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, depolymerization, pyrolysis, and solvent-based recycling – and analyzes the factors impacting the economic viability of each.
Lux points to a near-term future where no one 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.
"The economics of plastic waste recycling are in continuous flux, with political and economic winds impacting the direction of the four main recycling technologies," said Charles Willard, Lux Senior Research Associate and author of the report. "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."
The four types of recycling technologies studied are as follows:
• Mechanical recycling – The most common form of plastic recycling due to its cheap and simple nature. However, due to its reliance on inexpensive plastic feedstock, mechanical recycling is particularly susceptible to dips in feedstock supply. China's recent ban on plastic waste has increased that supply by 45%; however, Lux expects global recycling capacity to increase overall, increasing competition and limiting short-term gains.
• Depolymerization – Arguably one of the most effective plastic recycling techniques with its ability to convert polyethylene terephthalate into virgin-quality monomer precursors, the process is three times the cost of mechanical recycling and heavily reliant on low or negative feedstock prices. This likely means that even with an increase in supply, depolymerization will remain a niche form of recycling.
• Pyrolysis – Able to address mixed plastic waste streams in ways mechanical recycling cannot, pyrolysis, though energy intensive, could fill the gap in this area 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, partially insulating it from major market fluctuations.
• Solvent-based recycling – Like pyrolysis, solvent-based recycling can address mixed plastic waste streams, giving it a natural advantage over standard mechanical recycling. However, the process has had contamination issues, limiting its growth to postindustrial waste, and its reliance on the cost of solvent makes it susceptible to market factors that could inhibit growth.
To learn more about the economic and political fluctuations impacting the future of plastic waste recycling, download Lux's infographic here.
About Lux Research Lux Research is a leading provider of tech-enabled research and advisory services, helping clients drive growth through technology innovation. A pioneer in the research industry, Lux uniquely combines technical expertise and business insights with a proprietary intelligence platform, using advanced analytics and data science to surface true leading indicators. With quality data derived from primary research, fact-based analysis, and opinions that challenge traditional thinking, Lux empowers clients to make more informed decisions today to ensure future success. For more information, visit www.luxresearchinc.com,
