INTERVIEW: Chemical recycling to maintain momentum even amid economic downturn – Nexus CEO

NEW YORK (ICIS)–Chemical recycling of plastics is set to continue its momentum even as the economic outlook grows more challenging, but mechanical recycling could take a hit, said the CEO of US-based Nexus Circular.

“There’s so much demand for advanced recycled plastics, and that’s not going away. It’s a bit of ‘where there’s a will there’s a way’, and companies that need these products are becoming more creative and trying to figure out how they help the industry move forward,” said Jodie Morgan, CEO of plastics recycling company Nexus Circular, in an interview with ICIS.

The overall sharp decline in virgin as well as mechanically recycled plastics prices this year, will likely hit mechanical plastics recycling harder, she noted.

Even as virgin polyethylene (PE) and polypropylene (PP) prices are close to their 10-year average, the run-up to the peak in mid-2021 led to optimism and more investment in recycling.

“A lot of people, especially on the mechanical side, invested a lot of money into infrastructure based on those prices,” said Morgan.

“I do worry about their ability to continue to [execute] on their business models now that prices have come back to sort of that 10-year average,” she added.

Factors putting a ceiling on the price of mechanically recycled plastics include degradation as they go through rounds of recycling, and the use of plastic additives in the original product becoming contaminants in the process. Both factors limit their use, she noted.

“The additives put into it for its first life are now contaminants when you mechanically recycle the plastic,” Morgan explained.

“So what happens is, it will hit a ceiling where it does not perform as well as virgin product, and that creates a limit on how much you can use, and it also creates a limit on the price,” she added.

Chemically recycled plastics do not have the same issues, as the resulting product is identical to virgin resin and thus can be used in many applications, including food and personal care packaging.

Atlanta, Georgia-based Nexus Circular is focused on chemical (or advanced) recycling of plastics through its proprietary pyrolysis technology that uses only heat without oxygen to produce pyrolysis oil that doesn’t require post-treatment. The process only heats once, and cools once, resulting in improved energy efficiency, according to the company.

The Nexus process can recycle high density PE (HDPE), low density PE (LDPE), PP and polystyrene (PS).

“Demand is huge [because of the] pledges that have been made by petrochemical companies to support the pledges made by the CPG (consumer packaged goods) companies. Demand still far outstrips what’s available from advanced recycling,” said Morgan.

FOCUS ON EFFICIENT PROCESS WITH LOW-COST FEEDSTOCK

On the cost side, ensuring efficient production was part of Nexus’ business model from the beginning when the company was founded in 2008, she noted.

“If you’re not economic, it’s really more of a hobby than a business,” said Morgan.

Founder Jeff Gold and co-founder Eric Hartz put together a different business model focusing on waste plastic films which were not recyclable, seeking to ensure no pre-treatment of the input or post-treatment of the output would be required, she noted.

The company started with plastic films as they were abundant and either being incinerated or going to landfills.

“We don’t have anybody process it before we get the film. We bring it in directly and so you’ll see it in big spools… We just pull them off into our equipment and that allows us to keep our front-end costs very reasonable,” said Morgan.

“And they also made a decision from a technology standpoint that it had drop directly into infrastructure and assets that already exist. We don’t want anybody to have to pretreat it and we don’t want to do any post treatment. The idea was for a very efficient process that used very cost-effective feedstock, and by doing that, we could compete in the market,” she added.

The energy efficiency of Nexus’ pyrolysis process also can enable the production of sustainable virgin-quality plastics with a greater than 50% reduction in carbon emissions versus fossil-based plastics production, the CEO pointed out.

“We only heat once and we only cool once, so it is very energy efficient,” said Morgan.

Output yields are also just over 80%, she noted.

OFFTAKE DEALS AND SCALE OF PROJECTS

Nexus Circular already has offtake agreements with Shell, Chevron Phillips Chemical, Braskem and Dow, among others.

In July 2022, Nexus and Dow announced the signing of a letter of intent for Dow to secure feedstock from a new Nexus recycling project to be built in Dallas, Texas, US with input capacity of over 26,000 tonnes/year.

Also in July, Nexus signed a memorandum of understanding with Braskem to supply it with feedstock from another planned plastics recycling project near Chicago, Illinois, US with input capacity of over 30,000 tonnes/year.

The company is moving forward with the builds on its new lines, said Morgan. While the projects are progressing, no timelines are being provided.

“We’re not looking to build mega sites. We’re very focused on making sure that whatever the size of our plants will be, it will match up well with the amount of post-use plastic that’s available. We look at [availability] within a 150-mile radius and a 250-mile radius from our facilities,” said Morgan.

Nexus typically contacts around 250 different providers of feedstock in the area and brings in samples into its existing Atlanta facility for testing. It validates and qualifies the feedstock and then builds relationships with those providers.

The feedstock is primarily plastic films but can also include harder-to-mechanically recycle items such as motor oil containers and bottle caps that are a mix of PE and PP.

Since Nexus does not require the plastic waste to be preprocessed, it is relatively easier to secure feedstock.

“In the volumes that we’re talking about in our plan, we’re comfortable that the supply is available,” said Morgan.

At its Atlanta facility, Nexus is in the process of building a new line with input capacity of 25m lbs/year (11,300 tonnes/year), expected to start up in mid-2023. This will add to current input capacity at Atlanta of 8m lbs/year (3,600 tonnes/year) for a total of 33m lbs/year (15,000 tonnes/year).

CAPTION: Nexus Circular is undergoing an expansion at its Atlanta, Georgia facility where it recycles waste plastic films and other hard-to-recycle plastic waste

To date, Nexus has processed over 6m lbs (2,700 tonnes) of plastic waste. The company has been producing commercial quantities since 2018 and in 2022 moved to a 24/7 production schedule to further optimise output.

Ultimately, it is important for many plastics recycling companies to succeed as the need is great, the CEO noted.

“I want many of these companies to be successful because the post-use plastics issue is much bigger than Nexus. And I’d love to see it – a rising tide floating all ships,” said Morgan.

Interview article by Joseph Chang

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