How Chemical Recycling Contributes to the Plastics Circular Economy

Plastics are a critical component of modern life, indispensable in sectors such as healthcare, construction, aerospace, renewable energy, and daily consumer use. However, plastic waste has become one of our most pressing environmental challenges. Traditional recycling methods, like mechanical recycling, have helped manage plastic waste, but they are not sufficient and have limitations. This is where chemical recycling comes into play, providing an additional solution to make plastics more circular.

This article explores how chemical recycling enhances the plastics circular economy, providing insights into the benefits, challenges, and the necessary policy support to scale these technologies.

What is chemical recycling?

Chemical recycling, also referred to as feedstock or advanced recycling, breaks down plastic waste into its fundamental components. Unlike traditional mechanical recycling, which involves melting and reshaping plastics, chemical recycling decomposes them to their original building blocks. This allows for reprocessing of currently non-recycled materials, such as mixed or contaminated plastics.

Key technologies in chemical recycling

Chemical recycling encompasses several technologies, including:

• Depolymerisation: Breaking down polymers back into monomers, which can then be used to create new plastics.
• Pyrolysis: Breaking down plastics at high temperatures in the absence of oxygen to produce synthetic oil and gas.
• Hydro-cracking: Utilising hydrogen and high pressure to break down plastics into usable chemicals.
• Gasification: Converting plastic waste into syngas (a mixture of hydrogen and carbon monoxide) at high temperatures.

Examples of chemical recycling activities

Real-world examples continue to demonstrate the potential of chemical recycling. Many member companies of the World Plastics Council are investing heavily in both mechanical and chemical recycling facilities and technologies that are proving to be both viable and scalable. Their success stories highlight that chemical recycling is ready to be a key part of our sustainable waste management toolkit and the circular economy—if we provide the right policy support.

Why is chemical recycling important for the circular economy of plastics?

Understanding how chemical recycling contributes to the plastics circular economy involves recognising its ability to handle complex waste streams that would otherwise be incinerated or reach the environment as pollution. This means that chemical recycling turns plastic waste into a resource – a commodity with value.

Chemical recycling is, therefore, an indispensable part of the plastics circular economy—a system where plastics are sustainably designed, produced, used, reused, and recycled instead of discarded. By converting plastic waste back into raw materials, chemical recycling keeps plastics in use longer, reducing the need for virgin plastic production (i.e. plastics from fossil fuels such as oil, natural gas, etc.).

There is enough data^[i] to show that transitioning to a more circular economy is critical to ending plastic waste pollution. Complementary to mechanical recycling, chemical recycling helps to close the loop in the plastic lifecycle by converting plastic waste into raw materials for new plastic production, fuels, or other chemicals. This approach has the potential to significantly reduce plastic pollution and waste that ends up in landfills and oceans.

According to the Ellen MacArthur Foundation, adopting circular economy principles could reduce the annual volume of plastics entering our oceans by 80% by 2040^[ii]. Additionally, a recent report by the United Nations Environment Programme highlights that a circular economy approach could cut the volume of municipal solid waste from more than 4.5 billion tonnes a year to less than 2 billion tonnes by 2050^[iii]. Chemical recycling plays a critical role in this transition by addressing the gaps left by mechanical recycling, enabling us to recycle a broader range of plastics and thus enhancing global recycling rates.

Benefits of chemical recycling

• Handling complex and contaminated plastics: Chemical recycling effectively processes plastics that are challenging for mechanical recycling, such as multi-layered, multi-material plastics, elastomers, thermosets, some engineering plastics, and those with significant impurities like adhesives or grease. Also, some plastics, especially those with restricted or legacy substances, are better suited for chemical recycling. This method breaks down the plastics into basic chemical components, allowing for the removal of harmful substances.
• Producing high-quality recycled plastics: The chemical recycling process can create high-quality recycled plastics that resemble virgin materials. As a result, plastics made from chemical recycling can replace virgin materials in many critical applications that require high-quality plastics for safety, regulatory, and performance reasons. Some examples include contact-sensitive packaging (e.g., pharmaceuticals, food, and cosmetics), medical devices, or certain automotive components and construction products.
• Reducing landfill and incineration rates: By diverting complex plastics from landfills and incineration, chemical recycling significantly reduces greenhouse gas emissions and plastic pollution. These factors make chemical recycling a valuable complement to other recycling methods, promoting more sustainable waste management.

How chemical recycling complements mechanical recycling

It’s important to note that chemical recycling is not a replacement for mechanical recycling but rather a complement, as the two methods serve different purposes in the plastics circular economy. Mechanical recycling is best suited for clean, mainly single-polymer plastics but does not handle dirty, mixed, or degraded materials particularly well and is, therefore, insufficient to handle the diversity and complexity of today’s plastic waste. Chemical recycling fills this gap by transforming complex waste streams like mixed (e.g. multi-layered packaging) and heavily contaminated plastics into high-quality recycled materials. By converting materials that mechanical recycling cannot process into reusable raw materials, chemical recycling extends the life cycle of plastics, reducing the need for new fossil fuel-derived plastics. Therefore, a combined approach of both recycling methods is essential for creating a more sustainable future and policy frameworks should support the growth of both.

The concept of mass balance in chemical recycling

A much-discussed aspect of chemical recycling is the need for a mass balance approach. Mass balance is an attributional system used to track the flow of materials through a production process. It connects the recycled input to the output materials, accounting for any transformations or losses along the way.

That means it tracks recycled material through complex production chains, ensuring that final products further down the value chain are accurately labelled as containing attributed recycled content through chain-of-custody and auditable bookkeeping.

To guarantee transparency and credibility of the accounting and attribution process, all materials and products are certified through a third-party certification scheme, such as ISCC PLUS (International Sustainability and Carbon Certification) or REDcert.

