Under The Radar Micro Cap’s Technology Could Earn It Over $4.65 Billion

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Tuesday, March 29, 2022

An estimated 300 billion pounds of plastic waste is littering the world’s oceans today. Despite an ongoing romance with the idea of municipal recycling, 91% of the 8.3 billion metric tonnes (~18.3 trillion pounds) of plastics produced during the six decades through 2017 ended up in the ocean, landfill, incinerator or someplace other than a recycling facility. Sad fact is that traditional recycling programs are selective in feedstock and just haven’t worked as planned, leaving a deepening problem of plastic waste that the world has yet to solve.

There is hope in the wings, as small companies are taking early leader positions in advanced recycling of post-use plastics, converting the waste to high-quality materials with economics that support broad adoption. Companies like Aduro Clean Technologies (CSE:ACT) (OTCQB:ACTHF), Quantafuel (OTCQX:QNTFF), and Agilyx (OTCQX:AGXXF) are all in the chemical recycling business in a bid to clean up the Earth and make the lifecycle of plastic circular.

Up until recently, plastic waste as an “out of sight, out of mind” problem for the U.S., with the standard disposal involving packing the trash in shipping containers and sending it off to China. That was until China essentially closed its border to U.S. (and other countries) waste plastic at the end of 2017, sending recycling businesses reeling to find new buyers with limited success. Export reports show that some 19,000 shipping containers of plastics destined for Chinese recycling facilities every month are now stuck within U.S. borders.

The answer is not to burn or bury it. The solution is widespread adoption of new technologies and retrofitting existing or creating new recycling programs that are far more efficient than anything in the past.

Quantafuel’s flagship plant in Skive, Denmark is reportedly scaled to process 20,000 tonnes annually of mixed plastic waste primarily from households in Denmark and Norway that otherwise would be incinerated or disposed of at a landfill. The liquid products from the recycling process are expected to be shipped to BASF, who will upgrade the material to new plastic products and chemicals.

With operations in Oregon and Switzerland, Agilyx enables customers to recycle post-use plastics to high value, virgin-equivalent products. The company pairs its molecular recycling technology with Cyclyx, its feedstock management consortium designed to improve recycling rates from 10% to 90% by chemically fingerprinting plastic waste and matching it to appropriate recycling processes. Agilyx conversion technology utilizes pyrolysis without a catalyst and can convert mixed waste plastic to naphtha and fuels or depolymerize specific plastics such as polystyrene and PMMA (acrylic) back into virgin-quality products.

Trading at about one-twelfth of the valuations of Quantafuel and Agilyx ($28 million vs. ~$330 million), Aduro Clean Technologies is the sleeper of the group with its patented technology that, like its higher-priced peers, turns plastic waste into a valuable resource for a greener environment.

Plastic is made of polymers, petroleum-derived materials consisting of long, strong molecular chains that make it durable and useful for humans, but highly problematic for nature with degradation taking some 400+ years. Aduro’s Hydrochemolytic Plastics Upcycling (HPU) process deconstructs the polymer chains into smaller hydrocarbon molecules like those found in conventional fuel. HPU is a variation of Aduro’s HBU (Hydrochemolytic Bitumen Upgrading) that is designed for use in Canada’s famous Athabasca region that is rich in bitumen serving the oil and gas industry.

The HPU process is unique in that it requires no expensive pre- or post-processing. A simple conversion begins with a mechanical breakdown of unsorted plastic to form granules, which are then fed into a reactor that performs a chemical deconstruction of the polymer chains. The output is a valuable fuel that can be used to power anything from cars and trucks to airplanes and ships. In fact, the ship hosting the processor will run off the fuel produced from the plastic pollution in the ocean, with the excess drummed and sold for any number of applications.

Furthermore, with the integration of carbon dioxide treatments, the emissions from the HPU and ship can be converted into a coagent material that can be fed into the HPU reactor towards the ultimate goal of a zero emissions system. The impact of this floating garbage guzzler on our planet is truly amazing. According to “the ACT vision video”, if just 10% of the plastic waste in the ocean were collected and processed using the HPU process, the output of barrels of diesel would circle the Earth’s equator nearly two times, or almost 50,000 miles. Aduro’s technology is not just a vision, rather it is a novel technology that has been 3rd party validated. The technology has also been featured in Forbes.

What would that mean to a company like Aduro? A standard 55-gallon barrel for transporting oil is 34 inches high and its approximately 3.17 billion inches around the Earth’s middle twice, which translates to roughly 93 million barrels of product. Even at very conservative $50 per barrel, that’s $4.65 billion, “company maker”-type of revenue and enough to attract the attention of a major player in the market looking to advance ESG initiatives.

Billions to the top line, all the while reducing the world’s carbon footprint to produce energy at better economics than anything that exists today. Aduro estimates that by using its tech a recycling business can reduce capex costs by a stunning 75% while simultaneously increasing yield by 90% than existing recycling technologies, as explained in this video.

That’s just extrapolating and hypothesizing on 10% of the plastic floating in the ocean. Factor in the billions of pounds of waste looking for some place to go and the opportunity for licensing really starts to become evident. With third party validation of the HPU process now completed, Aduro is positioned to construct three pilot plants with partners in 2022, key milestones that will prove the feasibility of scaling as it moves towards the commercialization phase.

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