An Australian developer of world-leading plastic recycling technology that could sharply lift the industry’s poor reuse rate will commission its first commercial plants in the United Kingdom and Japan later this year because policy support is lacking in Australia.
Sydney-based Licella, founded by Len Humphreys and University of New South Wales 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.
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.
Licella CEO and co-founder Len Humphreys at the company’s Somersby, NSW demonstration plant. Photo: Elfes Images (Chris Elfes)
But Licella’s first commercial plants will open in Teesside in Britain’s northeast later this year, Japan at the end of this year, South Korea around this time next year, and in Böhlen, Germany, at the end of 2024. The company 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 the UK, or the EU’s heavy tax on “virgin plastic”. Federal environment minister Tanya Plibersek said two weeks ago state ministers had agreed to toughen regulation because “voluntary targets and design guidelines aren’t working” but a circular economy advisory group won’t report back until next year.
Mr Humphreys said Europe leads the world in plastics recycling incentives while the US and Europe lead in biomass recycling into biocrude oil.
“Australia is way way behind on those fronts,” he says. “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 Technologies has enlisted big strategic partners – Mitsubishi Chemical in Japan, LG Chem in Korea, Dow, engineering firm KBR, and Canadian forestry giant CanFor – to build commercial plants offshore. Licella has raised in excess of $160 million itself and won a $12 million federal Modern Manufacturing Initiative grant for its Altona plant. Mura and CanFor’s Arbius venture will produce biocrude for aviation and heavy transport and has attracted Shell’s attention.
Mura in turn has caught the eye of 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’s 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 are needed because “without a strong incentive or disincentive to use the virgin plastic, [virgin plastic] is still cheaper”.
She argued a broader attack is needed – from product design, such as retiring hard-to-recycle PVC plastics to comprehensive post-consumer collections. The collapsed RedCycle only collected 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 has backed other advanced recycling technologies but has “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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