Industry News

PCG reaches FID for advanced chemical recycling plant in Asia

by | Oct 11, 2023

The PETRONAS Chemical Groups Berhad (PCG) recently achieved the final investment decision (FID) and will now begin the construction of Asisa’s largest advanced chemical recycling plant.

When the FID was announced, the signing of agreements around this project also occurred, these agreements include the Technology License Agreement (TLA) between PCG’s subsidiary and Plastic Energy Limited (Plastic Energy) and Mutiara Etnik Sdn. Bhd was awarded Engineering Procurement and Construction (EPC).

PCG is an excellent choice to construct the recycling plant as they are the leading integrated chemicals producer in Malaysia and one of the largest chemical producers in Southeast Asia. PCG also operates several of the best quality production sites in Malaysia, Asia-Pacific, Europe and North America. PCG’s primary focus is on manufacturing, marketing and selling a wide range of chemical products, these include olefins, polymers, fertilisers, methanol and other chemicals and products. With these plants and products, PCG also has a combined production capacity of 15.4 million metric tons per annum (mtpa). Furthermore, PCG has more than three decades worth of experience within the chemical industry, meaning PCG is well-established as part of the PETRONAS Group with its role being to maximise Malaysia’s natural gas resources.

Plastic Energy is extremely prominent within the chemical recycling industry, as they offer sustainable solutions to help prevent plastic waste, with their main focus being directed to transforming previously unrecyclable plastic waste into a valuable resource. They are a well-known company due to their tested and patented chemical recycling technology which converts end-of-life plastic waste, into optimal feedstock. Plastic Energy also has experience in recycling plants, and selling recycled plastic, as it has two plants in operation in Spain and has sold TACOIL produced within these plants. The TACOIL has been produced by converting end-of-life plastic waste and the product can go on to being used to replace fossil oils in the production process of new plastics. This company is leading in the transition to a low-carbon circular economy for plastics.

The final company, Mutiara Etnik is an EPCC Contractor with ISO certification and CIDB Grade 7 registration, making them the ideal partner to undertake the management of the construction project for the plant. The company aims to become a leader in providing businesses with green solutions through initiatives which highlight clear and sustainable pathways. Their primary focus is waste to energy systems, material handling, port equipment, recycling, recovery, renewable energy and building and infrastructure projects. They are also aiming to decarbonise their strategies to reach sustainability goals and align their business with ESG commitments.

With all these companies involved and dedicated to developing chemical recycling, this plant will be innovative and necessary to the recycling process. The plant will be based in Asia, in Pengerang, Johor, it plans to be operational by the first half of 2026 and will have the capacity of 33 kilo-tonnes per annum (ktpa). This new plant aims to produce sustainable plastics through advancing Malaysia’s ability to convert end-of-life plastics into pyrolysis oil or TACOIL. Once converted through a chemical recycling system, the TACOIL will be used as feedstock for the production of sustainable plastics.  

The companies have come together for this partnership as each of them have a key role to play, Plastic Energy will provide the chemical recycling technology for the plant from its patented TAC process. This process involves heating mixed post-consumer plastic waste whilst keeping it oxygen free. The products of this are hydrocarbon vapours, these will be condensed into pyrolysis oil. This oil is an excellent product as it will replace the hydrocarbon feedstock in the production of food-grade recycled plastics, resulting in more environmentally friendly and sustainable plastics.

The PCG Managing Director/Chief Executive Officer Ir. Mohd Yusri Mohamed Yusof commented on the FID, saying, “Through the advanced chemical recycling plant, we envision driving innovation across the plastics value chain while creating opportunities for all parties, from waste collectors to manufacturers, to jointly contribute to the circular plastics economy. This enables us to propel the nation’s aspiration in phasing out single-use plastics, in line with Malaysia’s Plastic Sustainability Roadmap 2021-2030, while fulfilling the growing demand from major brands for sustainable packaging.”

This new plant will have many advantages and open multiple new possibilities for the recycling industry, it will also benefit Malaysia’s plastic value chain, going further than closing the loop of the plastics life cycle, through creating an ecosystem which promotes the transition to a circular economy.

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