The petrochemical industry is increasingly turning its attention to chemical recycling. (Image source: Synergy)

As environmental concerns and regulatory pressures gain precedence, the petrochemical industry is increasingly turning its attention to chemical recycling

Often positioned as a potential game-changer, this technology seeks to offer a more sustainable path by converting plastic waste back into its original chemical components, enabling the production of new materials with properties comparable to those made from virgin feedstocks. Its attractiveness lies in addressing the twin evils – the plastic waste crisis and the need for higher-quality recycled materials.

How does chemical recycling work?

Chemical recycling, also referred to as advanced recycling, differs from mechanical recycling in both process and potential. Rather than grinding and melting plastics, it involves breaking down polymers into monomers or other base chemicals through processes such as pyrolysis, gasification, or depolymerisation. This allows for the creation of new plastics suitable for applications that require high purity, including food-grade packaging, where mechanically recycled plastics often fall short.

Several companies around the world have begun to scale up their chemical recycling initiatives.
• ExxonMobil, for example, has announced plans to invest US$200mn to expand its chemical recycling capabilities at its Baytown and Beaumont complexes in Texas. With its proprietary Exxtend technology, the company aims to process up to half a million tons of plastic waste per year by 2027.
• In Europe, Eastman Chemical is building a US$1bn molecular recycling facility in France. Once operational, it is expected to recycle up to 160,000 tons of plastic waste annually using polyester renewal technology.
• In India, Reliance Industries has become a pioneer in this space, producing circular polymers at its Jamnagar refinery, which has received ISCC-Plus certification to ensure sustainability and traceability.

However, the economic challenges associated with chemical recycling are substantial. These technologies are energy-intensive, resulting in higher operational costs compared to traditional recycling or even the production of virgin plastics. In some cases, chemically recycled polyethylene terephthalate (PET) can cost two to three times more than its virgin counterpart, limiting its competitiveness. Additionally, the process often requires clean and sorted plastic waste as feedstock, which is difficult to obtain in many regions due to inadequate waste segregation and contamination. This issue not only affects cost but also scalability.

Advantages of chemical recycling

From an environmental standpoint, chemical recycling does offer certain advantages. Studies indicate that pyrolysis — a commonly used method in chemical recycling — can emit up to 50% less CO₂ than the incineration of mixed plastic waste. The process also has the potential to eliminate hazardous substances embedded in plastics, such as legacy chemicals and substances of very high concern (SVHC), resulting in cleaner end-products. Nevertheless, these benefits must be weighed against the significant energy inputs required for these processes. Without low-carbon energy sources or efficiency improvements, the net environmental gains may be limited.

Looking ahead, the development of chemical recycling will depend on a combination of technological, regulatory, and economic factors. Enhancing waste collection and sorting infrastructure will be crucial for improving feedstock quality. Policy frameworks that clearly define recycled content and support traceability will help create market confidence. Meanwhile, collaboration between governments, research institutions, and industry stakeholders could accelerate innovation and reduce costs over time.

While chemical recycling is unlikely to single-handedly resolve the petrochemical sector’s sustainability challenges, it may play a valuable role within a broader strategy for circularity. When complemented by upstream design changes, responsible consumption, mechanical recycling, and waste minimization efforts, it has the potential to contribute meaningfully to the sector's transition.

Whether it ultimately transforms the petrochemical industry or becomes a niche complement to existing methods will depend on how these challenges are addressed in the years to come.

This article is authored by Synergy Consulting IFA.

The petrochemical industry stands at a pivotal juncture. (Image source: Synergy Consulting)

As the world pivots towards a low-carbon future, the petrochemical industry finds itself at a crossroads, balancing growth prospects with evolving regulatory and sustainability challenges

The global energy transition is reshaping industries, compelling them to integrate clean energy solutions alongside their continued reliance on fossil fuels. While much of the focus has been on the deceleration of oil and gas consumption as primary energy sources, petrochemicals remain a critical segment with sustained demand projected well into the coming decades.

