Circular chemistry: chemical recycling and the petrochemical industry

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.