The Hunt for the Unicorn
Here lies the crux of the MOST FUNDAMENTAL PROBLEM
JBI has painted themselves in a corner.
The permits and regulations require them to use non-recyclable plastic.
The machines require 'most optimal' plastic.
The cost to make non-recyclable plastic 'most optimal' is higher than the value of the fuel they can produce.
If you can make non-recyclable plastic 'most optimal' it can be sold for more money to recyclers than to put it into a machine and turn it into fuel. The problem is that it cost more to do this than the value of the plastic on the recycle market. If it can be done economically there are thousands of recyclers that are competing for this 'non-recyclable' plastic and they have an unfair advantage, they are classified as a recycler and receive subsidies to do this which makes it profitable for them (not the case for JBI). This is what keeps the price just out of reach for JBI and the P2O industry and makes P2O non-commercially viable to make fuel.
This catch 22 leaves JBI in an impossible position... to hunt for a Unicorn- 'most optimal' non-recyclable plastic.
With 92%+ of plastic headed to a landfill and therefore not 'most optimal', that leaves a fraction of the 8% that is processed by recyclers to be recycled for JBI to via for in the hopes of diverting, processing and using for P2O.
This explains the reason for the delays, low volume production and NEGATIVE GROSS PROFIT FUEL SALES.
FREE, unwashed, unsorted plastic has been determined to be problematic, hence the statement in the 10K- "we operated under the premise that we would be able to obtain significant quantities of waste plastic for free...
NOW we would be required to purchase this feedstock"
Which essentially means that the 92% of landfill bound plastic is off the table and JBI is needing the same 8% of plastic that recyclers need to turn it into recyclable plastic. JBI is now a competitor with recyclers for plastic that can be made 'most optimal'.
The window of opportunity narrows.
Either they rely on 'gifts' of FREE plastic that is 'most optimal' which are simply not available in the massive quantities needed... or they must purchase non-recyclable feedstock and process it (at what cost?) to make it 'most optimal'.
If they can purchase plastic that is ready to use it will undoubtedly be recyclable, in which case they are permitted not to use it.
If they can buy, process and turn non-recyclable plastic into 'most optimal' plastic the cost is higher than the fuel value.
If they can become the greatest recycler on earth and process plastic for less than the market value without receiving subsidies they have at best a 5-10% profit margin selling that plastic to the recycle industry... P2Oing that plastic will eat into that narrow 5-10% opportunity and no doubt make it nonprofitable.
Catch 22.... a unicorn
The MOST FUNDAMENTAL PROBLEM as I have pointed out months ago-
'most optimal' plastic has a higher value that the fuel that can be made from it.
