Pyrum has now completed two successful commissionings and runs with the new reactor 2 (TAD 2), each in just under four weeks. In both production campaigns, production lasted 24 hours around the clock, seven days a week with a throughput of approx. 550 kg per hour (which is 80% of nominal capacity). This produced the first truckloads of thermolysis oil and recycled carbon black (Recovered Carbon Black). The products have been analysed and both the oil and the recovered rCarbon Black maintained the same high quality as the smaller No. 1 reactor produced for many years.
Thus, the first oil has now been produced in reactor TAD 2 and it has already been delivered to BASF. With this result we can verify that the new larger reactors are operating at 80% design capacity and produce end products that meet market quality standards. The next step is to, under the month of May, in the same way also carry out a commissioning of reactor no. 3 (TAD 3) up to 80%. Then the two new reactors will produce goods in parallel with a successive increase up to full Industrial level corresponding to 100% of the design capacity.
Here follows Pyrum’s article about the successful commissionings:
Pyrum Investor Newsletter 02/2024
Dear shareholders,
Since the last newsletter at the beginning of February, we have continued to work at full speed on expanding our production capacities and were able to sign a consulting agreement with GreenTech Recycling Tires AB at the beginning of March for the planning of a joint pyrolysis plant in Sweden. We also received the Recycled Claim Standard (RCS) certification, which enables us to take another major step towards sustainable textile production together with BASF. You can find our detailed answers to the other questions we received below.
1. What is the status of the new Pyrum lines in Dillingen (TAD 2 and 3)?
So far, we have completed two successful production campaigns with the new reactor 2 (TAD 2), each lasting just under four weeks. In both production campaigns, production took place 24 hours a day, seven days a week with a throughput of approx. 550kg per hour (80% of nominal capacity). This produced the first truckloads of thermolysis oil and recovered carbon black
(rCB), which were successfully sampled and analysed. It was important to find out if the oil and rCB were as good as from the first line. The answer is yes, so the first oil from TAD 2 has already been delivered to BASF. In addition, we already know that we can operate at 80% capacity and produce end products that meet the quality standards of the market. The next goals are also already being realised. These include:
- We want to start up TAD 3 in May and thus have all lines in Dillingen in operation 24/7. Ideally, TAD 3 is to be ramped up directly to 80% of its nominal capacity.
- If both new lines run in parallel, the output of the two systems will be gradually increased to 100%.
- At the same time, we want to speed up the construction of the second grinding and pelletising plant and see how we can shorten the supply chains.
Once again, it should be noted that although we will be able to increase our sales slightly thanks to increased oil production and tyre acceptance. However, sales will only increase significantly once finished rCB is supplied in much larger quantities than at present. Although rCB is already being mass-produced in line 1, it can only be manufactured in larger quantities when our second grinding and pelletising plant has been built. All components of the second grinding and pelletising plant have been ordered, with the first ones to be delivered in May 2024. However, it will take until the end of 2024 before this new plant can be put into operation. We wish we had ordered a second grinding and pelleting plant earlier, but we have only known the exact
component sizes since autumn 2023. We deliberately waited to place the order until the first one was running properly and producing saleable material in series. After that, it is relatively easy to plan the next system and determine throughput quantities. It sounds banal, but with the first system we had to estimate; with the new one we work with facts from line 1. The “old” grinding and pelletising plant was originally designed for an output of 650 kg rCB per hour, but currently only manages a maximum of 250 kg per hour in the right quality. The rCB quantity of 650 kg per hour is theoretically also possible, but the rCB is not saleable then. Although we are still trying to optimise the system and think we can improve the output, we will not come close to the maximum output of 650 kg per hour. On the other hand, the new grinding and pelletising plant will produce around 1,350 kg of rCB per hour and is therefore more than five times as efficient as the first one. The performance values of the new grinding and pelletising plant were tested several times by the plant supplier, tested and verified on its industrial plants with our rCB and secured by a Group guarantee. This would have been unthinkable a year ago.
Let’s get back to the actual Pyrum thermolysis plant, our core business. We can proudly report that it is possible to operate the plant 24/7 without any problems. So far, we have only encountered minor, solvable problems that have led to brief interruptions in operation or temporarily slowed down production. Two examples:
The supplier installed the wrong filter material (plastic) in the gas compressors that pump the gas from the reactors to the power generators. As a result, the filters have to be replaced very frequently, which repeatedly leads to short-term shutdowns. We currently have to stop production once a week for several hours to replace the plastic filters. However, this is “only” an execution error on the part of the supplier, which we have criticised and the supplier has acknowledged.