Mass balance is already being successfully used and widely accepted in sectors like electricity, renewable energy, and forestry, as well as for fair trade in cocoa, coffee, chocolate, etc, allowing for the efficient mixing of sustainable content into existing industrial processes.

Why mass balance matters

• Enables efficient co-feeding: Mass balance allows manufacturers to blend or co-feed recycled and virgin materials in the same production process, eliminating the need for separate facilities. In large-scale plastic production, physically separating different feedstocks is not possible. Mass balance eliminates this hurdle while ensuring recycled content is accounted for in the final product.
• Supports large-scale implementation: It facilitates the transition from small-scale to large-scale applications, which is essential for expanding chemical recycling technologies. This method avoids the high costs and delays of building separate facilities, enabling faster scaling of recycling capacity.
• Third-party certification: Mass balance establishes rules to verify recycled content across the value chain and attribute it to products in a transparent, auditable manner. All materials and products are certified through an independent, third-party certification scheme, such as ISCC PLUS (International Sustainability and Carbon Certification) or REDcert, ensuring transparency and credibility.

The role of policy support in scaling up chemical recycling

To fully understand some of the challenges around scaling up chemical recycling, we must consider the importance of supportive policies. Governments and policymakers have a vital role in enabling the growth of chemical recycling by recognising the mass balance approach as a valid calculation, attribution, and certification method for accelerating the substitution of fossil feedstock by recycled feedstock. Policy acceptance of the mass balance approach is crucial for the growth of chemical recycling, as it provides a clear pathway for integrating recycled content into existing supply chains. Such clarity is essential for encouraging investment in chemical recycling infrastructure.

Key policy actions to support chemical recycling

• Recognition of mass balance: Establish mass balance as a legitimate method of accounting for recycled content and making recycled feedstock available for production, providing clarity and confidence for investors.
• Updated recycling regulations: Chemical recycling (or non-mechanical recycling should be included in national and regional recycling frameworks to support industry stakeholders. Policies should be technology-neutral to allow for innovation. Upgrading policies will also speed up permitting, which is also crucial for scaling up chemical recycling. For example, in some countries, recycling operations are considered waste management facilities, which makes it difficult to integrate recycling operations into chemicals or refining sites.
• Financial incentives: Offer tax breaks, grants, or subsidies to companies investing in chemical recycling technologies, with emphasis on supporting the scale-up of emerging technologies to promote rapid development and innovation.

Governments and policymakers worldwide must recognise and accept the mass balance methodology for chemical recycling to reach its full potential and grow global recycling rates.

Addressing concerns and criticisms against chemical recycling

Despite its potential, chemical recycling faces several challenges, particularly regarding its higher energy use and lower yield efficiency when compared to mechanical recycling. However, understanding these issues in context is important. First, chemical recycling handles “hard to recycle” waste and requires a more expansive and complex process involving additional steps that consume more energy. Additionally, mixed or contaminated waste streams often contain non-plastic materials, further reducing the overall yield.

Despite these challenges, chemical recycling targets complex waste streams that are typically incinerated (sometimes for energy recovery) or sent to landfills and, therefore, is a more sustainable alternative. It also produces high-quality recycled plastics, which are difficult to achieve through mechanical recycling. The European Commission’s Joint Research Centre confirms that chemical recycling is always more beneficial than incineration from a climate change perspective[iv].

Critics of chemical recycling often overlook the ongoing advancements in this field. Innovations are improving the energy efficiency of chemical recycling and reducing its environmental impact. New approaches, such as solvent-based purification and enzymatic recycling, show promise in terms of sustainability and efficiency. Chemical recycling is expected to become more energy-efficient as these technologies develop, reducing environmental impacts.

Environmental and economic benefits of chemical Recycling

The environmental benefits of chemical recycling are substantial. By tackling complex waste streams and keeping plastics in use longer, chemical recycling helps decrease plastic pollution in landfills and the environment, as well as incineration.

In 2022, about 73.1%^[v] of European post-consumer plastic waste was not recycled (either incinerated for energy recovery or sent to landfills). Note that Europe is one of the leading continents in terms of circularity, which means that the incineration rate (with or without energy recovery) and landfilling in other regions of the world are significantly higher. That is why chemical recycling technologies must be essential components of any sustainable waste management approach.

Chemical recycling also reduces reliance on virgin fossil fuels, thereby lowering greenhouse gas emissions and contributing to climate change mitigation.

Economic advantages of chemical recycling

Investing in chemical recycling facilities stimulates economic growth by creating jobs and fostering innovation, reducing dependence on (imported) virgin fossil fuels, thereby enhancing resource efficiency and contributing to a more circular and resilient economy.

Almost a decade ago, studies showed that circular economy initiatives could generate over $4.5 trillion in economic benefits by 2030^[vi]. These initiatives provide a roadmap to sustainable growth that balances environmental, social, and economic priorities. However, such projections are not likely to be reached if technologies critical to the circular economy, including chemical recycling, remain underdeveloped.

The urgency of scaling up chemical recycling

Chemical recycling represents a critical piece of the puzzle in addressing our plastic waste crisis and an essential component of a sustainable circular economy. It offers a complementary approach to mechanical recycling, addressing the limitations of current recycling methods and providing solutions for complex plastic waste streams.

However, for chemical recycling to achieve its full potential, robust policy frameworks and support for methodologies like mass balance are essential. Urgent action is needed, especially given the long investment and planning timelines and the complexity of adapting the infrastructure of some of the world’s largest chemical plants.

The time to act is now—let’s make chemical recycling a central part of our strategy to end plastic pollution and transition to a circular economy.

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