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HOUSTON (ICIS)–Dow and Nexus Circular LLC (“Nexus”) have announced they have signed a letter of intent (LOI) detailing that Dow will receive chemically recycled plastic feedstock from a newly announced Nexus facility in Dallas, Texas. Dow will then use the hydrocarbon feedstock to produce chemically recycled polymers.

The facility will have the input capacity to process over 26,000 tonnes/year of hard-to-recycle plastics. Neither company disclosed start-up timing of the plant, or investment details.

Nexus has been operating commercial scale chemical recycling facilities since 2019, and has recently announced plans for a new facility outside Chicago, Illinois. Nexus technology is able to accept polypropylene (PP), polyethylene (PE) and polystyrene (PS) waste plastic, and does not require pre-treatment other than contaminate sortation.

This most recent announcement is a continuation of Dow and Nexus’s partnership in this space. In 2020, Nexus was named a grant recipient of Dow’s Business Impact Fund for the development of pre-processing to incorporate post-consumer, hard-to-recycle plastics collected through the Hefty EnergyBag program in Cobb County, Georgia.

“Expanding our past, scaled success with Nexus to drive production of high-quality circular feedstocks, the new facility in Dallas marks an important step in meeting unmet market demand for circular plastics in Texas and other markets,” said Manav Lahoti, global sustainability director for Hydrocarbons at Dow.

This comes as Dow sees 140% sales growth within their mechanically recycled plastics portfolio, Revoloop, since 1H 21.

At present, the demand for recycled plastics far outstrips supply. Beyond the capabilities of mechanically recycled polyolefins, chemically recycled polyolefins offer virgin like quality and thus inherent food-grade status, both of which are very attractive to consumer goods companies.

Building off of this incentive, Dow has shared that they can charge a premium of up to $1,500/tonne for chemically recycled resins, in comparison to their virgin counterparts.

According to the ICIS US recycled polyethylene (R-PE) market report, natural coloured post-consumer, food-grade recycled high density polyethylene (R-HDPE) pellets are priced at a premium of roughly $660-770/tonnes greater than virgin HDPE resin.

It is expected that market pricing will also shift as chemical recycling technologies continue to gain scale, with the bulk of announced US capacity expected to be online within the next 1-3 years.

As with traditional recycling methods, chemical recyclers see the ability to source sufficient high-enough quality waste volumes and increasing collection and sorting infrastructure as the key challenges to growth.

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