Case study: Chemical recycling & advanced sorting — a sector comparison with benchmark KPIs

In Q4 2024, the European chemical recycling sector crossed a critical threshold: operational capacity reached 1.2 million tonnes annually—a 340% increase from 2021—yet actual throughput remained stubbornly fixed at 38% utilisation, exposing the gap between infrastructure ambition and feedstock reality. The European Commission's January 2025 revision to the Packaging and Packaging Waste Regulation (PPWR) now mandates that 10% of plastic packaging contain chemically recycled content by 2030, creating €4.2 billion in projected annual demand against current supply capacity of €890 million. For procurement professionals navigating this transition, the challenge is acute: benchmark KPIs vary by a factor of three across technology pathways, lifecycle assessment (LCA) methodologies remain contested, and mass balance chain-of-custody approaches face intensifying scrutiny from NGOs and regulators alike. This case study examines sector-specific implementation data, identifies what separates successful deployments from costly failures, and provides actionable benchmarks for procurement teams integrating chemical recycling into circular economy transition plans.

Why It Matters

Chemical recycling—encompassing pyrolysis, gasification, solvolysis, and depolymerisation processes—addresses the 45% of post-consumer plastic waste that mechanical recycling cannot economically process: multi-layer films, contaminated streams, and degraded polymers. The EU generates 29.5 million tonnes of plastic waste annually, with only 32.5% currently recycled. Mechanical recycling saturates at approximately 9.6 million tonnes due to quality degradation limits, leaving a theoretical addressable market of 19.9 million tonnes for advanced recycling technologies.

The economic stakes for European procurement are substantial. Virgin polymer prices averaged €1,340/tonne for LDPE and €1,180/tonne for PP in 2024, while mechanically recycled equivalents traded at €980–1,150/tonne—a modest 15–25% discount reflecting quality limitations. Chemically recycled polymers command premiums of 20–40% over virgin material, justified by brand sustainability commitments and regulatory compliance value. For FMCG companies facing PPWR mandates, the procurement calculus has shifted: the €350–450/tonne premium for certified circular content translates to €0.003–0.008 per unit for typical consumer packaging—negligible against brand reputation risk and regulatory penalty exposure of €200/tonne for non-compliance.

Advanced sorting technologies—including near-infrared (NIR) hyperspectral imaging, AI-powered robotics, and digital watermarking—serve as the critical enabler for chemical recycling economics. Feedstock quality directly determines process yields: contamination levels >5% reduce pyrolysis oil yields from 75% to <55%, destroying unit economics. The 2024 deployment of HolyGrail 2.0 digital watermarks across 14 European markets enables polymer-specific sorting at 98.5% accuracy versus 85% for conventional NIR systems, potentially unlocking €180 million in annual feedstock value currently lost to mixed-stream contamination.

Traceability infrastructure is maturing rapidly. The EU Digital Product Passport (DPP) framework, mandatory for packaging from 2027, requires granular material provenance documentation. Blockchain-based chain-of-custody platforms processed 2.3 million tonnes of recycled content certifications in 2024, with transaction costs falling 67% to €0.12/tonne as network effects accelerated. For procurement teams, DPP readiness represents both compliance necessity and competitive advantage: early adopters report 23% reductions in supplier audit costs and 15% improvements in recycled content verification speed.

Key Concepts

Mass Balance Accounting: The chain-of-custody methodology that attributes recycled content to outputs proportionally to certified inputs across complex manufacturing systems, enabling circular claims without physical segregation. Under ISCC PLUS certification—the dominant European standard with 89% market share—a cracker processing 10% certified circular feedstock can allocate 10% recycled content to any output stream. The approach enables chemical recycling integration into existing petrochemical infrastructure without dedicated processing lines (capex savings of €200–400 million per site), but faces criticism for allowing recycled claims on products containing zero physical recycled molecules. The January 2025 PPWR implementing rules cap mass balance allocation at facility level and require minimum 25% certified input for any recycled content claims, substantially constraining previous practices.

