1. The future of plastics may be found in the fuel business, because plastics are made from hydrocarbons.
More and more plants are being built using plastic waste to produce diesel. The processes are still quite complicated, and it is not yet clear which technology will prevail in the end. However, it is already foreseeable that plastic waste will be used to produce fuel, which will significantly change the waste and energy management of diesel production from plastic waste. In addition, plastic waste fuel producers are in direct competition with waste-to-energy plants and cement plants that either use household waste and its plastic components to generate energy, as in the case of waste-to-energy plants, or are used as alternative fuels in cement plants. In the case of waste-to-energy plants, the plastic waste producer would have to pay the offtaker to get rid of his plastic waste, while the cement plants, unlike waste-to-energy plants, would have to pay a fee to the producer for receiving his waste, they would not be paid to dispose of the waste like waste-to-energy plants. The result is a complex network of different waste management solutions, although it is not yet clear how the governments of the European countries will deal with the changes in waste management.
For one thing is already clear: In the long term, governments will encourage research and development on conversion of plastic waste, turning plastic waste into fuel that can be used by industry and commerce, even if waste-to-energy plants are certainly a better alternative in the medium term as long as these solutions aren’t on the market. Some experts also believe that waste-to-energy plants are merely an intermediate step to waste-to-chemical plants or plastics-to-fuel plants. This remains to be seen, as there will still be high demand for district heating in northern latitudes. Countries that have a high propensity to manufacturing like Germany and the Netherlands, have demonstrated that there is a market for steam generation, to run manufacturing plants as well as to produce chemicals.
2. Plastic fractions undergoing pre-sorting operations and then returning it to the market makes little economic sense.
It makes little sense to divert plastic waste back into the economy by pre-sorting it, simply because a lot of plastic waste such as plastic water bottles that are commonly used in countries like the United Arab Emirates and Qatar have few meaningful end uses, especially if subsidies, direct or indirect, are taken into account. For many pre-sorting plants, the processing of plastic wouldn’t remain a profitable business endeavour, without subsidies and government intervention.
3. Plastics-to-fuel has garnered a lot of interest on the part of airlines who want to improve their CO2 balance by using fuels made from plastic waste.
Even in the early stages companies involved in the production of fuels from plastic waste are registering a growing interest on the part of the airlines, who fancy that they can improve their CO2 balance. The use of diesel made from plastic waste would significantly improve their CO2 balance. It is expected that this trend will continue for short to mid-haul aircrafts, and many airlines are expected to add more fuel made from plastic waste to the existing fuel supply. A major obstacle to the commercialization of fuel made from plastic waste could be that biofuels compete with fuels derived from plastics. In addition to airlines, the automotive market will show an increasing interest in fuels made from plastic waste. The reasons are similar to those for airlines, but there are other reasons as well.
Diesel prices will rise sharply once we have reached peak oil. One effect that we might see is that plastic waste becomes a substitute for oil Finally, plastic waste consists of hydrocarbon structures, and can be viewed as a primary energy source. As time goes by, the price difference we are seeing now, of plastic-derived fuel compared to conventional diesel will gradually close as new oil deposits will be harder to find.
Scientists have figured out that the driving characteristics and performance of cars do not suffer from the use of diesel fuel derived from plastic waste. Possibly this will lead to the development of a super fuel in the future, which can be made from plastic wastes which will improve the driving characteristics of your car.
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This article is just meant to inform the reader of recent developments in the energy industry at large and to share knowledge and insights with a wider audience. The author does not put forth investment recommendations.
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