Circtec to supply bp with tyre-based marine fuel

Within the framework of an eight-year offtake agreement, UK-based tyre pyrolysis specialist Circtec will annually supply energy company bp with up to 75,000 tonnes of fuel and feedstock recovered from end-of-life tyres. Circtec will process these tyres at a plant it will set up in The Netherlands. In support of this offtake agreement, bp is providing Circtec a €12.5 million debt finance facility to contribute to the capex for expanding this plant into a commercial-scale operation.

“We’re excited to work with the team at Circtec, especially as the company enters a new chapter and begins its expansion in The Netherlands this year,” comments Sven Boss-Walker, senior vice president Refining and Products Trading at bp. “With the HUPA renewable drop-in marine fuel, Circtec is supporting the shipping industry with the solutions it needs to help achieve its sustainability goals.”

HUPA offers GHG reduction

Over the past decade Circtec has invested in research and development, patent protection and extensive trials with multiple shipping operators to bring its proprietary HUPA renewable drop-in marine fuel to the marine transport market. HUPA is 50 per cent biogenic, and its biogenic portion is certified as having a greenhouse gas reduction impact of 87 per cent compared to fossil marine fuel. The product’s greenhouse gas reduction effect is ISCC certified 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.

Under the agreement, bp is committed to purchasing up to 60,000 tonnes per year of HUPA marine fuel and up to 15,000 tonnes per 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 €285 million new plant, currently awaiting construction near the port of Delfzijl, will have the capacity to process 200,000 tonnes per year of waste tyres into HUPA renewable drop in marine fuel, circular naphtha petrochemical feedstock and circular chemical recovered carbon black (rCB). Construction of the new plant is scheduled to start this year, with Circtec intending the first phase of the plant to become operational in 2025. The €12.5 million debt capital investment from bp will support the €100 million development of this first phase of the Delfzijl plant.

“This entry into offtake and funding agreements with bp provides Circtec with a long-term offtake relationship, which will assist with our growth plans over the coming years and accelerate the development of our pyrolysis plant capacity to produce renewable and circular products from waste feedstock,” says Allen Timpany, chief executive officer and co-founder of Circtec. “We hope that by working together, Circtec and bp can help shipping operators tackle their GHG emissions while addressing the serious environmental problem of end-of-life tyres. The Delfzijl plant will be a significant industrial decarbonisation investment in the Netherlands, and bp’s support is an important part of making that happen.”

EU legislation driving demand

Starting from next year, European Union legislation mandates a progressively increasing obligation on decarbonisation of marine transport, rising to 80 per cent 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 considers itself to be the only company globally capable of making HUPA drop-in marine fuel from waste tyre feedstock that addresses these European mandates.

The processing capacity of Circtec’s Delfzijl plant will account for circa six per cent of European waste tyres annually. According to waste tyre data published by the European Tyre Manufacturers Association, over half of European waste tyres are currently burned in cement plants or exported to Asia for disposal.

In 2021, Circtec announced a long-term offtake partnership for the entire output of recovered carbon black (rCB) from the new Delfzijl plant with Birla Carbon, which will use the substance for its flagship Continua SCM decarbonisation product line.

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.