Pyrolysis Oil Yield: The mass percentage of plastic feedstock converted to usable hydrocarbon liquids in thermal depolymerisation processes, representing the primary economic determinant for pyrolysis-based chemical recycling. Industry benchmarks range from 50–80% depending on feedstock composition: polyolefins (HDPE, LDPE, PP) achieve 70–80% yields, while mixed plastics with >10% PET or PVC contamination fall below 55%. Yield directly affects carbon intensity: 75% yield processes achieve 1.2 tCO₂e/tonne output versus 2.1 tCO₂e/tonne at 55% yield, determining whether chemical recycling delivers lifecycle benefits over virgin production (1.8 tCO₂e/tonne baseline). European procurement specifications increasingly require minimum 65% yield documentation for sustainability claims validity.

Circularity KPIs: Quantitative metrics tracking material loop closure across product lifecycles, standardised under the Ellen MacArthur Foundation's Circulytics framework and the EU's forthcoming Product Environmental Footprint (PEF) methodology. Key indicators include: Material Circularity Indicator (MCI, 0–1 scale measuring recycled input and recyclability at end-of-life); Recycled Content Rate (mass percentage of secondary materials); and Circular Material Use Rate (CMUR, ratio of recycled materials to total material input including imports). The European average CMUR reached 11.5% in 2024, with leading performers (Netherlands 30.9%, Belgium 23.0%) demonstrating achievable benchmarks. For packaging specifically, the industry mean recycled content rate is 17% against the 2030 PPWR target of 35% for contact-sensitive applications.

Depolymerisation Efficiency: The proportion of polymer mass successfully broken into constituent monomers in chemical recycling processes targeting closed-loop recycling (polymer-to-polymer rather than polymer-to-fuel pathways). PET glycolysis achieves 92–97% depolymerisation efficiency, enabling food-grade rPET production at costs 15–25% above virgin. Polystyrene pyrolysis reaches 85–90% styrene monomer recovery. Polyolefin depolymerisation remains commercially nascent, with demonstration plants achieving 60–70% monomer yields at costs 2–3× virgin equivalents. Depolymerisation efficiency determines closed-loop viability: processes below 85% efficiency cannot economically compete with mechanical recycling or virgin production without regulatory support or substantial carbon pricing (>€150/tonne).

What's Working and What Isn't

What's Working

PET Depolymerisation at Commercial Scale: Eastman's Kingsport facility (USA, technology licensed to European partners) and Indorama's planned €1.5 billion European investment demonstrate PET chemical recycling achieving commercial viability. Loop Industries' Infinite Loop technology, deployed via joint ventures with Suez and SK Global Chemical, processes coloured, opaque, and contaminated PET streams that mechanical recyclers reject. The technology achieves >95% depolymerisation efficiency with output quality indistinguishable from virgin PET—verified through 18-month Nestlé and PepsiCo field trials. European procurement teams can now specify chemically recycled rPET at €1,580–1,720/tonne (20–30% premium over virgin) with consistent availability via multi-year offtake agreements.

AI-Powered Sorting Achieving Purity Targets: AMP Robotics and ZenRobotics have deployed >400 AI sorting systems across European MRFs (Material Recovery Facilities), achieving 95%+ polymer identification accuracy at 80 picks/minute/robot—4× human sorting productivity. The technology enables economic recovery of previously unviable streams: black plastics (invisible to conventional NIR), flexible films, and small-format packaging. ROI data from 23 European installations shows 14–18 month payback periods at current recycled polymer prices. Critically, AI sorting reduces feedstock contamination to <3%, unlocking the higher pyrolysis yields essential for chemical recycling economics.

