Oil major BP has signed an eight-year offtake agreement with Circtec, a UK-based technology company that develops and operates a pyrolysis chemical process technology and whose plants convert hard-to-recycle waste tyres into HUPATM – Circtec’s proprietary renewable drop-in marine fuel, and circular naphtha petrochemical feedstock.
Under the agreement, BP is committed to purchasing up to 60,000 tonnes/year of HUPATM renewable drop-in marine fuel and up to 15,000 tonnes/year of circular naphtha petrochemical feedstock, on a take-or-pay basis, from Circtec’s new commercial-scale plant, for eight years after the new plant is commissioned.
The new EUR285 million plant, currently awaiting construction in Delfzijl, the Netherlands, will be constructed to have the capacity to process 200,000 tonnes/year of waste tyres into HUPATM renewable drop-in marine fuel, circular naphtha petrochemical feedstock, and circular chemical recovered carbon black (rCB). Construction of the new plant is planned to start this year with the first phase of the plant intended to become operational in 2025.
BP has also committed to providing EUR12.5 million of investment through debt capital, to support the EUR100 million development of the first phase of the Delfzijl plant.
Over the past decade, Circtec has invested in R&D, patent protection, and extensive trials with multiple shipping operators to bring the HUPATM product to the marine transport market. HUPA is 50% biogenic and its biogenic portion is certified as having a GHG reduction impact of 87% compared to fossil marine fuel. The product, which is compliant with marine fuels regulations and standards – is ISCC certified for its Greenhouse Gas reduction effect and can be used by shipping operators, blended with fossil marine fuels, to meet the requirements of legal mandates on marine decarbonisation under the EU’s FuelEU Maritime Regulation and Renewable Energy Directive.
Starting next year, European Union legislation1 mandates a progressively increasing obligation on decarbonisation of marine transport rising to 80% decarbonisation by 2050. This legislation is expected to drive demand for shipping companies sailing into and out of Europe to find lower carbon fuel products that are available at scale to fuel their vessels.
Circtec claims it is the only company globally that can make HUPATM drop-in marine fuel from waste tyre feedstock that addresses these European mandates.
The Delfzijl plant is Circtec’s first commercial-scale plant investment following a 15-year technology and product development process. Circtec is planning the development of several plant projects globally over the next few years, starting with North America and Southeast Asia, as direct owner-operator plants and as joint-venture licensing partnerships.
A previous long-term offtake partnership for the entire output from the new Delfzijl plant of Circtec’s circular chemical product, rCB, was announced in 2021with Birla Carbon, one of the world’s largest producers of the chemical carbon black. This is supplied to Birla Carbon for its Continua SCM flagship decarbonisation product line.
The processing capacity of the Circtec Delfzijl plant will account for circa 6% of European waste tyres annually; over 50% of European waste tyres are currently burned in cement plants or exported to Asia for disposal.
An ISO-standard Life Cycle Assessment of the Circtec plant investment shows it is expected to reduce GHG emissions by equivalent to circa 3% of the national emissions of the Netherlands’ chemical industry sector once the plant is at full scale.