INTERVIEW: India’s Polymer Energy sees future in chemical recycling: exec

Despite existing industry challenges, the chemical recycling market is set to grow over the medium term as regulations and technology advance, Dinesh Reddy, managing director of Polymer Energy Pvt. Ltd. and Sahasra Enviro Pvt. Ltd., said in an interview with Platts, part of S&P Global Energy.

Cost and feedstock challenges

Reddy cited a range of challenges facing the chemical recycling industry.

Most significantly, buying activity has been muted as pyrolysis oil prices far exceed crude oil prices. Refineries using pyrolysis oil are unable to pass the cost on to downstream users because the price premium for chemically recycled plastic products is insufficient.

Additionally, the lack of standardized specifications among refineries for pyrolysis oil is a major challenge.

"There is no one standard specification of the [pyrolysis] oil which they [refineries] require," Reddy said, adding that this creates confusion among producers and limits their ability to supply multiple customers with different requirements.

According to Reddy, chemical recyclers also face feedstock constraints. "In Asian countries, the government is not so ready to spend a lot of money on separation of this plastic or transporting of the plastic to the centralized chemical treatment facility," he added.

Regulation drives demand

Reddy said government regulation would be critical to the growth of the chemical recycling industry.

Geographically, Reddy has seen an increase in enquiries for pyrolysis oil from customers in Europe, where regulations mandating the use of recycled plastics are more robust.

In Asia, Reddy said the regulatory landscape is still fairly underdeveloped. "Circular polymers are very new in the market, so even the governments don't have a lot of knowledge on how to do it the right way," Reddy said, adding that governments have taken a phased approach to developing and implementing legislation.

Reddy pointed to advances in European policy and said he was optimistic about similar regulatory developments in Asia in the coming years.

He said Indian regulations on plastic waste were improving, citing the April reinforcement of a minimum recycled-content requirement for plastic packaging under the Plastic Waste Management Rules.

"Until policy is enacted, there will be no demand," Reddy added.

Technological innovation

The chemical recycling market is bolstered by technological innovation. Reddy mentioned that Polymer Energy is developing a modular system for in situ chemical recycling.

"Rather than moving plastics from the dump yard to other locations, we are moving the technology to the dump yard itself," Reddy explained. According to him, this would cut emissions and costs associated with transportation, baling, loading and unloading.

Reddy also said Polymer Energy's modular systems will use artificial intelligence to calculate material inputs and outputs.

"It knows everything ... how much plastic you are putting in, how much oil you are making," Reddy said. He said removing manual involvement from the accounting process could help improve reliability and credibility in the chemical recycling market.

Chemical recycling opportunities

"We can't survive without plastic," Reddy said, explaining that plastics demand and the resulting waste problem are expected to persist.

He said chemical recycling was the most promising solution to the waste problem, explaining that incineration technology was not viable because of its high carbon emissions. He also identified gaps in existing mechanical recycling efforts that chemical recycling could fill.

"Chemical recycling will be the future, because you cannot really mechanically recycle plastics a lot of times," Reddy said. He explained that mechanical recycling requires additional sorting processes that can be costly and sometimes impractical.

Furthermore, chemical recycling can meet demand for recycled food-grade and medical-grade plastics, given the limitations of producing high-quality mechanically recycled products, according to Reddy.