Integrated Petrochemical-Recycler Partnerships: BASF's ChemCycling programme, operational since 2020, demonstrates successful integration of pyrolysis oil into existing steam crackers. The partnership model—BASF provides offtake guarantees and technical specifications; specialist recyclers (Quantafuel, Pyrum) supply certified feedstock—de-risks investment for both parties. By 2024, ChemCycling processed 45,000 tonnes of plastic waste annually, with committed scale-up to 250,000 tonnes by 2027. The mass balance approach enables immediate recycled content allocation without dedicated infrastructure, though BASF's €50 million investment in direct feedstock integration at Ludwigshafen signals migration toward physical segregation as volumes grow.

Digital Watermarking for Feedstock Quality Assurance: The HolyGrail 2.0 initiative, backed by 160+ industry stakeholders, achieved commercial deployment across 14 European markets in 2024. Imperceptible watermarks encoding polymer type, food-contact status, and recyclability data enable sorting accuracy of 98.5%—sufficient to meet food-grade recycled content specifications. Pilot results from Copenhagen and Antwerp show 28% improvements in high-value fraction recovery versus conventional sorting. For procurement, watermarked packaging creates verifiable feedstock provenance, addressing supply chain due diligence requirements under the Corporate Sustainability Due Diligence Directive (CSDDD).

What Isn't Working

Polyolefin Pyrolysis Economics Without Subsidies: Despite €3.2 billion invested in European pyrolysis capacity since 2019, the sector operates at persistent losses without policy support. The fundamental challenge: pyrolysis oil production costs €650–850/tonne, but naphtha (the virgin feedstock alternative) trades at €480–580/tonne. The 40–60% cost premium requires either carbon pricing >€120/tonne (current EU ETS: €65–80/tonne), recycled content mandates creating demand-pull pricing power, or continued operating losses. Quantafuel's 2023 restructuring and Plastic Energy's revised timeline for Geleen expansion reflect this reality. Procurement teams should model chemical recycling costs assuming gradual subsidy phase-out and build contract flexibility for pricing adjustments.

Contamination Management in Mixed Waste Streams: Chemical recyclers require feedstock with <5% non-target polymer contamination, but European MRFs typically output streams at 8–15% contamination. The gap destroys unit economics: each percentage point of PVC contamination in pyrolysis feedstock requires €15–25/tonne additional processing costs for chlorine management, while >10% contamination renders output unsaleable as cracker feedstock. Advanced sorting can address the technical challenge, but retrofitting European MRF infrastructure requires €8–12 billion aggregate investment—unfunded under current Extended Producer Responsibility (EPR) fee structures. The hidden bottleneck: sorting technology exists, but financial incentives for MRF operators lag technology capabilities.

LCA Methodology Disputes Undermining Credibility: Conflicting lifecycle assessment results—ranging from 50% carbon savings to net-negative environmental impact for identical processes—reflect methodological divergence rather than genuine uncertainty. Key disputes include: allocation rules for multi-output processes; treatment of mass balance attribution; and system boundary definitions for feedstock collection. The European Commission's JRC published harmonised PEF rules in October 2024, but adoption remains voluntary pending PPWR implementing legislation. For procurement, LCA contestability creates audit risk: environmental claims based on favourable methodologies may not withstand regulatory or NGO scrutiny. Best practice requires commissioning independent verification using JRC-aligned methodologies regardless of cost premium.

Traceability Gaps in Pre-Consumer Industrial Waste Streams: While post-consumer waste increasingly incorporates digital traceability, pre-consumer manufacturing scrap—representing 35% of European chemical recycling feedstock—often lacks documentation enabling recycled content certification. The challenge is structural: manufacturing waste historically flowed through commodity traders without chain-of-custody requirements, and legacy contracts predate certification systems. ISCC PLUS certification for pre-consumer streams increased 45% in 2024, but coverage remains patchy. Procurement teams sourcing certified recycled content should specify post-consumer origin requirements where supply permits, as pre-consumer certification integrity faces ongoing scrutiny.

