KUALA LUMPUR (Oct 9): Petronas Chemicals Group Bhd (PCG) has reached a final investment decision (FID) to construct Asia’s largest advanced chemical recycling plant in Pengerang, Johor with a capacity of 33 kilotonnes per annum (ktpa).

The plant, which is targeted to be operational by the first half of 2026, is part of PCG’s new plastics economy agenda to support the transition towards a circular economy and contribute to a sustainable plastics ecosystem, the group said in a statement on Monday.

"The plant will unlock plastics waste chemical recycling capabilities in Malaysia through the conversion of end-of-life plastics into pyrolysis oil or TACOIL, which can be used as chemical feedstock towards the production of sustainable plastics," it added.

PCG managing director and chief executive officer (CEO) Mohd Yusri Mohamed Yusof said the construction of the plant enables the group "to propel the nation’s aspiration in phasing out single-use plastic, in line with Malaysia’s Plastic Sustainability Roadmap 2021-2030, while fulfilling the growing demand from major brands for sustainable packaging”.

The FID announcement also saw the signing of a technology licence agreement between PCG’s subsidiary and Plastic Energy Ltd, as well as the awarding of the engineering, procurement and construction (EPC) contract to Mutiara Etnik Sdn Bhd.

PCG said Plastic Energy will be providing the chemical recycling technology for the plant through its patented TAC process, which heats mixed post-consumer plastic waste in the absence of oxygen.

"This process then produces hydrocarbon vapours, that are condensed into pyrolysis oil or TACOIL which can be used as a substitute for hydrocarbon feedstock in the production of food-grade recycled plastics," the group said.

Plastic Energy CEO Carlos Monreal said that after starting its collaboration with PCG in 2019, the company is pleased to be chosen as the technology provider for the new plant in Pengerang. "Together we share a common goal to reduce plastic pollution in Asia by increasing the amount of plastic waste that can be recycled and expanding recycling infrastructure in the region,” he said.

Meanwhile, Mutiara Etnik managing director Datuk Surendran Menon said the company is excited to be the EPC partner for the project. "We have always been committed to excellence in every project we undertake, and we will ensure that this plant will meet PCG’s expectations,” he said.