Avangard, Honeywell to build cutting edge plastics-to-naphtha plant in Texas

US recycler Avangard Innovative is to partner with technology company Honeywell to produce an integrated sustainable plastics feedstock manufacturing unit, helping to close the loop in the loosely connected recycling supply chain.

Together the two companies will build and co-own a recycling operation that will convert end-of-life plastics back to recycled polymer feedstocks, and process 30,000 mt/year of mixed plastic waste. The facility will be built on Avangard's existing complex in Waller, Texas, and will use Honeywell technology. It is expected to begin operations in 2023.

Avangard Innovative will be the first recycler in the US to install an in-house chemical recycling operation to complement its pre-existing mechanical recycling infrastructure, differentiating the joint venture from many other chemical recycling initiatives, Avangard Innovative CEO Rick Perez told S&P Global Platts in a recent interview.

This unifies a typically very fragmented recycling process. Sorting, pretreatment, contaminant management, and pyrolysis can all done at the same facility, which increases margins and significantly cuts carbon emissions.

In comparison to mechanical recycling, which produces an end product such as post-consumer resin (PCR), advanced recycling, also referred to as chemical recycling, uses molecular conversion and pyrolysis to produce feedstocks, such as naphtha, which are then fed back into a steam cracker to make new plastics.

Ben Owens, Vice President at Honeywell Sustainable Technology Solutions, declined to comment on the expected feedstock output volume but told Platts that there will be "a significant cut that's going from plastics to plastics."

Higher costs

For many years, the industry has grappled with a significant supply-demand gap that only continues to widen as more state governments pass minimum content mandates and more brand owners pledge to increase their PCR usage. At the same time, recycling rates in the US remain stagnant amid system-wide supply constraints, such as collection cuts, miseducation, and high contamination levels.

The demand growth has led to a premium for mechanically recycled materials over virgin resins. For example, in Q4 2021, recycled food-grade PET pellets FOB LA were at an average premium of $302/mt over import prime PET resin DDP USWC, S&P Global Platts data showed.

When asked how the price of the recycled feedstock would compare, Perez said it would compete with fossil-derived naphtha. Despite the likely premium the pyrolysis-naphtha would take, Owens believes the industry and consumers have shown a willingness to pay a premium for sustainable products.

"[Honeywell] drove the creation of the sustainable aviation fuel market. That market launch showed a four to five times premium to Jet A. That's not where this market is," said Owens. "And I can tell you, that's not where this market started. We are much more competitive to a virgin plant or a naphtha to go into plastics."

Owens declined to comment further on expansion plans but said the primary goal is the commercialization of the technology.

"Any new technology that comes out will have a premium," said Owens. "But over time, there's no reason the gap can't be narrowed here as we drive up volume adoption."

A wider scope

Avangard mechanically recycles mainly post-consumer low-density and linear-low-density polyethylene film. However, Honeywell's Upcycle Technology will allow the Houston-based recycler to expand its list of accepted materials to include harder-to-recycle plastics, such as flexible, multilayered packaging and polystyrene.

"The beautiful thing about the Upcycle Technology is we can now manage 100% of the other plastics that we've been dealing with for 30 years," said Perez.

As a result, this system-- in conjunction with traditional mechanical and chemical recycling and further improvements to collection and sorting-- has the potential to increase the amount of plastic waste that can be recycled from 15% to 90%, the company said.

However, Perez said the system can only handle limited amounts of polyethylene terephthalate, the most recycled plastic, and PVC -- a hard to recycle petrochemical -- and added that those materials will be sorted out during pre-treatment and directed to their respective "homes."

"Ideally, what we're trying to do is focus on the things that cannot be mechanically recycled," said Perez. "That's really where the partnership truly makes an impact here."

All plastics processed at the new plant are to be collected within a 500-mile radius of the Waller facility to limit carbon emissions, adding that the majority of the post-consumer recyclables will be sourced from their Houston location.

"We used to never talk to technology companies, brand owners never talked to the recyclers, we never did that," concluded Perez. "And now the whole supply chain, from the consumers, brand owners, to every converter, retailer, recycler, and technology company, we're all working together to fix one thing: how do we make our world a better place for the environment."