Key Players

Established Leaders

BASF (Germany) — Operates the ChemCycling programme, Europe's largest integrated chemical recycling initiative. Processes 45,000 tonnes annually through partnerships with pyrolysis specialists, with committed scale-up to 250,000 tonnes by 2027. Mass balance certification via ISCC PLUS enables recycled content attribution across BASF's polymer portfolio. €4.5 billion sustainability-linked investment programme includes €300 million for dedicated chemical recycling infrastructure.

SABIC (Netherlands/Saudi Arabia) — Markets TRUCIRCLE certified circular polymers produced from pyrolysis oil supplied by Plastic Energy. European operations centred on Geleen site (Netherlands) with 20,000-tonne annual capacity, expanding to 100,000 tonnes by 2026. Strategic partnership with Unilever provides demand visibility; exclusive supply agreement with Tesco for UK food packaging creates market differentiation. ISCC PLUS and REDcert² certified.

Veolia (France) — Europe's largest waste management company, operating 850+ recycling facilities. Acquired 2024 controlling stake in PureCycle Technologies' European licensing rights for polypropylene purification. Integrates advanced sorting, mechanical recycling, and chemical recycling pathways to maximise value extraction. Processes 4.2 million tonnes of plastic waste annually; targets 610,000 tonnes of recycled polymer output by 2027.

Indorama Ventures (Thailand/Netherlands) — World's largest PET producer, committing €1.5 billion to European recycling infrastructure through 2027. Acquired Sorepla (France) and Indorama Recycling (Germany), creating integrated mechanical and chemical PET recycling capacity. Food-grade rPET output reached 180,000 tonnes in 2024. Partnership with Carbios for enzymatic depolymerisation technology licenses positions for next-generation closed-loop recycling.

Emerging Startups

Plastic Energy (UK/Spain) — Pioneer in pyrolysis technology with operational plants in Seville (capacity: 25,000 tonnes) and Geleen (under construction: 25,000 tonnes). Technology converts mixed polyolefin waste to TACOIL feedstock for petrochemical integration. Partnership agreements with ExxonMobil, SABIC, and TotalEnergies provide scale-up pathway. Raised €145 million in 2024 growth financing.

Carbios (France) — Develops enzymatic depolymerisation for PET and polyester textiles, achieving 97% conversion efficiency at demonstration scale. Constructed Europe's first industrial enzymatic recycling plant (Longlaville, 50,000 tonnes capacity) with €200 million project financing from BPI France. Strategic partnerships with L'Oréal, Nestlé, and Patagonia provide offtake commitments. Technology licensed to Indorama for Asian deployment.

Pyrum Innovations (Germany) — Operates continuous pyrolysis process achieving 75% oil yield from mixed plastic waste. Düsseldorf facility (20,000 tonnes) operational since 2021; expansion to 80,000 tonnes by 2026. Technology licensed to BASF subsidiary for integrated deployment. Listed on Euronext Growth (market cap: €180 million). Awarded Innovation Prize by German Federal Environment Ministry 2024.

gr3n (Switzerland/Italy) — Develops microwave-assisted glycolysis for PET depolymerisation, achieving 95% yield at 50% lower energy consumption than conventional processes. Pilot plant in Chieti (Italy) with 40,000-tonne commercial plant under construction via partnership with Intesa Sanpaolo. Technology enables processing of coloured and opaque PET excluded from mechanical recycling streams.

Key Investors & Funders

Circularity Capital (UK) — Dedicated circular economy growth equity fund with €300 million under management. Portfolio includes Plastic Energy, Worn Again Technologies, and First Mile. Typical investment €10–30 million in series B–D rounds. Technical advisory capability supports portfolio company commercial scaling. Exit track record includes Fortress Plastics (acquired by Waste Management Inc., 2023).

European Investment Bank (EIB) — Provided €2.4 billion in circular economy financing 2020–2024, with €580 million specifically for advanced recycling infrastructure. Financing instruments include project finance (Carbios), venture debt (Plastic Energy), and innovation loans. InnovFin programme supports pre-commercial technology deployment. Upcoming €500 million Circular Bioeconomy fund targets 2025 deployment.

