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U.S. Plastic-to-fuel Market: Converting Garbage into Fuel is a Lucrative Business

Published On : 2015-05-20

Conversion of plastic to fuel presents an exciting opportunity to develop an alternate source of fuel. Every year, large volume of plastic is sent to landfills for disposal, however, with the help of effective conversion technologies, plastic can be converted into fuel. Currently, the available methods for plastic-to-fuel conversion include pyrolysis, depolymerisation, incineration, hydrolysis, anaerobic digestion, and gasification.

Governments around the world are trying their level best to reduce their dependence on crude oil. High oil prices in the recent past, and uncertain geopolitical conditions in the Middle East have prompted governments to look at other alternatives. Plastic-to-fuel technology offers a cost-effective, eco-friendly opportunity of creating a reliable source of energy.

In spite of various regulations, plastics are used widely all around the world. According to estimates, on an average, the production of plastics has grown by 10% every year since 1950s. The amount of plastic waste generated each year poses challenges for its disposal, as only a small percentage of the total plastic waste can be recycled. The availability of such a large volume of plastics offers a feasible option to manufacturers to convert it into fuel.

Plastic-to-fuel Market at a Nascent Stage

Although plastic-to-fuel technology has been termed as the technology of the future, there are certain restraints to its implementation. For example, conversion of plastic-to-fuel through pyrolysis is not considered recycling in the US, and due to this, companies are not able to claim any recycling grants. However, plastic-to-fuel conversion through pyrolysis is still entitled for tax credits and grant for sites.

Complexity involved in setting up a processing plant is another restraint for growth of the plastic-to-fuel technology. Starting a processing facility requires high initial capital, and due to this many vendors are locked out of this market. It is expected that government support and technological innovation will help tide over these problems in the future.

In the United States alone, some 100 billion plastic shopping bags are used each year, and according to Environmental Protection Agency (EPA), only around 13% of this is recycled. High production and use of plastic bags in the U.S. presents a strategic opportunity to companies to get feedstock at little or no cost.

U.S. Plastic-to-fuel Market Anticipated to Expand at a CAGR of 6.79% through 2020

Future Market Insights’ analysis revealed that plastic-to-fuel market in the U.S. was valued at US$ 42.78 million in 2015. Although at a nascent stage, the market is anticipated to witness a CAGR of 6.79% through 2020 to reach a valuation of US$ 98.26 million by 2020. Most of the companies involved in the plastic-to-fuel conversion business make profits through the following three methods.

Sale of processors

Sale of fuel produced

Revenue generated through royalties

According to FMI’s analysis on the U.S. plastic-to-fuel market, the revenue generated through sale of processors was the most dominant segment in the U.S. currently. Around 70% of the revenue generated in the U.S. plastic-to-fuel market was through the sale of processors. It is anticipated that this revenue model will continue to be the most lucrative for companies in the near future as well. However, technological innovation and increase in propriety equipment ownership will translate into higher revenues through royalties. This revenue model is projected to witness a CAGR of 7.8% through 2020, in spite of having a miniscule share in the U.S. plastic-to-fuel market.

Leading plastic-to-fuel companies in the U.S. include Plastic2Oil, Agilyx Corporation Vadaxx Energy, and RES Polyflow. Most of these key players in the plastic-to-fuel market rely on pyrolysis technology to convert plastic waste into fuel. These players have made modifications to their waste processing technology and rolled out patents for the same. Pre-processing of waste material, which increases the operational costs, is an area where most of these companies are focussing on currently.

http://www.futuremarketinsights.com/articles/details/us-plastic-to-fuel-market

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