This sector, heavily dependent on fossil fuel-based feedstocks, produces essential chemicals that form the backbone of numerous industries, including plastics, fertilizers, and pharmaceuticals. Unlike transportation fuels, whose consumption forecasts have fluctuated, petrochemicals are expected to witness steady demand with fewer disruptions. The International Energy Agency (IEA) projects that petrochemicals will account for more than a third of oil demand growth by 2030, primarily driven by rising consumption in developing economies. In India, for example, demand for key petrochemicals such as ethylene and propylene is expected to increase two- to three-fold over the next two decades, fueled by urbanisation, industrial expansion, and the drive for decarbonisation.

Complex sustainability imperatives

However, this growth trajectory exists alongside increasing scrutiny of the industry’s environmental footprint. Governments and regulatory bodies worldwide are tightening climate policies, imposing restrictions on single-use plastics, and advancing circular economy initiatives. As a result, petrochemical producers must navigate complex sustainability imperatives while maintaining competitiveness.

The environmental impact of petrochemical production has become a focal point for policymakers, investors, and consumers. The industry accounts for approximately 18% of global industrial carbon emissions, with energy-intensive processes such as refining and steam cracking being major contributors. Key challenges include:
• Regulatory pressures: Carbon pricing mechanisms, plastic bans, and stricter emissions controls are being implemented globally, increasing production costs and pressuring profit margins.
• Circular economy and recycling: Advances in chemical recycling, biodegradable alternatives, and closed-loop manufacturing systems threaten to reduce reliance on virgin petrochemical feedstocks, reshaping traditional demand patterns.
• Investor sentiment: ESG-focused investment strategies are compelling oil majors and petrochemical producers to present credible decarbonisation roadmaps, with capital allocation increasingly favouring companies with sustainable practices.

To ensure long-term viability, petrochemical producers are exploring multiple strategic pathways:
• Feedstock diversification: Investments in bio-based and recycled feedstocks are gaining traction as companies seek to lower emissions and align with sustainability goals.
• Carbon capture and utilisation (CCU): The integration of CCU technologies is emerging as a key solution to mitigate emissions, though economic feasibility remains a challenge.
• Advanced materials innovation: Research into high-performance polymers, biodegradable plastics, and alternative chemicals is accelerating, offering new avenues for growth beyond conventional petrochemicals.
• Integration with renewable energy: Shifting production facilities towards renewable power sources and hydrogen-based processes is becoming a priority for reducing the sector’s carbon footprint.

The petrochemical industry stands at a pivotal juncture, balancing robust demand with the imperative to adapt to a rapidly evolving regulatory and sustainability landscape. While traditional growth drivers remain intact, companies that embrace innovation, diversify feedstocks, and integrate low-carbon solutions will emerge as industry leaders. The coming decade will serve as a litmus test for the sector’s resilience, ultimately shaping its role in a decarbonising world.

This article is authored by Synergy Consulting IFA.

The facility is built on a 25,804 sqm site. (image source: AquaChemie)

AquaChemie, a prominent player in the regional chemicals industry, has unveiled its new state-of-the-art manufacturing facility, AquaChemie Global Chemicals (ACGC), at the Khalifa Economic Zone Abu Dhabi (KEZAD).

The facility is built on a 25,804 sqm site with an initial investment of US$25mn.

At the opening ceremony of the factory, V Anandkumar, the founder and managing director of AquaChemie, said, "We've been moving towards being local and how to bring in multinational product lines, specialty chemicals, and bring it to this country and produce it here, adding value to localisation...we started our journey in building this facility in 2022, and we already have close to around US$50mn to US$60mn worth of chemicals to be supplied to ADNOC and other companies here. We found global partners who are willing to come and partner with us and produce those products here."

"We are also looking for some more acquisition in the near future within UAE," he added.

By localising production, the facility will reduce the region’s dependence on imported specialty chemicals, which have historically been costly and time-consuming to procure. The company said it will support the UAE's ‘Make it in the Emirates’ initiative.

Circular economy

AquaChemie’s new plant is strategically positioned to meet the growing demand for oil and gas upstream chemicals, particularly for ADNOC and other major regional players. It will also cater to industries such as paints, coatings, and construction, providing high-quality, locally produced chemicals that reduce costs and lead times.

