2024 is the year the pyrolysis bubble bursts

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Directeur principal et analyste principal

My colleague Marcian Lee recently published a research brief, Advanced recycling capacity update 2024, which continues our tracking of the scale up of advanced recycling over the last four years. There’s a lot of great data and insights in the brief, but in this article, I want to focus on one technology in particular — plastic pyrolysis. First, a few facts and figures: Lux identified a total of 728,450 tonne/y of pyrolysis capacity announced by the end of 2023. However, only roughly half (387,450 tonne/y) came online by the end of the year. Between 2024 and 2025, pyrolysis capacity is expected to more than double to 2.1 Mtonne/y; this capacity growth is driven by several greater than 100,000-tonne/y projects announced by Plastic Energy, Brightmark Energy, New Hope Energy, and Quantafuel. There’s a fly in the ointment, however: Mechanical completion does not equal actual production capacity. For example, Brightmark Energy announced that its 100,000-tonne/y Ashley plant, completed in 2020, had processed just 1,800 tonne of plastic waste by 2022; in addition, it was later revealed that the company had not been able to deliver on-spec commercial outputs for downstream offtakers. In another example, Nexus Circular has only produced a measly 1,700 tonne of pyrolysis oil after three years of starting operations. 

That’s not great! For context, there were 1.6 Mtonne of pyrolysis capacity announced in 2021. Three years later, we’ve had a few successes and a ton of failures; capacity has not developed as major projects have been delayed or cancelled. In 2020, we forecast 3.6 Mtonne of global recycling capacity in 2025; we are on track to hit probably less than half of that. The forecast has pyrolysis really taking off in the 2025 to 2030 timeframe: This was supposed to be the intense growth period, with global capacity hitting 20 Mtonne by 2030. That looks like an increasingly distant prospect. It’s also worth noting that this was not a particularly bullish forecast; I distinctly remember a number of tough conversations with chemicals industry clients on why our projections were so low.  It seems like we’re on track to underperform even that relatively conservative forecast.

So, where do we go from here? There’s a few options:

  • The death knell for pyrolysis sounds: Projects keep getting pushed back or cancelled, and capacity struggles to grow. In addition, delivery of oil is well below nameplate capacity due to feedstock issues. Further, a growing consumer sentiment that pyrolysis is just a greenwashing exercise (due to the lack of concrete progress) makes the technology even more toxic. 
  • Things turn around: Realistically, any turnaround will begin in the EU, where a generous interpretation of the European Packaging and Packaging Waste directive and swift action on new rules for mass balance could make building pyrolysis attractive. This activity is likely to be fairly geographically concentrated but could help EU companies meet new requirements for recycled content. 
  • Plastic to oil becomes more common: One of the big difficulties has been getting high-quality feedstocks for crackable oil — if you remove that constraint, the logistics and scale up become much easier. Of course, this doesn’t solve the chemicals industry issue of recycled content, but it’s a possible pathway on waste management.

What’s most likely? From where I sit, things look grim: The fact that we don’t have a really successful case study at this point makes me think it’s going to be all uphill to make pyrolysis work. So, expect it to fizzle; maybe advanced technologies can turn things around in a few years, but for now, we’re in the doldrums.

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