Making recycling happen: economic and policy aspects

of plastic circularity
Macarena Larrain
Topics
▪ Plastic packaging value chain
▪ Economic analysis of recycling technologies: techno-economic
assessment
▪ Policies and regulations applied to plastic packaging
▪ Ex-ante evaluation of policy instruments
Plastic packaging value chain

Source: Europen
3
 ¿How much profit will I get from a process/technology?
In simple terms….

Profits = Revenues Costs

Investment or Operational costs

Sales of products capital = OPEX
expenditure
(CAPEX)

4
Techno-economic assessment / analysis
Technological assessment integrated with an economic assessment.

Mass and Market study Economic Sensitivity

Energy Assessment analysis
Balance
•Process flow •Product •Profits per •Variables with a
diagram prices ton of higher influence
plastic on the results
waste
recycled

5
Case study: increasing recycled plastic in Flanders
Mechanical recycling
PP rigids

PS rigids

PE films
TEA

MPO

Othe
r Thermochemical recycling
 Process flow for mechanical recycling: PP rigids
Water Electricity

Plastic Float Centrifugal Thermal Wind

Shredding Washing Milling Milling Extrusion Regranulates
waste sink drying Drying Sifting

Water
Consumables treatment

Discarded
Solid Sink fraction
residue fraction Evaporation Dust
(films/rigid)
7
 Process flow for mechanical recycling: PS rigids
Water Electricity Low contamination: No float sink

Plastic Float Centrifugal Thermal Wind

Shredding Washing Milling Milling Extrusion Regrinds
Regranulates
waste sink drying Drying Sifting

Water
Consumables treatment

Discarded
Solid Sink fraction
residue fraction Evaporation Dust
(films/rigid)
8
 Process flow for mechanical recycling: PE films
Water Electricity Films don’t need second milling
step

Plastic Float Centrifugal Thermal Wind

Shredding Washing Milling Milling Extrusion Regrinds
Regranulates
waste sink drying Drying Sifting

Water
Consumables treatment

Discarded
Solid Sink fraction
residue fraction Evaporation Dust
(films/rigid)
9
 Process flow for mechanical recycling: MPO rigids
Water Electricity The product is regrind

Plastic Float Centrifugal Thermal Wind

Shredding Washing Milling Milling Extrusion Regrinds
Regranulates
waste ink drying Drying Sifting

Water
Consumables treatment

Discarded
Solid Sink fraction
residue fraction Evaporation Dust
(films/rigid)
10
 Process flow for thermochemical recycling: PP rigids and PE
films.
Flue
Gas

Air Energy Energy

generation

Calcium
hydroxide Off
Gas
Naphtha
Plastic
Cracking and
waste Shredding Densification Distillation Hydrogenation
condensation
Wax

Water Water
residue and solid
Energy residue Hydrogen
11
 Process flow for thermochemical recycling: PS rigids
Flue
Gas

Air Energy Energy

generation

Calcium
hydroxide Off
Gas
Styrene
Plastic
Cracking and
waste Shredding Densification Distillation
condensation
Other
products

Water Water
residue and solid
Energy residue

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 Process flow thermochemical recycling: MPO and Other films
High contamination in plastic waste
Flue
input: pretreatment required Gas

Water Air Energy

Energy
generation

Calcium
hydroxide Off
Gas
Naphtha
Plastic Cracking and
Shredding Washing Milling Float sink Densification Distillation Hydrogenation
waste condensation

Wax

Water
Consumables treatment

Sink Water
Solid Water
fraction and solid
residue residue Energy Hydrogen
residue 13
 Energy consumption and feedstock product ratio
Mechanical recycling Thermochemical recycling
kg product/ton
feedstock
873 870 796 604 811 801 802 541 154
PP rigids PS rigids PE films MPO rigids PP rigids PS rigids PE films MPO rigids Other films
2500
2000
1500
1000
500
0
-500
-1000
-1500
Shredding Washing Milling Float-sink
Mechanical drying Thermal drying Wind sift Regranulation
Densification Cracking & Condensation Distillation Hydrogenation
Engine Water treatment Conveying 14
Revenues: market study
Source: Databases,
Highly correlated
industry information,
with oil prices!
etc…. Price (EUR 2019 / ton)

PEPP regrind Oil price estimations

PE regranulates 2000

EUR/ ton of oil

PS regranulates 1500

PP regranulates 1000

Styrene 500

Slack wax 0
2020 2023 2026 2029 2032 2035
Naphtha

0 200 400 600 800 1000 1200

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OPEX and CAPEX for mechanical recycling (MR) and chemical
recycling (CR)

16
 ¿How much profit will I get from a process/technology?
In simple terms….

Profits = Revenues Costs

Investment or Operational costs

Sales of products capital = OPEX
expenditure
(CAPEX)

17
Discount rate
▪ Time value of money.
▪ Rate of return expected by the investors.
▪ Answers the question: If I borrow from you 100 this year you expect 10x
by next year.

