Decarbonization and circularity – why they must go hand-in-hand

Welcome to Plastics Unwrapped. In this podcast series, you'll hear the experts investigating the innovations as well as the challenges the plastics industry faces. It is hosted by Judy Hicks and brought to you by Dow. Today we're going to talk about decarbonisation and circularity.

two important pillars of a sustainable future for plastics and the material science industry as a whole. In this episode, we're going to explore how these two concepts go hand in hand and how we can ensure both of them at the same time. Can our technologies ensure we're incentivizing decarbonization and the circular economy? And how are they connected? I'm delighted to be joined today by Mark van der Bigelow from Dow, who's been instrumental in bringing advanced recycling or chemical recycling.

We're also very pleased to be joined by Oliver Boric from Mura. a world leader in advanced recycling technology, and Virginia Janssens, the Managing Director for Plastics Europe, Plastics Association based in Brussels. Thank you very much for joining me today and welcome. Hello, and thanks for having me. Yes, Judy, thank you very much for having me on this podcast. Nice to be here, Judy. So let's dive straight in, everybody.

Both decarbonisation and circularity are very high on the public and policy agendas, especially in Europe. The EU Green Deal is pursuing a more holistic sustainability approach that emphasises a full effective circular economy in which we recycle.

and reuse and reduce, especially plastics. So Oliver, could you tell us how Muro's advanced recycling technology works? It's been described as revolutionary, but what makes it different than more conventional recycling solutions? Yes, Mura does differ from conventional technologies in this space. As you might be aware that the majority of the companies in the chemical recycling space use pyrolysis as the basis of their technology.

Mura uses water. So essentially, if you like, we boil the plastics at very high temperatures and pressures, and that allows us to achieve the same outcome, but much more efficiently than others.

And this also allows us to pursue a different business model, which means we can scale out the technology and build it out much faster than others. And with that in mind, we hope to address some of the concerns concerns that people have out there in terms of whether this particular, I guess, industry or technology can manage to make a difference over the coming years in bringing about higher rates of recycling.

So just on that note, Oliver, you say it boils the plastics and basically that... could sound alarming to some people, especially with our focus on lowering CO2 emissions, etc. So what would you say about, you know, are you also working towards decarbonisation goals as well? Absolutely. So as is the case, unfortunately, in nature, you cannot change any material or anything into another state without applying energy. So yes, we do apply energy and use energy. However, the end result on

net basis is an energy saver. So if we take waste plastics and we apply energy in our form to it to convert the plastics into an oil that we can use again, We save a lot of energy in that we don't have to take fossil equivalents out of the ground and also prepare them for the same process that, for instance, Dow uses to make plastics. So we avoid a lot of steps and we...

apply a little bit of energy, but on a net basis, we save energy. Mark, can you tell us about Dow's partnership with Mura? Why is it so important and what does it mean for the future of Dow's recycling efforts? Sure, I can, Judy. So important for us is that we are moving into the space of circular economy and recycling. But I think key is with all the initiatives ongoing right now that we are able to reach scale. And that's that collaboration.

with MURA about. It's about getting to scale with chemical recycling. So with MURA together we're building one of the first and one of the largest recycling units in the world. Virginia are you seeing similar partnerships across the industry? Yes, we are. So collaboration and partnerships are indeed vital in a circular economy because we're all interlinked and connected with one another. And it's really, we see that at the company level, of course, with Mura and Dow is one beautiful example.

And even also beyond if we think of partnerships, also in a public private partnerships with government. governments moving forward to really accelerate on that joint journey that we talk about today on circularity and decarbonization. At Plastics Europe, we see weekly updates of new partnerships, joint ventures, scale-ups, collaborations.

And even, as we all know, in the current energy crisis that we are facing, that we still are, the members at least from Plastics Europe, still have that long-term perspective in mind, showing the investment plans, et cetera. in Europe on circularity decarbonization. So that is really...

hopeful news for us in meeting those EU targets on circularity and decarbonization and net zero, if you like. And concretely, we need those partnerships. As I mentioned, it's really a demonstration of the circular economy. And that is the only... way forward to really advance and increase the use of chemical mechanical recycling hybrid plants that Dow also is investing in also gives the proof points for the complementarity between mechanical and chemical recycling, for instance.

