featuring Peter Fasullo, Co-Founder and CCO, and Robert Sawchuk, Co-Founder and CEO
by Kathy Hall, Executive Director, Global Petrochemicals
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10 Questions with 245 Recycle
Q&A Interview
Introduction
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Question 3
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Question 1
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Question 4
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Question 2
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Contact
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Table of content
Table of Contents
Exploring the Potential of Pyrolysis Oil in Sustainable Chemical Production
In our ongoing exploration of innovative solutions for sustainable chemical production, we dive into the world of pyrolysis oil, also known as py oil. Today, we're excited to introduce a gasified form of this remarkable material. Pyrolysis oil is a product of chemical recycling, a process that transforms plastic waste into a usable liquid material. This could be a game-changer for the chemical industry, as using pyrolysis oil in a steam cracker could produce "green" or "fossil-free" ethylene and propylene.
Unlike traditional methods that blend mechanically recycled plastic with fossil-based plastics, using fossil-free olefins ensures that the eco-certified status is maintained throughout the plastics resin supply chain. This results in plastics that are as strong and high-quality as any virgin plastic. Moreover, mass balancing can extend this fossil-free label to hundreds of downstream solvents and intermediate chemical markets. We recently had the opportunity to speak with two executives from a forward-thinking company called 245 Recycle, which is set to collaborate with Cyclyx, a division of recycling giant Agilyx. Peter Fasullo and Robert Sawchuk, founders of 245 Recycle and veterans of the NGLs and chemical industry, shared their insights with us in a comprehensive Q&A session.
Editorial Q&A Interview with OPIS
10 Questions with 245Recycle
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First, tell us more about the name of your operation. Why 245 Recycle? Second, tell us more about the exciting news regarding 245 and Cyclyx!
We founded the company with the mission to be able to recycle any plastic that is not mechanically recycled or repurposed. Today, the most suitable plastics for advanced recycling are polyethylenes and polypropylene, which most people know by the resin identification codes 2, 4 and 5. Incorporating those numbers into our name serves two purposes; the first being that we think it’s a catchy and easy to remember, and the second being that when we look back after 5 or 10 years when we can advance recycle all plastics from numbers 1 through 7, we have a sense of history and accomplishment knowing from where we came. We are excited to be a member of Cyclyx’s 10 to 90 Program which includes a diverse group of companies across the plastic value chain from producers to recyclers and those that provide logistics. Being part of the Program gives 245Recycle the opportunity to work with other members and exchange information about plastic recycling.
1.
It is both misunderstood and a valid concern. Let’s start with the most common advanced recycling technology, pyrolysis. Pyrolysis is simply the thermal decomposition of something, typically in the absence of oxygen, into something else. From a historical perspective, pyrolysis has been used to turn wood into coal, and ancient Egyptians used liquids from cedar pyrolysis as an embalming fluid. At 245Recycle, we take numbers 2,4 and 5 plastics and thermally decompose them in the absence of oxygen to produce a feedstock that can be remade into new 2, 4 and 5 plastics. There are a handful of other technologies, also known as advanced recycling, most notably gasification or incineration. Gasification or incineration is the process of combusting waste that includes plastics to generate energy. Although it accomplishes the goal of eliminating plastic waste, it does not meet the true meaning of circularity, whereby waste plastics are converted into materials or feedstocks to make new virgin plastics to be used again and again.
Going back to pyrolysis, the concern is that the process isn’t delivering what it promised. Even though the technology is not new, the process of pyrolyzing wastes plastics is complicated and expensive. If you listen to some of the critics, it may be that they are backing down from their lofty circularity goals due to the complexity and expense of advanced recycling. The bottom line here is that 245Recycle plans to employ a proven technology, pyrolysis, to convert post-consumer waste to new products, which prevents that waste from ending up in a landfill or in the environment. That is why we are here.
Chemical recycling, or advanced recycling, is a controversial subject in some circles, mostly centered upon the issue of incineration. Do you think this is misunderstood or is it a valid concern?
