Companies are being encouraged/forced to produce climate plans by ever more focused shareholders many of whom only have a passing understanding of how some of the companies operate and how they might best set a course to lower emissions and otherwise be better stewards of the environment. The pretty graphic by Covestro below likely looks much better than the data and ambition behind it really are. This is not necessarily meant as a criticism of Covestro, but the company like many others is being challenged to explain a very complex, process, and engineering-heavy set of options to an audience not really qualified to understand them – pictures with circles are easier.
Source: Covestro, September 2021
In the analysis, we presented in our Sunday Thematic and Weekly Recap - If you think tight natural gas markets are worrying – just wait! – we only showed recycling rates reaching 20% of demand by 2030. But when you are measuring polymer supply, you can only include the polymer that is mechanically recycled back into traditional polymer markets – you cannot include polymers that are recycled into new markets, such as roadbed modification, or polymers that are chemically recycled back into feedstocks. Behind the analysis was a much higher percentage of plastic waste that was no longer flowing into landfills or the oceans. The issue with mechanical recycling programs is similar to the issues with both renewable-based plastics and biodegradable plastics – the projects are small. The scale-up opportunities that Gevo. Danimer and Origin talk about are all to scales that barely register in the grand scheme of plastic demand – almost guaranteeing them a market for any first facility that can make on-spec products at a reasonable cost. In the analysis, on Sunday we assumed that all were successful, but combined they made very little difference to the landscape before 2030. Scaling these businesses is going to be key and while they may be successful and profitable, it could be 10-15 years before they become a meaningful risk to conventional polymer demand.