Partnerships will also enable more alternative feedstocks, moving away from fossil-based as a feedstock to produce plastics. Maximizing the use of renewable energy, for instance, whether it's as a feedstock or in our production, we will also need... We need partners in a whole plastic system and value chain system to enable a decarbonization and circularity in the whole system.

Talking about how the partnership piece has really evolved to include partners that were never even part of our value chain previously. And this is moving for an industry really, really quickly, I imagine. What about partnerships further down the line, like with, you know, waste management companies? You talked a little bit about feedstocks, looking at different kinds of feedstocks. So we move away from fossil fuels.

What about partnerships in waste and partnerships in places we've never looked before? How do you see that evolving? Oh, absolutely. Our members are also... Teaming up with waste management operators and much more so the understanding needed to be there. So leveling the understanding in the entire value chain, really closing that loop. Again, it's linked to circular economy and waste management.

start the resources. So we need to close that loop. So the link and the partnerships need to be made there to ensure that waste can increasingly be used as a feedstock to produce plastics. really important that the partnerships are increased there because in the end of the day, the access to plastic waste will also be a critical factor for our investments in the circularity to really accelerate.

Mark, what are the benefits of advanced versus mechanical recycling, mechanical being a traditional form of recycling that most people will be aware about? Why does Dow invest in both? And is advanced recycling more important, would you say?

Maybe to start with a letter, advanced recycling or chemical recycling is not more important. I think they're both equally important. We got biofeedstock as well as another option. And I think all these solutions contribute to a circular economy and contribute to decarbonisation. And...

You will need all of them to make sure that you can reach a full circular economy. The advanced recycling is really key, for example, for food packaging applications. Think about safety requirements that need to be met. So if you recycle a product through... advanced recycling you pretty much break the molecule down to oil and you're using that oil in the process to make plastics again

That has a lot of advantages that you can reach, let's say, all requirements on food safety that you would normally do with any virgin product. With mechanical recycling, you look into a completely different space, which are products that you don't break down, but you leave the plastic intact.

and you make new products out of plastic. So both recycling methods are needed and are key to reach a circular economy. Why is mass balance important? I think it's a great question, Juliet, you asked that mass balance is key for chemical recycling.

Because you want to make sure that you integrate circular feedstocks into the current production environment. And as you do not have enough circular feedstocks right now to produce all the products that we want, we just have to make sure that only part of the feedstock...

that you bring in a circular and that these products also get the right type of qualification and certification coming out of our manufacturing process and that's what mass balances is taking care of to make sure that the renewable input into the process is also the same as the output you get out of the process that you sell into renewable products and just make sure you have a perfect chain of custody.

Virginia, advanced or chemical recycling has been under some scrutiny from the EU perspective. Why is this? And what's Plastics Europe's position on this? Chemical recycling is not a new technology as such, but in terms of its scalability, it is a new element compared to mechanical recycling. And what we need to do as Plastics Europe on chemical recycling is really to... make sure that we educate policymakers around this technology and its role in our circularity journey. And it really links.

up to the recycled content target discussion and the upcoming recycled content targets of the European Union, for which many recycling technologies will be needed to achieve targets. If we think of any targets by 2030, we will have to deploy many technologies. Mechanical recycling is, of course, one and will have to be used increasingly so with further improvements. But complementary to that, chemical recycling is certainly a viable option.

especially if we compare it to landfill or energy recovery, where chemical recycling will always be the better option. So it really depends on where you compare chemical recycling. So that is one element some policymakers. just don't know very well what it can do. how it will function and if it really has a place in a future-proof plastic waste, plastic circular economy in Europe. And so that is what we are actually doing right now. There are many investments in this space as well.

a survey with our Plastics Europe members, we actually came up to a whooping number of 7.2 billion euro of planned investments by 2030. So this is certainly something that we need to continue to talk to policymakers. to make sure they understand the positioning and the role chemical recycling has. But we also need to make sure and understand there is an environmental footprint of chemical recycling. But with every technology as well, we need to do that today.

We need to have that enabling framework of the Commission of the European Union. So we need some investor security from the EU to start deploying chemical recycling at a bigger scale. Without chemical recycling, we will not meet the recycled content target. If we've got policymakers sitting on the line listening in, if you had one ask for them, what would it be?