This section provides a comprehensive understanding of OPIS's journey and its current operations, offering valuable insights into the company's ethos and strategies.
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Let's focus on what you mean by "hard to recycle" plastics -- you primarily mean plastic film, yes? Why is film harder to recycle and is there a solution in the works?
3.
There is no formal definition for hard-to-recycle plastics, but the term generally refers to plastics that cannot go in curbside recycling bins because they are challenging to sort and mechanically recycle. The easy-to-recycle plastics are those that can be mechanically recycled, such as those with resin code 1, which we find in plastic water bottles, and sometimes with resin code 2, which can be cleaned, ground and extruded to make plastic wood for benches and decks, among other things. We all know one of the hard-to-recycle plastics is films, which is why we have separate grocery and dry cleaner bag collection points at most grocery stores. However, other hard-to-recycle plastics include common items such as bread tags, prescription bill bottles and loose plastic bottle caps, as well as plastics with the resin code 7, which include a wide variety of lesser-used but commonly known plastics like epoxies and acrylics.
It takes a combination of solutions to solve the hard-to-recycle problem, starting with collection, then sorting and cleaning, and finally advanced recycling. 245Recycle has been talking to companies that employ sophisticated sorting technology using artificial intelligence to identify and select plastics suitable for advanced recycling from thousands of different materials. We are firm believers that technology is the backbone for delivering our mission; whether in the front-end of the process for collecting, sorting and cleaning, or in the back-end for advanced recycling. You may have seen that 245Recycle announced it has chosen Lummus Green Circle as its technology partner for pyrolysis. We expect to make an announcement in the future about our artificial intelligence partner for the difficult process of sortation. Stay tuned.
Every process is a little different; however, they are all fundamentally similar because they start with solid plastic molecules that are broken down by a combination of heat and time in a very controlled manner to make what is known as pyrolysis oil or pyoil. Pyrolysis oil may contain short-chain hydrocarbons that have the properties of natural gasoline or light naphtha to long-chain hydrocarbons, which are like those found in diesel fuel or gas oils typically produced at a refinery. Different technologies use techniques to separate the pyrolysis oil products to make different quality products. At 245Recycle, we have over 100 years of Founders' experience in refined products, natural gas liquids and petrochemical feedstock selection. We are using this combined experience to optimize the output of our process and to create the feedstock petrochemical companies prefer. Ultimately, this helps our customers optimize the output from their crackers so that they produce the best mix of products, including polyethylene and polypropylene, from their plants. Unlike batch pyrolysis processes, which produce a solid residue called char, the Lummus Green Circle process produces a heavy pitch, which is useable as an asphalt substitute or replacement. As a result, over 90% of the plastic waste to goes into our pyrolysis process comes out as a precursor for circular plastics production or for use as an asphalt replacement. The remaining material is recovered in our fuel system.
Can you pull the lens back for us talk about product yields? Our understanding is that once the trash plastic is properly sorted and processed into pyroysis oil, there are different qualities of it and they have different yields of ethylene (and ultimately polyethylene). From a mass balancing perspective, what does that look like?
4.
Unlike batch pyrolysis processes which produce a solid residue called char, which is a solid residue, the Lummus Green Circle process produces a heavy pitch which is useable as asphalt substitute or replacement. As a result, over 90% of the plastic waste to goes into our pyrolysis process comes out as a precursor for circular plastics production or for use as an asphalt replacement. The remaining material is recovered in our fuel system.
At 245Recycle, we have over 100-years of Founders-experience in refined products, natural gas liquids and petrochemical feedstock selection. We are using this combined experience to optimize the output of our process and to create the feedstock petrochemical companies like. In the end, this helps our customers optimize the output from their crackers so that they produce the best mix of products, including polyethylene and polypropylene, from their plants.