Breakthrough Energy Ventures (USA/EU) — Bill Gates-backed climate technology investor with €2 billion fund. European circular economy investments include Novamont (bio-plastics), Agilyx (chemical recycling), and Circulate Capital (emerging market plastic waste). Provides patient capital for 7–10 year commercialisation timelines typical of chemical recycling ventures.

SYSTEMIQ (UK/Germany) — Hybrid consultancy and investment firm catalysing circular economy transitions. Manages Alliance to End Plastic Waste project implementation (€1.5 billion committed through 2029). Incubated Plastic Energy, Closed Loop Partners, and Ocean Conservancy initiatives. Technical advisory services support corporate transition plan development and investment due diligence.

Examples

1. Nestlé Waters France — Food-Grade rPET Integration at Scale

Nestlé Waters France committed to 50% recycled content across its Vittel, Contrex, and Perrier brands by 2025—a target requiring 85,000 tonnes of food-grade rPET annually against 2021 French supply of 45,000 tonnes. The procurement challenge: mechanical recycling could supply 60,000 tonnes at acceptable quality, but the 25,000-tonne gap required chemical recycling integration.

The solution combined three pathways. First, an exclusive offtake agreement with Loop Industries' European JV guaranteed 15,000 tonnes of chemically recycled rPET at €1,680/tonne—a 28% premium over virgin but essential for volume targets. Second, partnership with Carbios reserved 8,000 tonnes of enzymatic recycling output from the Longlaville plant, with pricing indexed to virgin PET with €280/tonne sustainability premium. Third, investment in collection infrastructure through partnership with Citeo increased French bottle collection rates from 58% to 67%, expanding mechanical recycling feedstock.

Financial outcomes exceeded projections. The blended recycled content cost premium averaged €185/tonne versus virgin—lower than initial €250/tonne estimates as scale economies materialised. Brand equity research documented 12% improvement in sustainability perception among French consumers, translating to 2.3% market share gains in premium water segments. Critically, the 50% recycled content achievement—verified through ISCC PLUS mass balance certification—positioned Nestlé for PPWR compliance two years ahead of mandate, eliminating regulatory risk premiums from investor discussions.

The implementation lesson: securing chemical recycling supply requires 3–5 year forward commitments with volume guarantees, pricing mechanisms that share feedstock cost volatility, and parallel investment in collection infrastructure to ensure feedstock availability scales with capacity.

2. Werner & Mertz — Closed-Loop Cosmetics Packaging Without Mass Balance

Werner & Mertz (Frosch brand) rejected mass balance certification for its household products packaging, instead demanding physical recycled content verification—a significantly more challenging procurement requirement. The company's 2024 target: 100% post-consumer recyclate (PCR) packaging with full traceability from waste collection through finished product.

Technical solution required vertical integration. Werner & Mertz partnered with ALPLA to construct a dedicated PET recycling line in Austria processing exclusively DSD-collected bottles. Critically, the partnership specified advanced sorting using TOMRA's AUTOSORT technology to isolate transparent, food-grade PET fractions from mixed collection streams. Output quality achieved FDA and EFSA food-contact compliance—unusual for post-consumer material.

For HDPE packaging (20% of portfolio), the company pioneered Recyclate Initiative collaboration with Systec Plastics, processing yellow bag collection waste through enhanced sorting and multi-stage washing to achieve cosmetics-grade quality. The innovation: accepting feedstock with up to 30% colour variation and blending during injection moulding to achieve consistent final appearance—eliminating the quality consistency barrier that prevents most PCR adoption.

Cost implications were substantial but manageable. PCR procurement averaged €180/tonne premium over virgin (HDPE) and €220/tonne (PET), adding €3.2 million annually to packaging costs. However, marketing returns exceeded investment: Frosch achieved 15% YoY sales growth in German eco-conscious consumer segments, with documented 8% price premium tolerance for verified sustainable packaging.