Acknowledge chemical recycling as one technology that will help the circularity of plastics, and it's chemical recycling with the mass balancing. So that's going to be critical that we have that guarantee today. to make sure that the investments can really happen and scale up, especially in the difficult circumstances that we have in Europe for the moment. So, Oliver, back to you.

How will partnerships like the Dalmura one roll out globally? And also, will emerging markets such as Africa, Asia, ever see recycling technology like this? I guess the first question in terms of partnerships, as it's just been said, they're going to be crucial. We have to look at it in two ways. One,

There are different players in the value chain. Waste companies, companies such as Muro, we have large petrochemical companies such as Dow, but then you have converters, brands, consumers. So everyone is involved in that. And if you don't... create some linkages and cooperation along that chain, it will become a disjointed effort and no one will really be successful. The second element is, you know, a company such as Mura, we've been very successful.

in developing ourselves and attracting capital from our partners but you know at the end of the day we still are a small company we don't measure up with the likes of dow and certainly with you know the sum of the industry so partnerships be required just to have the heft of pulling something like this through. So all that requires efficiency, working together, cooperation standards, rules that we all adhere to. So again. partnerships will be essential from that perspective.

And Virginia made the point that we need to look at the entire environmental footprint. But still with you, Oliver, it's clear that advanced recycling technologies do have a great potential to accelerate a circular economy for plastics. But how does this recycling process help us? decarbonize our operations? And what are the implications for carbon emissions, basically? Yeah, so I guess, first of all, we replace

existing fossils. So there is a lot of carbon that gets generated or released in the production. of the fossil feedstocks that are currently used. So we supplant that with the conversion of the waste plastics. So that is definitely a major element. Chemical recycling is still in its infancy, so there will be a lot of cost savings going down the line, energy savings, efficiencies that will be developed. So right now, we measure very favorably.

with the pre-existing system. So there are numerous LCAs out there, independent ones, so not ones that have been authored by the companies themselves, that have taken a closer look at what we can provide. And certainly as far as Muro's concerned, concern. We compare very favorably to fossil replacement and some of our peers in this industry. So again, bearing in mind that we are at the beginning of this journey and we are going to get increased efficiencies.

we will be a major contributor to the net zero equation moving forward so or at least i hope so given what we've managed to achieve thus far if we can replicate that in the future i think we'll be in a very good position to do that

So Mark, why is it important to ensure that we create a circular closed loop economy in the context of decarbonisation? Can pursuing a circular economy actually come to the detriment of decarbonisation? Is there a trade-off at all? I think both are equally important because they are interconnected. And I think a circular economy is needed to achieve decarbonization.

If we can achieve a full circular economy, it means that we don't need to take carbon out of the ground anymore. And that also leads then to decarbonization. So both really go hand in hand. And one does not have to go to the detriment of the other. To what extent is the reduction of carbon emissions crucial for the future of our industry? There's so much debate around the imperative of reaching net zero. Is decarbonisation more important than circularity at present?

I think decarbonization and circularity go hand in hand. Decarbonization is really key for our industry. I think we all know that the world, looking at it from a climate perspective, is not in good shape. And decarbonization will be needed to get back on. track and i think it's not too late but a lot needs to be done and to reach these decarbonization goals we just need to make sure that we create a circular economy to get there

So Virginia, defossilisation or fossil replacement, we're hearing a lot of these words at the moment. Is this something that Plastics Europe supports? Do we ultimately want to move away from fossil fuels? I think the end goal is there. So the net zero and the circularity ambition of the EU is something that we also support as Plastics Europe. The question now is how?

And that is actually why, Judith, that we commissioned As Plastics Europe. I'm very proud of our members that we did by systemic a report that actually identified for us the different pathways towards net zero and circularity for... the plastic system in Europe. That was certainly a very special study that we all worked on. Another important objective there was also to create a shared evidence base. All of our stakeholders were involved. There was an independent steering committee for that.

So including public sector, including civil society, of course, also from the industry side and our value chain partners. We had some key learnings, of course, that we are drawing from and seeing what now we do next as Plastics Europe and as an industry. learning from those findings. In fact, that was my next question. Tell us about the reshaping plastics reports. I think this is essential for this conversation.