Every process is a little different however they are all fundamentally similar because they start with solid plastic molecules that are broken down by a combination of heat and time in a very controlled manner to make what is known as pyrolysis oil or pyoil. Pyrolysis oil may contain short chain hydrocarbons that have the properties of natural gasoline or light naphtha, to long chain hydrocarbons which are like those found in diesel fuel or gas oils typically produced at a refinery. Different technologies use techniques to separate the pyrolysis oil products to make different quality products.
Tell us more about the gasified version of py oil that contains a certain amount of ethane and even olefins in it. It would be natural to call it "py gas" but the industry has long been calling pyrolysis gasoline pygas. Is is fair to say that py gas is closer to py "natural gas" and what are you calling this material?
Up until a few years ago, pygas meant the heavier aromatic cut produced from mostly flexible feed crackers. It trades in the market based on its component value of aromatics, C5 diolefin and a molecule called DCPD. This pygas is not a good cracker feedstock and it is not a good ethylene producer. You are correct that the pyrolysis process produces a gas along with the pyrolysis oil, sometimes as much at 30% of the total yield. The gas composition is very different than what the market calls pygas, containing mostly molecules that are one to three carbons long. Since this material looks more like the gas produced at a refinery FCC than pygas from a petrochemical unit, we have been calling it off-gas, although sometimes we use the terminology pygas as well.
5.
There are price reporting agencies or PRAs and consultants claiming that they are reporting prices for different grades of post-consumer and post-industrial plastics. The reality is that the market is in its infancy and a lot of the transactions we know are freely negotiated based on the prevailing market conditions, quality, supply and demand, and other factors. We are fully supportive of a major PRA stepping into the market as a reputable and transparent reporter of commodity waste plastic and pyrolysis products. We want our suppliers to be confident that the price reflects the market, and we want our customers to be confident that the price they are paying for our pyrolysis products is consistent with what it costs to source waste plastic.
We recognize that this is not an insignificant task. Plastic is not a fungible product meaning that one plastic cannot be interchanged with any other plastic. It is similar to crude oil in that pricing can be based on a set price, such as WTI or Brent, with differentials based on quality. The difference here is that the quality differentials are a little unknown. Sure, we can apply a factor for colors or metal content, but how do you apply a factor for the amount of co-monomer or cross-linking? Pricing of pyrolysis oil may be easier because the composition if often similar to traded products like ULSD or gasoil. Just because it isn’t easy doesn’t mean that there isn’t a market demand for a standard for waste plastic commodity pricing.
6.
Apart from the complexities of the product spec, yield and other associated issues, the question foremost on our minds at OPIS is how the commodity is priced?
What is the biggest investment gap at this point in this market's development? If it's infrastructure, what level are we talking -- MRFs, transportation, processing?
7.
When it comes to closing the investment gap, it all starts with supply meaning everything from collection programs to investments in logistics and sorting facilities beyond MRFs. Supply is one leg of a three-legged stool. However, we must consider that pyrolysis investments are expensive and take years to complete, which adds risk to the investment. Finally, the investment community has expressed concerns about some of the claims made by those in the industry and press. The advanced plastic recycling industry is at an early stage of its evolution and investors have expressed skittishness about making a large investment in a plant with serial number one.
Having said this, 245Recycle has taken steps to de-risk its investment. We have a detailed analysis, basically a mass balance, of US waste production, material and plastic recovery facilities, and landfills to fully understand the waste plastic value stream. We have worked closely with technology providers, suppliers, both raw material and supply logistics suppliers, and, of course, our customers so that we have reasonable expectations and deliverables once we make our final investment decision and move into the engineering and construction phase of the project. There is always risk in any project, where we are first-movers or moving into a well-established market. The 245Recycle team is dedicated to addressing the risks in a thoughtful and experienced way in pursuit of our Mission.