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Net Present Value

Present value profit Profits

year 4

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

𝑷𝒓𝒐𝒇𝒊𝒕𝒔 𝒀𝒆𝒂𝒓 𝟒
𝑷𝒓𝒆𝒔𝒆𝒏𝒕 𝑽𝒂𝒍𝒖𝒆𝟒 =
(𝟏 + 𝒅𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝒓𝒂𝒕𝒆)𝟒

𝑬𝒗𝒂𝒍𝒖𝒂𝒕𝒊𝒐𝒏 𝒕𝒊𝒎𝒆

𝑵𝒆𝒕 𝑷𝒓𝒆𝒔𝒆𝒏𝒕 𝑽𝒂𝒍𝒖𝒆 = ෍ 𝑷𝒓𝒆𝒔𝒆𝒏𝒕 𝑽𝒂𝒍𝒖𝒆𝒊

𝒊=𝟎 19
Profits (NPV) per ton of plastic recycled
60 No technology outperforms the other. Results depend on the plastic type!

40
PP rigids has high value product when mechanically recycled.
20

0 PS rigids has low OPEX and CAPEX for thermochemical recycling, therefore
high value products.
PP rigids PS rigids PE films MPO
-20 rigids
PE regranulates have vary low price → thermochemical recycling is a
-40 better option for this fraction.

Mechanical recycling MPO rigids has high level of contaminations, therefore the process has a
Thermochemical Recycling higher cost and a lower feedstock to product ratio.

Larrain, M. et al. Economic performance of pyrolysis of mixed plastic waste: Open-loop versus closed-loop recycling. J. Clean. Prod.
270, 122442 (2020).

Larrain, M. et al. Techno-economic assessment of mechanical recycling of challenging post-consumer plastic packaging waste. Resour.
20
Conserv. Recycl. 170, 105607 (2021).
Directives regarding packaging waste
▪ EU Landfill Directive (1993/31): regulates landfilling
▪ EU Packaging and Waste Packaging directive (94/62): sets target for recovery and recycling
▪ EU Waste Framework Directive (2008/98): lays down some basic waste management principles
▪ EU REACH regulation (2006/1907): enforces manufacturers must report and show safety information on
chemicals.
▪ EU Plastic Bags Directive (EU) (2015/720): forbids the free provision of plastic bags.
▪ EU action plan for the circular economy (2015/614): maps 54 actions for the transition to circular economy and
proposes amendments to previous directives.
▪ EU Single Use Plastic Directive (2019/904): product bans, recycled content for PET bottles, separate collection
targets, mandates EOR obligations, etc.
▪ New circular economy action plan (2020/98):maps 35 action related to sustaining green claims made by
companies and reviewing requirement on packaging and packaging waste.
▪ Global Plastic Treaty (2022….): roadmap for a global plastic treaty that would address plastic production and
design,

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Extended producer responsibility schemes

This system ensures that

Packaging
producer Consumer producers of products bear
financial responsibility or
financial and organizational
responsibility for the
Disposal management of the waste
stage of a product’s life
cycle (European Council,
2008).
Producer
Recycler responsibility
organization FostPlus in Flanders
Eco Embres in Spain

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Case study: EPR scheme including chemical recycling

Partial equilibrium model

Policy instruments
▪ Extended product responsibility (EPR) only
▪ Economic interventions: Seek to internalize the environmental externalities by means of market-oriented policies
similar to the price mechanism observed in a free market (Wiesmeth, 2021b)
▪ Green dot fee bonus MR: Producers receive a discount on the green-dot fee proportional to the recycled
content.
▪ Green dot fee bonus: Producers receive a discount on the green-dot fee proportional to the recycled content.
▪ Packaging tax to producers: Producers must pay 450 EUR for each ton of non-recycled packaging.
▪ Naphtha tax to plastic producers: Producers must pay 200 EUR for each ton of non-recycled naphtha.
▪ Direct interventions: policy-makers set targets or standards to be achieved. The compliance of the standards is then
monitored and controlled by the authorities who enforce them with appropriate measures (Wiesmeth, 2021b)
▪ Increased collection target: PRO are enforced to collect 95% of the packaging waste.
▪ Recycled content target MR: Products must contain a minimum fraction of recycled plastic.
▪ Recycled content target: Products must contain a minimum fraction of recycled plastic or plastic made with
recycled naphtha.

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 Plastics recycled in each policy scenario
0% 20% 40% 60% 80% 100% 120%

Reference scenario (EPR only)

Naphtha tax Packaging tax increases mechanical recycling

but not overall recycling rates.
Packaging tax
Increased collection target increases overall
Increased collection target recycling rates.
Green dot fee bonus MR
Green dot fee bonus on recycled plastics
Green dot fee bonus slightly increases mechanical recycling.

Recycled content standard MR Recycled content standard increase mechanical

recycling but not overall recycling rates
Recycled content standard

Mechanical recycling Thermochemical recycling Incineration or disposal

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 Thanks!
Macarena Larrain
macarena.larrain@uantwerpen.be

Acknowledgment:
Prof Pieter Billen
Prof Steven Van Passel

ICON catalisti project MATTER

ICON catalisti project P2PC