An Australian developer of world-leading plastic recycling technology that could sharply lift the industry’s poor reuse rate will see the commissioning of the first commercial plants to use the technology in Britain and Japan later this year because policy support is lacking in Australia.
Sydney-based Licella, founded by Len Humphreys and University of Sydney inventor Thomas Maschmeyer, is poised to reveal partners for a proposed plant on the Dow Chemical site at Altona, in Melbourne’s west, in coming weeks.
Licella CEO and co-founder Len Humphreys at the company’s demonstration plant in Somersby, on the NSW Central Coast.  Chris Elfes
Packaging giant Amcor has committed to invest alongside Licella in the Altona plant, which will cost about $80 million for its initial 20,000 tonnes-a-year capacity, and more than $200 million when its target of exceeding 100,000 tonnes is reached.
But the first commercial plants to use Licella’s technology will open in Teesside in Britain’s north-east later this year, Japan at the end of this year and South Korea around this time next year. Another commercial plant is being built on a Dow site in Böhlen, Germany, and the company also has a demonstration plant at Somersby, on the NSW Central Coast.
Its CAT-HTR (catalytic hydrothermal reactor) technology uses pressurised hot water to break down long chain polymers into smaller bits and add hydrogen, producing a high-quality biocrude with 80 per cent to 90 per cent less carbon than oil and high energy intensity. This can be recycled into plastics or refined conventionally with the aim of increasing Australia and the world’s dismal 10 per cent to 12 per cent mechanical recycling rates.
“The strange thing is, you know, this is Australian technology that we developed here, but the first commercial plant’s in the UK,” Mr Humphreys told The Australian Financial Review.
The “valley of death” between R&D and commercialisation is a familiar tale; the first commercial pilot for Calix’s cement carbon capture technology is being developed in Belgium thanks to the European Union’s carbon tax.
The sticking point is the lack of policy carrots and sticks such as the recycling credit offered in Britain, or the EU’s heavy tax on “virgin plastic”. Federal Environment Minister Tanya Plibersek said two weeks ago that state ministers had agreed to toughen regulation because “voluntary targets and design guidelines aren’t working” but a circular economy advisory group will not report back until next year.
Mr Humphreys said Europe led the world in plastics recycling incentives, while the US and Europe led in biomass recycling into biocrude oil.
“Australia is way, way behind on those fronts,” he said. “Virtually all the soft flexible plastics on the market go to landfill.” Soft flexible plastics include milk containers, soft drink bottles and plastic bags.
Licella’s 30 per cent-owned affiliate Mura – which owns the licence to exploit CAT-HTR technology for plastics recycling outside of Australia and New Zealand – has enlisted big strategic partners (Mitsubishi Chemical in Japan, LG Chem in Korea, Dow and engineering firm KBR) to build commercial plants offshore.
Licella has raised more than $160 million and won a $12 million federal Modern Manufacturing Initiative grant for its Altona plant. It has also joined with Canadian forestry giant Canfor produce biocrude for aviation and heavy transport, in a venture dubbed Arbios Biotech that has attracted Shell’s attention.
Mura in turn has caught the eye of investor Victoire Carous, who is scouring the world for opportunities for a $US100 million ($150 million) plastics recycling fund for Swiss fund manager Lombard Odier.
It has been a long haul, but Mr Humphreys said the pace of change “has been incredibly ramped up in the last 24 months”.
Licella’s marketing director, Andrea Polson, said financial incentives for recycling were needed because “without a strong incentive or disincentive to use the virgin plastic, [virgin plastic] is still cheaper”.
She argued a broader attack was needed – from product design, such as retiring hard-to-recycle PVC plastics, to comprehensive post-consumer collections. The collapsed RedCycle collected only 7000 tonnes of soft plastics a year (Cleanaway is looking at picking up where RedCycle left off) or less than 1 per cent of the total sold.
Karen Dobson, head of Dow Australia and New Zealand, said the chemicals giant had backed other advanced recycling technologies but had “more extensive partnerships and capacity commitments with Mura than anyone else”.
“We do believe that Licella’s technology is unique,” she said. Dow aims to build its partnerships with Mura and Licella to 600,000 tonnes a year – including a US plant – by 2030.
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