The correct filters are made of stainless steel and are purely handmade, which is why the delivery time is six weeks. The new filters are also no longer a disposable product, but will be cleaned and replaced in future as part of the system’s normal maintenance intervals (every four weeks). Once the new filters have been delivered in three to four weeks, this problem will be solved.
The supplier of the pneumatic conveyor that transports the rubber granulate from the shredder plant to the reactors has installed too little power and has to increase the conveying capacity. Even at 80% throughput, there is sometimes not enough rubber granulate in the two reactors. This is not a fundamental technical problem, but it does slow down production. This error is currently being worked on and is relatively easy to rectify. Once again, it should be noted that Pyrum has ordered the correct product and the supplier must now make improvements. Unfortunately, these complaints always cost time.
As you can see, there are a few problems with every new system. It would be great if everything always worked straight away, but unfortunately the reality is a little more merciless. It is important to keep a cool head in these moments, identify the problems quickly and find solutions with the suppliers in a timely manner.
To summarise, we are very satisfied with the commissioning and the final errors are relatively easy to solve. Unfortunately, the required parts have a delivery time of a few weeks, but we have factored this into the planned commissioning time. The plan was to reach 80% of nominal output within six months of the start of warm commissioning and 100% within a further year.
The very positive realisation from the commissioning process so far is that the new plants in the roll-out plan can be built in almost exactly the same way as TAD 2 and 3 in Dillingen. We have therefore achieved the series production status of an industrial plant.
2. What is the situation with the rCB? What quantities are now being produced in series and when will the volume go up?
First of all, I would like to say that we have unfortunately underestimated the topic of grinding and pelletising technology. We do not build grinding and pelletising plants, but thermolysis plants that produce high-quality oil, gas and rCB from rubber and plastic waste. The gas is processed by Pyrum itself so that it can be converted into electricity in an own power generator and supply the Pyrum plant with energy. The oil is also processed internally by us and can be sold directly to BASF as it comes out of our plant. However, the rCB requires post-treatment as it is not homogeneous in size (grains from 0 to 6mm). It is therefore necessary to grind the rCB to a homogeneous size – the industry standard here is approx. 10µm – in order to be able to incorporate it into rubber compounds. Several processes are available for this purpose, e.g. impact or jet mills. Each type of mill has its advantages and disadvantages and until now the market has been divided as to which is better for producing rCB from end-of-life tyres. Today, Pyrum has an impact mill and a jet mill and, together with Continental, was able to test over several months in a joint research project which works better and, above all, which mill produces better rCB, which in turn has better properties in new tyres. We are talking about extremely hard work here, but it was crowned with success. The same applies to the downstream pelletising plant, which also exists in industrial carbon black plants, but is operated quite differently there.
So, we have learnt why we have to grind the rCB and also why it took so long for this process to work properly. Nevertheless, the question arose as to why the ground rCB was pelletised again into much larger pellets. This is done for safety reasons for transport and to knead it better into the new rubber compound. It is the industry standard and no tyre or rubber plant will accept
ground rCB that has not been pelletised. These pellets also have nothing in common with the original carbon from the Pyrum reactor. Rather, it is 10µm fine powder – actually like black flour – which is only held together by a very weak binding agent so that there is no dust. If it was dusty, there would be a risk of a dust explosion during transport. The pelletising process therefore has
no relevance to quality. The quality of the rCB is determined purely by the Pyrum thermolysis process, the tyre material and the grinding technology. Put simply, pelleting is just the “transport packaging”, which essentially only has to fulfil one criterion, the pellet hardness. On the one hand, the pellets must not be too soft (below 35cN), as they would otherwise disintegrate into dust during transport and pose a risk of explosion. On the other hand, they must not be too hard either (over 50cN), as otherwise the pellets will not dissolve completely in the rubber kneader in the tyre factory. And here comes the point that everyone has underestimated, unfortunately also our supplier of the “old” pelletising plant: rCB does not always behave in the same way. Once you have found and set the right settings for a pelletising plant for carbon black from the oil industry, it can continue to run for 100 years with the same settings and the result will always be good pellets with a hardness of between 35cN and 50cN. With rCB from end-of-life tyres, however, there are minimal fluctuations in the composition, as the rCB is made from waste. Therefore, after construction and commissioning, our pelletising plant had to be expanded and improved with several components that enable the plant to adjust the dosing of the rCB powder and the binding agent in real time. Once these changes were installed, the correct algorithm had to be programmed so that the system would know how to react to the fluctuations. Today, we have found the right settings and can produce good pellets. However, due to the fluctuations, it is currently not possible to produce more than 250 kg rCB per hour in the plant.
