Multi-Facility Location Optimization to Analyze the Economics of Plastic Recycling Systems: A Study Integrating K-Means and Monte Carlo Methods

Abstract Plastic waste recycling is essential for sustainable practices, but it suffers from inefficiency due to a lack of a secondary market and difficulties in separating the plastic resins. Plastic recycling is improving substantially as technology (especially sensing technology) advances and the need for post-consumer plastic resin grows. The economics and logistics of plastic recycling plants, on the other hand, are uncertain, due to feedstock availability, logistics, and market price availability. Furthermore, pyrolysis and chemical recycling facilities are entering the market for post-consumer plastics, which has the potential to change the economics of the system and create additional demand for clean streams of waste plastic. This study combines plastic recycling facility logistics (sorting technology) to examine economic viability and determine how transportation and facility size (i.e., clusters) affect profitability under a variety of scenarios. To achieve these objectives, the study leverages available data on the number of post-consumer plastics suppliers to locate central sorting locations by employing a K-means clustering method. This work aims to identify the optimum number of recycling facilities and their locations in the United States to make a recycling system economically viable. Monte Carlo simulations are performed to evaluate the effects of the price of plastic resin, plastic composition, the end-of-life fate of different resins, and the number of centroids on the profitability of the recycling facility. Depending on the scenario, the profit generated by recycling facilities can vary from −$197 million to $112 million. Key factors such as the sale price of resin in the secondary recycling market, transportation type and cost, and whether polypropylene is sent to secondary recycling or pyrolysis facilities are critical variables influencing the profitability of the recycling system. The plastic composition and fate of polypropylene (recycling vs pyrolysis) strongly affect the profitability of the recycling facility. The amount of HDPE and PET, both resins with existing recycling markets are key factors for economic viability. The introduction of additional recycling centers (or clusters) results in a substantial reduction in transportation costs. However, the creation of additional recycling centers results in increased operating and capital costs per ton of plastic waste processed. The optimal number of facilities is then driven by the tradeoff between capital costs and the total transportation distance and mode of transportation used. It was identified that shipping waste plastic via train dramatically decreased transportation costs over conventional semi-truck transportation. This work is aimed at identifying potential opportunities for better plastic end of life fates and identifying the circumstances in which the recycling facilities will be viable over the long term.