The good news is that it's possible. So our objectives for the plastic system in Europe, we can be circular, we can go to net zero by 2050. But the general line, of course, now is we need to get on with it and hurry up. accelerate in what we are doing now. So by 2050, we can achieve 78% circularity and full climate neutrality. But of course, we will need all of our partners and we link it back to the needed partnerships from the beginning.

We cannot achieve that by ourselves, by the plastics manufacturers only. So for this to happen, we will need faster systemic change and also more intense and effective collaboration and really making that circular economy work. And not only across the industrial actors and value chain, but also policymakers need to create that enabling framework for us to accelerate in this joint effort. We also saw in that report, so we of course identified many levers together.

there and surprise surprise there's no silver bullet solution to significantly reduce waste disposal and greenhouse gas emissions so we will need all upstream and downstream solutions in this joint effort so downstream levers in terms of improving sorting technologies, improving mechanical recycling, design for reuse, design for recycling, but also chemical recycling play critical roles in those scenarios.

its net zero and circularity. It's now in the next three to five years that we will have to make the investments towards the 2030, 40 and 50 targets that we are working towards.

And it's worth mentioning that information on the Reshaping Plastics report, as well as information on things like mass balance, by the way, assets that can be linked to from our Plastics Unwrapped page. How has Mura's partnership with Dow impacted Mura's plans for the future? What still needs to be done?

First of all, I mean, you know, we're grateful for our partnership with DAO. I think we have a lot to offer one another. But I think in terms of Mura's development into the space, this has been one of the major contributors to us being able to. build out our resources we have visibility on joint projects obviously it sends messages to the market

that there's a greater acceptance of chemical recycling, but also of Mura's technology. So there's a whole host of, you know, the list is never ending, but I think... The main message this sends to the market, certainly that Dow is very serious in supporting chemical recycling and views it as an important piece of the puzzle in terms of a net zero future. But I think also...

From Mura's standpoint, we demonstrate that there's a market for what Mura produces at the end of the day. We are a hydrocarbons manufacturer. We just use waste plastics. as our feedstock but then we supply the circular feedstock to DAO. And I think the second message that also is sent in sort of it's contained in a lot of the, I guess, press releases that we have jointly put into the market is that we're intending to do it at scale. So, you know, if you put all that together.

It adds up to a very, very strong message to policymakers, to NGOs, to stakeholders in this system. that there's something going on and things are moving in the right direction. In terms of the future, clearly, you know, we expect this relationship to develop further along. We will be looking at numerous joint projects. so rather than only talking about it we're going to put rubber on the road if you like or steel in the ground.

So how will partnerships like the Dow and Muro One actually roll out globally? And actually to that point, when can we expect to see advanced recycling really changing the recycling rates of local communities, for instance? The partnership with MURA is about global expansion of chemical recycling. We start building a new unit with MURA in Berlin in Germany, which is a large unit, 120 kiloton unit as of 2025.

as well with moora is building other plans of similar size around the world of which dao will be off taking product circular product that we are using to make our own products for our own customers so key is that we do it on a global basis key is

that we do it in different parts of the geography because we want to make sure at the end that all waste all plastic waste that is available today is converted back into the loop. And on that note Oliver how optimistic are you for the future of the industry?

I'm very optimistic for you know On the one hand, I have to say something like that. But on the other hand, jokes aside, you're getting a lot of messaging, again, from the entire value chain. So we have found that, you know, post the Berlin announcement, the willingness of the waste in...

to speak to chemical recyclers such as ourselves and explore ways of providing feedstock and preparing it in the necessary way to introduce it to such processes has taken a step up. It's been a better conversation.

It means they see there's more recycled content that would be available to them in the future. So there are discussions there on how they can support this whole effort. We're seeing more interest from the financial community because at the end... end of the day, you have to bear in mind that the buildout of this capacity will require billions and billions of new investment.

And that money is there, it is available out there, but it requires a certain risk profile. So there's always a risk reward equation that financial people follow. And they're taking a greater interest, they're taking an appreciation of what Mura has been doing to de-risk its technology platform, to bring about a greater fungibility, if you like, between what we do and what they do. And that leads to a perspective on greater sources of capital.

I haven't seen many negative sort of developments. It's all been very, very positive. And if I extrapolate that into the future, I'm going to be very optimistic here. And if we see the continued... support of companies such as Dow, of waste companies willing to provide the feedstock and certainly the final customers if we sort of identify them as brands and companies like that. I think things are heading very much in the right direction.

