BASF approves Pyrum expansion loan

We’re hearing a lot from Pyrum Innovations AG at the moment. The German firm, which utilises a pyrolysis process to obtain raw materials such as carbon black and oil from end-of-life tyres, has announced several new facilities of late and has nearly completed expansion work at its main site.

In 2020, chemical company BASF invested 16 million euros in Pyrum Innovations as part of its ChemCycling project and since then has purchased Pyrum pyrolysis oil, which it feeds into its production network using the mass balance approach for the manufacture of Ccycled products. When Pyrum’s new plants go online, BASF looks forward to significantly increasing the quantities of pyrolysis oil it uses – and it is actively supporting this plant rollout.

On 15 November 2023, BASF Antwerpen NV and Pyrum Innovations signed a cooperation agreement. BASF will provide Pyrum with financing, initially 25 million euros, to help it set up at least three new plants by 2026. Each will have an annual capacity to process 20,000 tonnes of end-of-life tyres.

With the financing agreement, Pyrum and BASF aim to “significantly expand” Pyrum’s production capacity. In particular, Pyrum plans to use the funds for the construction of the previously announced plant in Saarland, Germany as well as the equity contribution and co-financing of up to five of the projects it has announced together with partners in recent months.

Further financing

Pyrum views BASF’s new commitment as one that “strengthens the trust” of existing customers and other financing partners who may also decide to invest in the company. Should Pyrum secure additional financing of 50 million euros, for example in the form of corporate bonds via the capital market, loans or investments from its partners in planned facility joint ventures, BASF will provide a further 25 million euros as a loan under “appropriate conditions.”

A very big challenge

“The phase between proving that a new technology works and generating stable results, i.e. the industrial rollout, is a very big challenge for companies after the startup phase in terms of financing,” says Pascal Klein, chief executive officer of Pyrum Innovations AG. “We are therefore very pleased about the valuable collaboration with BASF and the trust that BASF has once again placed in us with the new agreement.

“After the successful project acquisition phase of the last twelve months, nothing stands in the way of implementing our concrete rollout planning with the start of construction of up to six systems by the end of 2025. On the project side, we are virtually “sold out” by the end of 2026 and are now looking forward to implementation. The financing is the most important step towards the commercial rollout of our unique pyrolysis technology and is the basis for meeting the high demand for our products.”

“Thanks to Pyrum’s innovative and stable technology, we were able to feed the pyrolysis oil produced from used tires into our network as a recycled raw material,” adds Christoph Gahn, head of Chemical Recycling at BASF. “With the new agreement, we want to support the scaling of the technology and expand our customer portfolio with mass-balanced Ccycled products.”