All in all, it took us around two years to produce saleable rCB in series with the first grinding and pelletising plant. We also had to obtain a number of necessary certifications to ensure that the material could actually be used in tyres. The automotive audits in accordance with VDA 6.3 in particular were a huge challenge and led to considerable structural changes at Pyrum. We had
to be transformed from a start-up into an automotive supplier with quality assurance, a laboratory, regular audits etc. within a year, and almost no department at Pyrum was left untouched. It was therefore not only a technical challenge to get the rCB up and running, but also an organisational one that required a great deal of restructuring and personnel development.
The results of the rCB issue can be summarised as follows:
⋅ We have been producing high-quality rCB in pelletised form since August 2023, which is sold to Continental and Schwalbe.
⋅ With the current grinding and pelletising plant, we can only produce a maximum of 250 kg rCB per hour in two shifts on working days. Our licence at the Dillingen site does not allow for more.
⋅ We have passed the following certifications and audits in the last two years in order to be authorised to sell the rCB: Ecovadis Silver Status, ISO 9001, ISO 14001, ISCC+, VDA 6.3.
⋅ All components of the second grinding and pelletising plant have been ordered and will be delivered in the course of 2024. We are working to speed up the process and are utilising all the resources available to us. The new plant will have a throughput of 1,350kg rCB per hour and is therefore more than five times as efficient as the existing one. This plant is not a new development, as our rCB has already been tested on systems from our supplier. For this purpose, several lorry loads of our non-ground rCB were delivered to the Netherlands and real tests were carried out on a 1:1 scale. During these tests, it took just one day to produce saleable quality rCB in pelletised form, which was possible thanks to the previous knowledge and tests of the last two years. We have ordered exactly the same plant and therefore see no significant risks for commissioning.
⋅ With the first grinding and pelletising plant, there were no reliable guarantees regarding capacity, as there were no empirical values. The new plant has now been ordered with guarantees from the supplier, who guarantees a throughput of 1,350kg per hour based on empirical values.
We have adhered to the technical rule of “correct planning saves massive costs”, which is why it will take until the end of 2024/beginning of 2025 before revenue from the rCB sale increases substantially. We are doing our best to
speed up the process and are looking forward to commissioning with confidence.
Incidentally, the grinding and pelletising plant supplier would also have sold us a plant including guarantees a year ago. However, the asking price at that time was just under 12 million euros, which would have meant that the construction costs for a Pyrum plant would have risen by almost 6 million euros. Today, with the immense experience and the 1:1 test runs, the plant “only” costs just under 6 million euros, including the manufacturer’s guarantees.
3. Is there any news about the new Pyrum plant in Perl-Besch?
Yes, here is a short list of the milestones we have reached so far:
⋅ November/December 2023: Decision by Perl municipal council and Besch local council to amend the development plan.
⋅ Mid-December 2023 to mid-January 2024: Preparation of the new development plan at the company’s own expense by an external specialist office. The objective was clear: the new development plan must be presented for approval at the first municipal council meeting in 2024, as otherwise it will no longer be possible to clear the construction area before the grace period (1 March to 31 October). As the initial work on a new plant involves earthworks and foundations, which are difficult to carry out in winter, the start of construction in Perl-Besch would otherwise have had to be postponed until early 2025.
⋅ At the municipal council meeting of the municipality of Perl on 6 February 2024, the new development plan was approved by almost 100% of the council. There was only one abstention and no votes against.
⋅ The approval of the new development plan made it possible to apply for a clear-cutting permit from the highest forestry authority in Saarland. This permit was granted on 26 February 2024 and clear-cutting began on the same day and was successfully completed on 29 February 2024. We were therefore able to prepare the area to the extent that we can start construction work on the new plant in 2024.
⋅ The six-week public consultation period for the new development plan has now expired. There were no objections from public authorities and/or conservation organisations, such as Greenpeace or NABU, which, according to the municipal administration, is very rare and a very good sign. There was only one objection from a citizen of the municipality of Perl, which can be invalidated by an early expert opinion.
⋅ We have also already ordered and paid a deposit for the three new Pyrum reactors and the pelletising plant for Perl-Besch. The price conditions for the shredder plant have been negotiated and only minor details are still missing in order to finalise the contract negotiations. The detailed planning and structural engineering have also been ordered and we expect the first earthworks and foundation work to begin in summer 2024.
We are very happy that everything worked out so well and would like to thank the Saarland state government, the Perl municipal administration and the Besch local council for their excellent and trusting cooperation. Of course, we would also like to thank our employees, proTerra and Paulus & Partner, who all worked long hours to ensure that the expert reports were completed on
time.
We hope that this newsletter has given you some important insights into what is currently happening at Pyrum and can only encourage you to send us feedback and submit further questions for the next newsletter in the third quarter of 2024.
Yours, Pascal Klein