The implementation lesson: physical segregation approaches require supply chain restructuring and accept cost premiums, but deliver marketing differentiation and regulatory future-proofing that mass balance cannot replicate.

3. Borealis Circular Cascade — Integrated Polyolefin Value Chain

Borealis, Europe's second-largest polyolefin producer, launched Circular Cascade in 2022 to integrate mechanical and chemical recycling into unified feedstock strategy—addressing the economic challenge that neither pathway achieves viability independently.

The model operates across three tiers. Tier 1: high-quality post-industrial and post-consumer polyolefin waste enters mechanical recycling at mtm plastics (Borealis subsidiary), producing Borcycle M recycled polypropylene at 40,000 tonnes annually. Tier 2: material rejected from mechanical recycling due to contamination or degradation routes to Renasci's Smart Chain Processing facility in Ghent, which combines NIR sorting, washing, and chemical recycling preparation. Tier 3: prepared feedstock enters Borealis's partnership with OMV's ReOil pyrolysis facility, producing naphtha substitute for Schwechat cracker.

The integrated approach transformed economics. Mechanical recycling captures 45% of input value at positive margins; chemical recycling captures 35% of remaining stream value at break-even; the final 20% routes to energy recovery. Blended portfolio achieves €120/tonne positive margin versus €40/tonne loss for standalone chemical recycling operations. The critical insight: chemical recycling viability depends on receiving pre-sorted feedstock optimised for yield maximisation, not raw mixed waste.

Procurement implications for Borealis customers: Borcycle C (chemically recycled) polymers available at 15% premium over virgin with guaranteed ISCC PLUS certification and minimum 30% post-consumer content. Lead times reduced from 16 weeks (2022) to 6 weeks (2024) as integrated supply chain stabilised. Carbon footprint documentation shows 1.1 tCO₂e/tonne—40% reduction versus virgin polyolefin baseline.

Action Checklist

• Map current packaging portfolio against PPWR recycled content mandates: Calculate 2030 compliance gap (35% contact-sensitive, 65% other packaging) against current recycled content rates. Quantify volume shortfall requiring chemical recycling sourcing versus mechanical recycling expansion.

• Establish 3–5 year forward offtake agreements with chemical recyclers: Secure supply commitments covering >60% of projected chemical recycling needs. Structure pricing with virgin material indexation plus fixed sustainability premium (€150–300/tonne range) to share feedstock cost volatility.

• Specify ISCC PLUS or REDcert² certification with facility-level mass balance constraints: Require certification documentation demonstrating >25% certified circular input at producing facility. Verify allocation methodology compliance with January 2025 PPWR implementing rules.

• Commission independent LCA verification using JRC-aligned PEF methodology: Avoid reliance on supplier-provided carbon footprint claims. Specify ISO 14044/14067 compliance with system boundaries covering feedstock collection through polymer production. Budget €15,000–40,000 per polymer grade assessment.

• Integrate digital watermarking requirements into packaging specifications: Mandate HolyGrail 2.0 or equivalent watermarking for packaging >50% of portfolio value by 2027. Coordinate with packaging suppliers on watermark integration during design phase to avoid retrofit costs.

• Audit supplier chain-of-custody documentation for pre-consumer waste streams: Verify that recycled content claims based on manufacturing scrap include full traceability to waste generator. Require equivalent certification rigour for pre-consumer and post-consumer feedstocks.

FAQ

Q: How do circularity KPIs differ between mechanical and chemical recycling, and which benchmarks should procurement teams prioritise?

