The European Union (EU) is accelerating the development of chemical recycling for waste plastics with unprecedented intensity. Recently, an innovative support plan proposed by France, valued at up to €500 million (approximately RMB 3.8 billion), received formal approval from the European Commission. This marks a significant step forward for Europe on its path towards achieving climate neutrality by 2050 and establishing a circular economy.
This state aid scheme, led by France and granted its first approval by the European Commission under the Guidelines on State Aid for Climate, Environmental Protection and Energy 2022, aims to encourage companies to increase investment in specific chemical recycling projects for waste plastics through direct subsidies. Aid can cover up to 40% of eligible costs, focusing on supporting the recycling of plastic waste streams that are difficult to recycle via traditional mechanical (physical) methods. These include pallets, films, non-beverage bottles, and polyester-containing textile materials.
European Commission Executive Vice-President Teresa Ribera emphasized that the plan will not only strongly support investment in the field of chemical plastic recycling but will also significantly enhance resource efficiency, promote circular economy practices, and contribute to the EU's ambitious goal of achieving climate neutrality by 2050. Simultaneously, the plan has been designed to fully consider fairness in market competition, striving to minimize potential market distortions.
In France, companies have already responded positively. For instance, Carbios is planning to build a "bio-recycling" facility for PET and polyester waste, utilizing advanced enzymatic depolymerization technology. Although the company recently underwent restructuring and layoffs, the pending decision on the EU aid scheme was one reason for its strategic adjustment. However, some large collaborative projects have also faced setbacks. For example, the chemical PET recycling project in Saint-Avold, Lorraine, France, a collaboration between Suez Environmental Services Group, Loop Industries, and SK Geo Centric, was completely abandoned in November 2023. This was primarily because the cost of producing recycled PET was significantly higher than market prices, severely impacting commercial viability. These challenges also reflect the difficulties chemical recycling technologies still need to overcome during commercialization.
The European Commission views chemical recycling as a promising method for treating plastic waste but believes it should be seen as a fallback technology due to its higher energy consumption. This strategy emphasizes that more energy-efficient processes like prevention, reuse, and mechanical recycling should be prioritized. Chemical recycling can separate toxic substances from old plastics and recover raw materials usable for manufacturing brand-new products, thereby reducing dependence on virgin petroleum and decreasing the landfilling or incineration of plastic waste. Furthermore, chemical recycling has potential applications in sectors like the automotive industry (e.g., recovering cobalt, nickel, and lithium from batteries) and the textile industry (e.g., handling blended textiles). This aligns with the EU's Chemicals Strategy for Sustainability, published in October 2020. As the foundation for nearly two decades of EU work on chemical substance registration and bans on harmful substances, this strategy is guiding the EU towards a zero-pollution industry.
Andrew Morlet, CEO of the Ellen MacArthur Foundation, points out: "The circular economy is much more than better recycling." He emphasizes that it is about rethinking and redesigning the entire economic system to keep materials in use longer and recycle them at higher value.
Consequently, the chemical industry is conducting more in-depth lifecycle assessments (LCAs) of environmental impacts. For instance, recent studies indicate that the chemical recycling (pyrolysis) of mixed plastic waste can reduce CO₂ emissions by 50% compared to incineration, and its carbon footprint may be lower than that of plastics made from fossil resources. These positive research findings provide a scientific basis for promoting chemical recycling.
The European Commission also believes that platforms like the Circular Plastics Alliance and similar initiatives will foster a more dynamic market for recycled plastics, thereby increasing demand for chemical recycling. Therefore, integrating chemical recycling into the EU innovation agenda and enabling it to benefit from green recovery investments is of paramount importance.
The EU and related companies are significantly increasing investment in chemical recycling. Beyond France's €500 million plan, Plastics Europe, the association of European plastics manufacturers, has set ambitious targets to produce 1.2 million tonnes and 3.4 million tonnes of recycled plastics via chemical recycling in 2025 and 2030, respectively, to accelerate the deployment of these technologies.
Within the EU, chemical recycling technologies are being widely researched and applied, with numerous companies actively involved. For example:
It is worth noting that beyond the EU, other countries are also advancing technological innovation and industrial application in chemical recycling of waste plastics. Hunan Vary Tech Co., Ltd. in China, with nearly 20 years of experience in solid waste resource utilization, has developed core oxygen-free pyrolysis technology, completing 6 generations of technological updates. Its technology in the field of chemical plastic recycling can convert waste plastics into high-value pyrolysis oil. In 2019, the company achieved China's first large-scale industrial operation for chemical recycling of household-sourced waste plastics. It has been operating stably for 5 years, cumulatively processing 1.1 million tonnes of municipal solid waste, including 110,000 tonnes of waste plastic.
The pyrolysis oil derived from household-sourced waste plastic can be sold directly, modified/refined into gasoline or diesel, or further processed into chemicals like olefins. The pyrolysis carbon is used as a building material or fuel, or can be further processed into carbon black. Reportedly, Vary Tech will subsequently realize a "plastic-to-plastic" perfect loop through a "dual-track parallel" value reshaping path.
These innovative technologies can transform traditionally hard-to-recycle plastic waste into high-quality feedstock, effectively reducing reliance on virgin resources.
Despite the EU's active promotion, chemical recycling still faces multiple challenges. The technology is relatively costly and requires high-quality plastic waste as feedstock. Simultaneously, the public and environmental groups remain concerned about the environmental impact of chemical recycling, calling for stricter lifecycle assessments. Therefore, the EU must balance economic viability and environmental sustainability while advancing chemical recycling.
However, with continuous technological progress and sustained policy support, chemical recycling is expected to become a vital component of the plastic circular economy in the future. The EU encourages companies to adopt the technology through fiscal measures (such as the UK's Plastic Packaging Tax) and subsidies, and has made significant investments in R&D and practical application through projects like:
The EU Innovation Fund has also provided a total of €3.6 billion in funding support for multiple chemical recycling projects.
Looking ahead, the EU plans to further expand the application scope of chemical recycling in the coming years. It is projected that by 2025 and 2030, recycled plastics produced via chemical recycling will reach 1.2 million tonnes and 3.4 million tonnes, respectively. The EU will also strengthen cooperation with the private sector to drive innovation and commercialization in chemical recycling technologies.
According to a Roland Berger report, by 2050, the global input capacity of plastic recycling plants will increase to 290 million tonnes, with chemical recycling accounting for 70 million tonnes. This represents a compound annual growth rate (CAGR) of 13%, demonstrating immense development potential.
Through robust policy support, large-scale investment, and technological innovation, the EU is propelling chemical recycling from a "fallback technology" towards a core position in the plastic circular economy. Although challenges remain, its leading role in the global circular economy transition and the significant progress made are laying a solid foundation for building a more sustainable plastic future.
