Recycled Plastics Also Gain Popularity... Plastics in High Demand Due to Environmental Regulations

"Currently, if the demand for recycled plastics is 10, the supply is only about 2. Approximately 40-50% of the pyrolysis oil produced at the Ulsan ARC, which will be completed in 2025, has already been pre-sold."

The SK Geocentric booth at 'CHINAPLAS 2023,' the world's largest plastics exhibition, which opened on the 17th. Photo by Jeong Dong-hoon

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Chae Yeon-chun, Head of China Business Development at SK Geocentric, stated this on the 17th at 'CHINAPLAS 2023,' one of the world's top three plastic exhibitions. At this exhibition, global petrochemical companies focused on 'sustainability' and 'circularity' to make plastic products last longer and be reused. In particular, they were preparing for chemical recycling, moving away from simple mechanical recycling methods that weaken material properties.

SK Geocentric has set a goal to transform into an 'urban oil field company' based on recycled plastic technology. The idea is to recycle waste plastics made from petroleum and extract petroleum again. Ulsan ARC is the world's first comprehensive waste plastic recycling complex and the culmination of SK Geocentric's recycled plastic business. It can process about 250,000 tons of waste plastic annually. The plan is to develop it into a 'Mother Factory' (a domestic plant that serves as the center for research, development, and production). Na Kyung-soo, President of SK Geocentric, told reporters at the CHINAPLAS exhibition, "We plan to additionally establish waste plastic recycling plants like Ulsan ARC overseas, including in China."

Plastic recycling technology refers to the technology that collects and processes waste plastics for reuse or utilization as raw materials or fuel. Plastic recycling can be broadly divided into mechanical recycling and chemical recycling depending on the method. Mechanical recycling involves cutting and heating waste plastics to reuse them as plastics. Although the technical barrier is not high, it cannot filter out various impurities or increase the purity of the raw material, resulting in weakened material properties. The number of recycling cycles is also limited. What global companies are focusing on is chemical recycling. Through chemical decomposition, raw materials such as pyrolysis oil, polypropylene (PP), and polyethylene (PE) can be recovered. It does not weaken material properties and has high circularity, making it the most complete plastic recycling method.

SK Geocentric is exhibiting samples of pyrolysis oil produced at the Ulsan ARC, a waste plastic recycling production complex, at China Plastics 2023. Photo by Jeong Dong-hoon

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Recycled plastics are an eco-friendly business aimed at carbon reduction. The waste plastic market is expected to grow from $45.4 billion (about 60 trillion KRW) this year at an average annual rate of 7.4%, reaching $63.8 billion (about 85 trillion KRW) by 2027.

Governments around the world have also begun to support plastic recycling through policies to achieve carbon neutrality. Europe has taken the most proactive steps to create a recycled plastic market. Since 2021, it has imposed a tax of 800 euros per ton of plastic waste and aims to create a 10 million ton recycled plastic market by 2025. From 2030, it will mandate the use of 30% recycled materials in plastic packaging. Europe is providing the most active regulations and incentives. This European approach could be a catalyst for the rapid growth of the recycled plastic market.

Chemical companies at home and abroad have also been making successive investments. LG Chem has started building the country's first supercritical pyrolysis plant in Dangjin, Chungnam, with a total investment of 310 billion KRW. The plan is to produce 20,000 tons of waste plastic pyrolysis oil annually and use it as raw material for petrochemical processes. Lotte Chemical also plans to establish chemical plastic recycling facilities with a capacity of 110,000 tons by 2024 at its Ulsan Plant 2. German global chemical company BASF has been attempting commercialization based on chemical recycling through its 'ChemCycling' project since 2018.

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