We all know the real estate adage, “location, location, location.” It cannot be truer for advanced recycling projects. On one hand, locating close to supply makes sense, which means being close to major metropolitan areas. On the other hand, being close to your customers, essentially the petrochemical industry makes sense to take advantage of logistics synergies and their ability to take not only our pyrolysis liquid fractions but also our pyrolysis gas stream. Outside of Texas, it’s not possible to be close to both. But in Texas, we can be close to supply and our customers. That is why in February, 245Recycle announced plans to build a 400-ton-per-day advanced recycling plant on the Texas Gulf Coast. Our strategy is to take advantage of our membership in the Cyclyx 10 to 90 Program and our extensive knowledge of waste plastics logistics to move the post-consumer waste plastics to our plant located close to the petrochemical industry. Our research indicates that there are enough plastics with resin codes 2, 4 and 5 going into Texas landfills in the major metropolitan areas to support the investment in several pyrolysis plants of the size that 245Recycle plans to build on the Texas Gulf Coast.
Let'’s talk about investment locations -– most of the petrochemical complexes in the US are in the Gulf Coast. Plastic trash is everywhere in the US. Chemical recycling facilities have been built in the Midwest, the Southeast and also in Texas. How is that location gap bridged, coupled with the investment needed to develop the use of renewable feedstocks by petrochemical companies?
8.
Some of this story sounds reminiscent of how the NGLs industry itself developed in the US decades ago. What similarities or "universal truths" do you see between the renewable feedstock movement and NGLs as far as petrochemical use?
Well, there are similarities in the development of the NGL market and advanced plastic recycling. Forty to fifty years ago, US natural gas processors had to decide whether to spend more capital to install cryogenic gas processing plants to maximize the recovery of ethane from natural gas streams. Since ethane could be retained in the natural gas stream, gas processors had to be assured there would be a sustainable and economic market for the ethane if they would spend the money to maximize its recovery. Since the only marketable use for ethane is the production of ethylene, that meant gas processors had to have confidence in the petrochemical industry to build ethylene plants that could crack ethane as their primary feedstock. Inversely, the petrochemical industry had to have confidence in the long-term availability of natural gas that was rich in ethane in order to build ethane-based ethylene plants.
Also, forty to fifty years ago, the natural gas processing industry was populated more by small independent midstream companies, not the behemoth, fully integrated midstream companies you see today. In many cases back then, it was the petrochemical companies that built the ethane pipelines to bring the ethane from the “field” to their petrochemical facilities because most small independent gas processors did not have the economies of scale to justify building NGL pipelines. It wasn’t until the development of the shale plays 15 years ago that both the midstream and petrochemical companies realized they could both make substantial investments on the both the sides of the ethane value chain to take advantages of a deep resource.
Today, we know there is large amount of waste plastics being landfilled, but more cooperation among the stakeholders is going be needed to complete the plastic recycling value chain. Independent companies like 245Recycle are willing to put in the hard work to develop advance recycling plants, but is going take the petrochemical companies, who need to meet their circularity goals, to help push the process forward so investment capital can be deployed to build the advance recycling plants and construct the secondary sorting facilities to recover the hard-to-recycle plastics. Forty to fifty years ago, the NGL market required the petrochemical industry to invest, today it’s the advanced recycling industry that is once again looking to the petrochemical industry to invest. We know how the story turned out the first time and are encouraged to see history repeat.
9.
You've said in some of previous conversations: "If it was easy, we wouldn't be doing it." What would be the ideal industry landscape for 245 Recycle in the next 5 to 10 years?
Our first goal is to build our 400 ton per day advanced recycling plant on the Texas Gulf Coast so that it can propel us to a leader in advanced recycling. As our company grows and we expand the number of sites and our recycling capacity, we want to do so utilizing the best advanced recycling technology and be recognized as thought leaders in this area. We want a dedicated team of employees that are extremely competent and that are capable of executing projects with a strong commitment to safety, mission, and action. Ten years from today, we as Founders of 245Recycle, want to look back at our name, 245Recycle, and say, “We’ve gone beyond recycling 2, 4 and 5 plastics, we can advance recycle all plastics that cannot be repurposed.” When we accomplish this with no safety or environmental issues, we can say, “Mission Accomplished.”
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