PureCycle: polypropylene recycling breakthrough?

PureCycle technology review

This technology review gives an overview of PureCycle Technologies, founded in 2015, headquartered in Ohio/Florida, USA, went public via SPAC in 2021 and currently has c150 employees. The company aims to recycle waste polypropylene into virgin-like polypropylene, preventing plastic waste, while saving 79% of the input energy and 35% of the input CO2 compared with virgin product.

Why is this challenging? Even after sorting and washing, plastic waste is still contaminated with spoiled food, chemicals, dyes and pigments, resulting in recycled product being dark and low-quality. Several other patents have sought to address these issues, but with only varying success, and via complex and/or costly methods.

Controversies have been raised by a critical report from a short-selling firm. However, our usual patent review allowed us to infer how the process is envisaged to work, including good, specific and intelligible details, covering the solvents, filtration methods, medium temperatures and medium-high pressures (data here). This de-risks some of the risks.

This note contains our observations from our PureCycle technology review, the company’s ambitions, challenges, and scores the patent library on our usual dimensions of problem specificity, solution specificity, intelligibility, focus and manufacturing readiness. We also tabulated technical data that is presented in several patents.

Further research. Our recent commentary on PureCycle technology is linked here.

Aurubis: copper recycling breakthrough?

Aurubis technology review

Aurubis Technology Review. Aurubis recycles scrap metals and concentrates into high-purity products, mostly copper products. The company is listed in Germany, has 7,200 employees and revenues of €16bn in 2021,  as it processes 1MTpa of recycled materials, plus 2.25MTpa of concentrates from 30 mining partners.

Its flagship Hamburg facility employs 2,000 people and is said to be “one of the most modern and environmentally friendly copper smelters in the world”.

Environmental credentials include two-thirds lower energy (at 2 MWH/ton) and lower carbon than (at 1.7 tons/ton) primary copper production. Improving sustainability is also a key focus for the company, per our overview.

Another target is growth. Metals recycling is growing 4% pa in Europe (from 7.3MTpa in 2019, and only 40-45% of metal waste is collected) and 5% pa in North America (5.6MTpa in 2019, only c30% is collected).

The conclusion in our Aurubis technology review is that the company does have a partial moat around its business, as it has patented several process improvements, to remove pollutants (30%), enhance product purity (25%), energy efficiency (20%) and optimize specific products/alloys (40%) in its copper processing operations.

Some of the most interesting innovations, and further observations on the patent library, are covered in our usual technology review.

Further research. Our outlook on growth in global copper demand as a result of the energy transition is linked here.

Recycling: a global overview of energy savings?

Global recycling energy savings

A global overview of recycling is laid out in numbers in this data-file, covering steel, paper, glass, plastics such as PET and HDPE and other metals, such as copper and aluminium. In each case, we cover the market size (in MTpa), the recycling rate (in %), primary energy use (MWH/ton), CO2 intensity (tons/ton) and the possible savings from recycling.

We estimate that 1GTpa of waste material is recycled globally, as 35% of these products’ total markets are sourced from scrap. As a good rule of thumb, recycling saves 5MWH of primary energy and 2 tons of CO2 per ton of material, or around 70% of the footprint of primary production, although the precise numbers vary category-by-category.

In the energy transition, we estimate global CO2 savings from recycling are already around 2GTpa. Rising energy and CO2 prices would incentivize more recycling, and save another 2GTpa of future CO2, we estimate.

Steel is the largest category, as around 30% of the 2GTpa market is sourced from scrap, or c600MTpa, avoiding c80% of the energy and c90% of the CO2 associated with primary production, and saving 1GTpa of global CO2 (models here and here). This is also the area where economic opportunity seems largest: at 6c/kWh average energy prices and a $50/ton CO2 price, these ‘savings’ can avoid half of the typical costs of primary steel production. Leading steel-recycling companies, in electric arc furnaces include Nucor, CMC and Celsa Group.

Paper is the second largest category, as more than half of the world’s 400MTpa paper market is sourced from recycled pulp. Energy, CO2 and energy/CO2 cost savings are around 30-40%, compared with virgin paper (model here). One of Europe’s largest listed paper recyclers is DS Smith, managing 6MTpa of material each year.

Aluminium offers the third largest energy and CO2 savings from recycling, out of the materials in our data-file. Despite a smaller market by mass, at c70MTpa, the energy and CO2 associated with secondary production is around 90-95% lower than primary production (model here), which also helps avoid c40% of production costs (at 6c/kWh energy, $50/ton CO2). The world’s largest aluminium recycler is Novelis, which is owned by Hindalco.

Copper recycling has mixed numbers. In absolute terms, around one-third of the world’s 28MTpa copper demand comes from secondary sources. And, secondary production saves c75% of the energy and CO2 of primary copper production, avoiding 4-5MWH/ton of energy and around 3 tons/ton of CO2 (model here). However, the value of these savings is relatively low in normal times, compared to $7-10/kg copper prices. But higher energy and CO2 prices in the 2020s may increase the relative value of secondary production. One of the world’s largest copper recyclers is Aurubis (TSE note here), while Boliden recycles copper and other metals, such as nickel (TSE note here).