Speaking to Oil Review Middle East, Anandkumar said, "Make it in the Emirates is something that is going to be a part of the way we [the industry] do business in the future. And we've already started it. As a company, we foresaw that so we were prepared. Today, there are a lot of companies scrambling to embrace that. But we are ahead of the game."

Reiterating the company's portfolio, Anandkumar said, "We are heavily contributing towards oil and gas, both upstream and downstream. We are also into drilling, cementing, frack and oil tubing. We provide services for the refinery, petrochemicals, and all these sectors." 

There are at least 12 emergency safety showers installed at the factory, according to Anandkumar. Shobitha Anand, executive director of AquaChemie Global Chemicals, said, "we want to be as compliant as possible
with the whole facility."

AquaChemie’s new manufacturing facility leverages significant advantages, including reduced utility costs, tax exemptions, duty benefits, and a seamless export network across the GCC. These cost savings are directly passed on to customers, enhancing operational efficiency and affordability.

The plant is equipped with advanced features, such as reactors for processing both liquid and solid chemicals, precision blending and mixing technologies, dedicated R&D infrastructure for product innovation and quality control, and a storage capacity of 7,200 metric tons, supported by four liquid storage tanks.

The contract is for the UAE's first methanol plant. (Image source: TA'ZIZ)

SAMSUNG E&A is set to construct the UAE’s first methanol plant in Al Ruwais Industrial City, Abu Dhabi

This follows the award of an engineering, procurement and construction (EPC) contract award worth US$1.7bn (AED6.2bn) from TA’ZIZ, the UAE’s chemicals and transition fuels ecosystem.

The project is in line with TA’ZIZ’s mission to advance the UAE’s economic diversification by unlocking new domestic chemical value chains. The 1.8 million tons per annum (mtpa) plant is set to be one of the world’s largest methanol plants, as well as one of the most energy-efficient, as on completion in 2028 it will be powered by clean energy from the grid.

Promising transition fuel

Methanol is a promising transition fuel, offering a cleaner alternative to conventional fuels such as coal and diesel for power generation. It also serves as an alternative to high-sulphur fuels used in marine transportation. Additionally, methanol is a key feedstock for a range of chemical derivatives, allowing the production of thousands of products including plastics, resins, pharmaceuticals and building materials.

TA’ZIZ, founded in 2020 as a joint venture between ADNOC and ADQ, is a manufacturing, industrial services, logistics and utilities ecosystem that drives, the production of chemicals value chains and transition fuels.In its initial phase, TA'ZIZ will produce 4.7 mtpa of chemicals by 2028, including methanol, low-carbon ammonia, polyvinyl chloride (PVC), ethylene dichloride, vinyl chloride monomer, and caustic soda. Several of these chemicals will be produced for the first time in the UAE, reinforcing TA’ZIZ’s strategic goal to expand the local chemicals value chain and advance economic diversification through industrialisation.

Mashal Saoud Al-Kindi, CEO of TA’ZIZ, said, “This landmark EPC contract award is a significant step in realizing TA’ZIZ’s vision to drive the UAE’s industrial growth by creating a world-scale integrated chemicals ecosystem in Al Dhafra region. The plant will enhance the UAE’s position as a leader in sustainable chemicals production and strengthen TA’ZIZ’s role in enabling ADNOC’s global ambition to lead the chemicals sector.”

SAMSUNG E&A will bring its successful experience of a recently completed methanol plant in Malaysia and will apply its unique execution system, involving modularisation and automation, to the project.

Hong Namkoong, president and CEO of SAMSUNG E&A, said, "SAMSUNG E&A is honoured to receive this recognition, highlighting TA’ZIZ’s and our commitment to driving industrial innovation, diversifying the UAE's economy, and enabling sustainable growth. We plan to actively leverage local resources and our network of partners based on our extensive regional experience in the Ruwais Industrial Complex, UAE. This milestone underscores the power of collaboration in creating world-scale facilities that will position the UAE as a global hub for advanced methanol production.”