Over the past several years, advanced plastic recycling has been one of the most asked-about topics at Lux. This is not surprising as the plastics industry inches closer to deadlines for recycled content mandates and sustainability pledges. Advanced recycling allows for the recycling of previously unrecyclable waste streams and could potentially output virgin-like quality recyclates. However, despite a growing demand for recycled plastics and better plastic recycling technologies, developers have largely struggled to commercialize.
A recent research brief written by Lux Analyst Dr. Marcian Lee, tracks a total of 169 scale-up announcements (including pilot or demonstration plants) across the Americas, EMEA, and APAC and finds over 6 Mtonne/y announced advanced recycling capacity, with 2 Mtonne/y of this capacity not having a clear timeline or is planned for beyond 2026. This constitutes a three-fold increase in capacity over the next three years.
The technologies considered are (1) pyrolysis (heating of plastic waste in an inert environment to recover a liquid hydrocarbon product which acts as a crude or naphtha substitute), (2) solvolysis (solvolysis for depolymerizing PET via glycolysis, hydrolysis, and methanolysis, as well as solvolysis for PU, PA and PC among other plastics), (3) thermochemical depolymerization (conversion of plastic waste into a chemical-rich gas or monomers where specific chemicals (e.g. styrenes, BTX, methanol) can be recovered directly without the need for cracking or other downstream conversion processes), and (4) dissolution (solvents dissolve the target polymer, contaminants are then filtered out, and then the target polymer precipitated).
Some key highlights from the report are:
- The period between 2024 and 2025 is a key inflection point for pyrolysis where we may see 1 Mtonne/y of completed global pyrolysis capacity – a sign of the tech’s commercial maturity.
- Momentum in APAC is going strong, and we can expect a growth in the number of scale-up projects in the region. The EU may see a boost in large capacity scale-up commitments as its regulations on advanced recycling and mass balance begin to firm up.
- The current announced capacity for dissolution shows little growth, but we predict that it will grow more quickly as tech developers are beginning to identify suitable applications.
Dr. Lee concludes that the projected growth in advanced recycling capacity bodes well for technology developers in general, and the growing venture capital funding trends share this optimistic outlook. While there are still some mixed signals from regional policies on advanced recycling technologies, especially pyrolysis, overall regulatory trends are not entirely adverse; advanced recycling technology adopters will likely still be able to operate viably albeit with some limitations (fuels exempted mass balance for recycled content attribution, for example).
For more information or to set up a call with Dr. Lee or one of our other analysts, please do not hesitate to reach out to us at questions@luxresearchinc.com.