The glass industry comprises over 1,200 companies, across 2,160 sites, outputting over 200MTpa of products. c20% is from recycled material. However, this is likely to be the category with the energy and CO2 savings from recycling, both in absolute and relative terms, at about 25-35% (morel here).

Global plastics only see a c10% recycling rate, which in turn is dominated by PET and HDPE. Energy and CO2 savings in these categories are estimated at 50-60% (models here and here). An array of next generation plastic recycling companies, which can handle a wider variety of feedstocks, has excited us in our research (screen here, note here).

The data-file linked below contains our numbers and workings, to derive the energy, CO2 and cost savings in each category, as a useful reference.

Further research. Our recent commentary on global recycling and energy savings is linked here.

Capacitor banks: raising power factors?

Wind and solar power factor corrections

Power factor corrections could save 0.5% of global electricity, with $20/ton CO2 abatement costs at typical facilities in normal times, and 30% pure IRRs during energy shortages. They will also be needed to integrate more new energies into power grids. This 17-page note outlines the opportunity in capacitor banks, their economics and leading companies.

Oil demand: how much can you save in a crisis?

oil demand in a crisis

Countries are encouraged to hold 90-days of emergency oil imports in inventory and have plans to reduce their oil use by 7-10% in emergency times. This has long been IEA guidance to reduce oil demand in a crisis.

Hence this data-file tabulates proposals from the IEA to quantify how these reductions (5-10Mbpd globally) could be achieved.

It is important to be realistic. Implementing all of these measures on a global basis would be extremely painful and could still only cut 10Mbpd of global oil demand at most. But a selective combination of measures would not be unsensible, and could realistically take the edge of the most extreme possible price spikes.

The largest measures are odd-even rationing (up to 6Mbpd), ride-sharing (up to 2Mbpd), free public transport (up to 2Mbpd) and slower driving mandates (up to 1.5Mbpd).

Further research. Our outlook on global oil demand during COVID pandemic is linked here. Our key points on oil demand in a crisis and how we could reduce the use of it are highlighted in our recent commentary, here.

CO2 emissions per hour of activity?

The purpose of this data-file is to tabulate our best estimates for the CO2 associated with different activities. It is not intended to be preachy, just present some data-driven conclusions…

(1) The tyranny of choice. Every activity in the data-file has some CO2 footprint, but the axes are logarithmic. Thus 1-hour of higher-carbon activity emits 100-1,000x more CO2 than a lower-carbon activity. 1-hour of flying emits as much CO2 as watching Netflix for 17-days.

(2) You can weight the numbers into an average. A weekend ‘mini break’ might average together into 8kg CO2e per person per hour, while a weekend of solid reading is 500g pp ph.

(3) The average US person has a CO2 footprint of 20 tons per year (data here), which is 2.2kg per hour (coincidentally, or not, about the same as going to play a round of golf). Hence 2kg/hour is a good yardstick for segmenting higher- and lower-carbon activities on the chart above.

(4) Food choices have a surprisingly large impact (blue bars above), from <1 kg CO2e for a lower-carbon meal per person, 4kg for a higher-carbon meal, 10kg for an hour of baking and 20kg for an hour of barbecuing. I am not saying there is anything inherently evil about brownies or ribs. Simply that you can lower your CO2 by 20-70% through dietary choices (note here).

(5) The lowest carbon activities emit 50-100g of CO2 per hour. For example, this is the full life-cycle CO2 for reading on your iPad or desktop, and even comes out 30-90% lower-carbon than reading a physical newspaper. So with that said, here is a link to our PDF research.

Electric motors: state of flux?

Motor innovations are an overlooked enabler for the electrification of transport. This 15-page note explores whether axial flux motors could come to dominate in the future. They promise 2-3x higher power densities, even versus Tesla’s world-leading PMSRMs; and 10-15x higher than clunky industrial AC induction units; while also surpassing c96% efficiencies. This extends the range of EVs and the promise of drones/aerial vehicles.

Electric motors: variable star?

Variable frequency drives precisely control motors. Amazingly they could reduce global electricity demand by c10%. We expect a sharp acceleration due to sustained energy shortages, increasingly renewable-heavy grids and excellent 20-50% IRRs. Hence this 14-page note reviews the opportunity and who benefits.

Variable frequency drives: the economics?

This data-file aims to capture the economics of variable frequency drives, which precisely adjust the operating speeds of electric motors.

We reviewed 10 case studies and found an average energy saving of 34%, and 15 past projects with an average cost around $250/kW.

Our modelling calculates a 15% IRR installing a VFD at a typical industrial motor. Sensitivity analysis shows how the returns and payback periods vary with power prices and CO2 prices.

Overall, we think economics are excellent and VFD installations will likely accelerate.

Variable frequency drives: leading companies?

This data-file outlines the top twenty companies producing variable frequency drives to precisely control electric motors. In each case, we have quantified the companies’ size, market share, percentage exposure to the theme and important notes about their positioning. The top three companies are European capital goods players. High-quality VFDs may protect against growing competition from lower-cost Chinese and Asian manufacturers.

Copyright: Thunder Said Energy, 2022.