Plastics Recycling Scams
Environmental investment funds EIFs or Green investing have billions of dollars looking for opportunities. Buyers beware!
CPC can help investors understand the risks and potential rewards. A few of the green startups we are following are:
Purecycle Technologies is having a rough time building, operating and commercializing its new process for chemically recycling polypropylene. The process was developed years ago by Procter & Gamble. The process was then further developed at a small Pilot plant. A special acquisition company (SPAC) investor bought Purecycle and packaged it for an IPO in 2021, valuing the company at $3.5 billion. They promptly set to work building a first plant in Ironton Ohio and making plans and licensing agreements to build three more plants in Korea, Europe and Georgia. After significant delays and refinancing the company was valued at ~$500 million. Since start up in 2024 its recovered some value and capitalization now stands at $1.85 billion. It’s struggling to achieve consistent operability (67% max) and nameplate capacity. Contamination in the post-consumer feedstock as well as the wide variety of polypropylene grades is making it difficult to create consistent quality end products. The SPAC investor Roth Capital has profited handsomely while Purecycle investors filed a class action suit. Government subsidies and tax abatement are an integral part of the economics.
Brightmark built a plastic pyrolysis plant in Ashley Indiana with the capacity to process 100 KT/yr (220 million lbs) of mixed plastic waste into pyrolysis oil. The plant has been plagued with operability issues and fires. Started in 2022 the plant has failed to reach a fraction of its nameplate capacity (9.7 million pounds recycled to date). A second larger plant proposed for Macon Georgia was cancelled when local governments rescinded permits and subsidies. The plans were revived in 2024 and moved to Thomaston Georgia.
Pyrolysis is a process where plastic is heated to a very high temperature in a reactor without oxygen. This converts the plastic to pyrolysis oil, which is a mixture of hydrocarbons, which can then be fed to a refinery and turned back into feedstock to make new plastics. There are many new startups using different pyrolysis technologies to chemically recycle plastics. A number of nNGOs are fighting the classification of this technology as recycling. https://www.beyondplastics.org/fact-sheets/chemical-recycling Whether pyrolysis will be accepted as a form of recycling is still dependent on governmental legislation.
Origin Materials built a plant in Sarnia Canada to turn biomass wood chips into feedstock for polyesters. After a long delay in construction the plant started last year and is operating with little fanfare. Earnings for the company and 2024 were ~35 million dollars or -$.57/share. A second plant was planned but Origin has turned their attention to making a PET tethered closure for bottles. A radical departure from making basic plastic feedstock chemicals.