A recent Lux Research report analyses the economic forces driving growth across the four main plastic recycling technologies.
Lux Research
The future of plastic recycling, according to Lux Research
The economics of plastic waste recycling are rapidly changing, pointing to a future where both incumbent and advanced technologies will be used, but decisive advantages for certain technologies will emerge in particular regions depending on waste streams and legislation, according to a recent Lux Research report.
Titled ‘The Future of Plastic Recycling’, the report looks at four of the main plastic waste recycling processes – mechanical recycling, depolymerisation, pyrolysis, and solvent-based recycling – and analyses the factors impacting the economic viability of each.
Lux points to a near-term future where no single technology takes a commanding market lead, and where market conditions and global public policy will significantly impact each technology.
The report aims to provide recyclers, chemical and material companies, government entities, investors, and consumer-facing brands the insight they need to make critical business and public policy decisions.
Flux to the future
Charles Willard, Lux Senior Research Associate and author of the report, said: "The economics of plastic waste recycling are in continuous flux, with political and economic winds impacting the direction of the four main recycling technologies. Each technology has its own set of factors determining its growth in the short term, and we predict growth in some areas and contraction in others, but not enough to dictate a particular winning technology."
Mechanical recycling – the most common form of plastic recycling due to its cheap and simple nature – relies on inexpensive plastic feedstock and is particularly susceptible to dips in feedstock supply. China's recent ban on plastic waste has increased that supply by 45 per cent, but Lux expects global recycling capacity to increase overall, increasing competition and limiting short-term gains.
Depolymerisation – arguably one of the most effective plastic recycling techniques – can cost three times that of mechanical recycling and is heavily reliant on low or negative feedstock prices. This means that even with an increase in supply, depolymerisation will remain a niche form of recycling.
Pyrolysis is able to address mixed plastic waste streams in ways mechanical recycling cannot. Although energy intensive, it could fill gaps left by mechanical recycling. In the event that petroleum prices decrease, Lux predicts pyrolysis will alter its product distillation stream to target alternative chemical markets.
Solvent-based recycling can also address mixed streams, giving it a natural advantage over standard mechanical recycling. However, the process has contamination issues that limit growth to post-industrial waste, and its reliance on the cost of solvent makes it susceptible to other growth-inhibiting market factors.
To learn more about the economic and political fluctuations impacting the future of plastic waste recycling, download Lux's infographic here.