Yes, I think people being happily surprised would be a good thing. So, Virginia, are we doing enough to transform the industry? What needs to be done to go further, faster? Yeah, that was one of the key findings of the systemic report as well, that we have this window of opportunity now and in the next three to five years. And the key message there is indeed accelerate.

So we will need to find that courage, that mindset change, bold actions and investments. And I think with Dow and Murat, it's a beautiful partnership and a demonstration of those investments. And of course, many of our other members have also announced

advanced partnerships and investments in the circularity and decarbonization space. So it is going in the right direction. We will just have to accelerate more, do more. So what we can do there as Plastics Europe is to make sure that we... further educate policymakers in this regard at the EU level, but also at national level, and to make sure that this enabling framework, policy framework is there, an agile policy framework that is keeping up with new technologies, new innovation.

On that note, do you believe that the desire to transform the industry is there? Because that's what it sounds like. The technology is there. The solutions are there. We know we have the solutions. But is the desire there as well? That is certainly the desire is there. That is what I see in Plastics Europe and with all of our members. So I truly see that in the last two years now that I've been at Plastics Europe,

our member companies are walking the talk. So at least from a Plastics Europe point of view, we also see the announcements in the press, we see the partnerships, we see the investments, despite the economic difficulties with the energy crisis in Europe.

the long-term vision is still there. We are still committed to it. So that is fantastic. And we just need to make sure that we have the policymakers with us as well, civil society with us as well, that we explain what we are doing, that we are demonstrating. that we are building on that trust as well, so that all mindsets and wills are in the same direction. And that will help us to accelerate. So that is certainly something that we are working on as Plastics Europe.

comprehensive, very thorough. But what's next? Indeed, now we need to reflect as what Plastics Europe can do with this report, but also our members, right? Member companies, because we each have our roles to play. And so we have

kicked off a living roadmap where we will actually identify our pathway now as Plastics Europe. It is very important now that we reflect as Plastics Europe and our members on a follow-up action to the systemic report. And indeed, we have started... to build a living roadmap. for our industry, for Plastics Europe and our members, where we will actually set targets, milestones, 2030, 2040, 2050, on our journey towards the decarbonization and circularity. So what we feel...

can be done in this 2050 timeframe. It will give some direction to our industry on how to future-proof ourselves in Europe. And so, including with those targets, we will also set the roles and responsibilities. for ourselves, of course, first and foremost, but also what the other actors have to do or act upon to enable this transition to happen on time.

What we will also be looking at in that living roadmap will be enabling conditions, looking also at the policy framework and an agile policy framework and what the enablers there are, but also in terms of policy recommendations and also... very importantly for the credibility of such a roadmap, KPIs.

To track our progress each year or every two years, we still need to build that moving forward. So that is an exercise that we have kicked off at Plastics Europe, which we aim to finalise somewhere mid-next year. Final word, Virginia. Are you hopeful? I have to be hopeful. No, I am hopeful.

I am optimistic. I think that is the only way forward if we really want to drive change and fast change. Our members, our value chain, we just need to keep on going, keep walking the talk, keep demonstrating, keep educating, keep informing. informing what we are working on and especially in the context of new technologies such as chemical recycling as a complementary technology to mechanical recycling is a critical element in our educational program towards value chain partners.

policymakers mark how about you are you hopeful i'm definitely hopeful and i think i'm in a great job right now where i can directly contribute As I mentioned before, there's a lot of opportunities right now. There's great opportunities in the market, and that really makes me happy. We like to engage in these opportunities.

work on new stuff almost every week so i'm very hopeful that we get there judy but really as i mentioned as well there's a lot to be done still so there's an enormous amount of work in front of us And we really take on the challenge. We're ready for it. Thank you very much, Mark, Virginia and Oliver for participating today. Thank you, Judith. Thanks, Judy. Thank you very much.

It's clear that decarbonisation and circularity must be tackled in unison. There can be no trade-off and that circularity is indeed one of the key drivers or enablers for decarbonisation. It's also clear that there will need to be an array of different technologies, different solutions and different partners to solve some of these issues. sustainable change thanks for listening to plastics unwrapped

creating a circular economy for plastics. The series is hosted by Judy Hicks and presented by Dow. Stay in touch and feel free to share.