three primary environment-oriented business lines: water, waste, and energy. In 2022 the company provided 111 million people with drinking water, managed 3,506 wastewater treatment plans, treated 61 million metric tons of waste, operated 823 waste processing facilities, managed 46,922 thermal energy installations, and produced 44 million MWh. In 2020 the company provided 40 million people with waste collection services. Its circular economy efforts are focused on improving sorting and recovering energy from waste.
Biological Recycling
Biological recycling, also called biodegradation, utilizes microorganisms to break down plastic waste. This emerging technology holds significant promise and has seen meaningful discoveries in recent years.
Carbios SA (COOSF) has pioneered a breakthrough enzyme-based technology (peer-reviewed article in Nature) capable of fully breaking down PET plastics into their original building blocks. These building blocks can be used to produce high-quality, virgin-grade PET plastic, thus reducing the need for fossil fuel-derived materials. In 2021 The Consortium – a joint effort between Carbios, L’Oreal, Nestlé Waters, PepsiCo (PEP), and Suntory Beverage & Food Europe (STBFF) - announced production of the world’s first food-grade PET plastic bottles produced entirely from enzymatically recycled plastic.
Privately-held Novoloop (formerly known as BioCellection) developed a technology that leverages enzymes produced by bacteria to break down polyethylene films, which are widely used in packaging. By transforming these plastics into valuable chemical intermediates, the company’s process offers a sustainable solution for plastic waste that is challenging to recycle.
In 2016 a strain of bacteria was found in a Japanese recycling plant that had evolved an enzyme capable of breaking down plastic, turning it into a food source for that bacterium. A privately-held company in Connecticut, Protein Evolution, is working along these lines by using Artificial Intelligence to identify millions of unique mutations to find enzymes to recycle waste materials into useful chemicals. They aren’t alone in this pursuit, as a team in the Swiss Alps just announced the discovery of microbes that can digest plastics without the need for excess heat.
Other Efforts
Other companies, such as Dow Chemicals (DOW), are also working towards a more circular economy. The company aims to make all Dow products sold into packaging applications reusable or recyclable by 2035. Basf’s ChemCycling project is working to turn plastic waste or end-of-life tires into a secondary raw material called pyrolysis oil. In addition, the company’s IrgaCycle additive solutions help with the mechanical recycling of plastics.
Another privately-held company, TerraCycle, is working on both the challenges of sorting waste for recycling and reducing disposable packaging through its Loop efforts. Loop is a reverse supply chain that collects used packaging from consumers and retailers and returns hygienically cleaned packaging to manufacturers for refilling.
The Bottom Line
Plastic waste recycling has been financially challenging because all the steps involved, from collecting to sorting to recycling, have often resulted in a more expensive product than simply producing virgin plastic. But that is changing due to technological advances, public policies aimed at capturing the total cost of plastic, and changing social attitudes that give companies incentives to use recycling plastics. These companies are revolutionizing how plastic waste is managed, transforming it into valuable resources, and driving the transition towards a circular economy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Lenore Elle Hawkins
Lenore Elle Hawkins has, for over a decade, served as a founding partner of Calit Advisors, a boutique advisory firm specializing in mergers and acquisitions, private capital raise, and corporate finance with offices in Italy, Ireland, and California. She has previously served as the Chief Macro Strategist for Tematica Research, which primarily develops indices for Exchange Traded Products, co-authored the book Cocktail Investing, and is a regular guest on a variety of national and international investing-oriented television programs. She holds a degree in Mathematics and Economics from Claremont McKenna College, an MBA in Finance from the Anderson School at UCLA and is a member of the Mont Pelerin Society.
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