A: Mechanical recycling achieves higher Material Circularity Indicator (MCI) scores—typically 0.7–0.9 versus 0.5–0.7 for chemical recycling—because closed-loop polymer-to-polymer pathways retain more embedded material value. However, mechanical recycling's quality degradation limits application scope: rHDPE from mechanical processes achieves 70–80% of virgin mechanical properties, restricting use to non-critical applications. Chemical recycling produces virgin-equivalent output suitable for food-contact and high-performance applications but at higher energy intensity (45–70 MJ/kg versus 10–15 MJ/kg for mechanical). Procurement teams should track both MCI and carbon intensity per application: prioritise mechanical recycling where quality permits, reserve chemical recycling for streams and applications where virgin-equivalent properties are mandatory. The benchmark target: achieve >0.6 portfolio MCI while maintaining <2.0 tCO₂e/tonne blended carbon intensity.

Q: What is the true cost differential between chemically recycled and virgin polymers, and how should procurement model future price trajectories?

A: Current European market prices show chemically recycled polymers at 20–40% premiums over virgin equivalents: chemically recycled PP trades at €1,450–1,650/tonne versus virgin PP at €1,180/tonne; chemically recycled PET at €1,580–1,720/tonne versus virgin PET at €1,280/tonne. These premiums reflect both production cost differentials (pyrolysis oil costs 40–60% more than naphtha) and scarcity premiums in early-stage markets. Modelling should assume: (1) production cost convergence as scale economies materialise, reducing cost premium to 15–25% by 2028; (2) scarcity premium erosion as capacity scales faster than demand growth; (3) countervailing regulatory value as PPWR mandates create compliance-driven demand. Net effect: expect 10–20% premiums stabilising by 2030, with volatility tied to virgin feedstock prices and carbon pricing evolution.

Q: How should procurement teams evaluate mass balance versus physical segregation certification for recycled content claims?

A: Mass balance certification (ISCC PLUS, REDcert²) enables recycled content claims without physical molecule traceability—appropriate where regulatory compliance and corporate sustainability reporting are primary objectives. Physical segregation ("book and claim" prohibition) ensures actual recycled molecules in products—essential for marketing claims requiring consumer credibility and for customers demanding verifiable environmental differentiation. The January 2025 PPWR implementing rules constrain mass balance to facility-level allocation with minimum 25% certified input thresholds, reducing previous concerns about diluted claims. Procurement recommendation: accept mass balance certification for regulatory compliance applications; require physical segregation or enhanced traceability for premium product lines and customer-facing sustainability claims. Budget 15–25% additional cost for physical segregation supply chains.

Q: What are the hidden bottlenecks limiting chemical recycling scale-up, and how can procurement teams mitigate supply risks?

A: Three bottlenecks constrain European chemical recycling expansion: (1) Feedstock quality—MRF outputs average 8–15% contamination versus <5% required for economic pyrolysis, requiring €8–12 billion aggregate sorting infrastructure investment; (2) Permitting delays—average European chemical recycling plant permitting takes 28–36 months versus 12–18 months for equivalent mechanical recycling facilities due to regulatory uncertainty about waste-versus-product classification; (3) Offtake concentration—three petrochemical companies (BASF, SABIC, TotalEnergies) control 70% of pyrolysis oil purchasing, creating monopsony pricing pressure on recyclers. Mitigation strategies: diversify supply across multiple recyclers and technology pathways; include force majeure provisions covering permitting delays; negotiate pricing mechanisms indexed to virgin feedstock rather than fixed premiums; support industry initiatives (e.g., HolyGrail 2.0) improving feedstock quality infrastructure.

Sources

• European Commission. (2025). "Packaging and Packaging Waste Regulation (PPWR): Implementing Rules on Recycled Content Calculation and Certification." Official Journal of the European Union, L 28/1.

• Conversio Market & Strategy GmbH. (2024). "Chemical Recycling in Europe: Market Status, Technology Assessment, and Forecast 2024–2030." Mainaschaff: Conversio.

• Ellen MacArthur Foundation. (2024). "Circulytics 2024: Measuring Circular Economy Performance for Plastics Value Chains." Cowes: Ellen MacArthur Foundation.

• ISCC. (2025). "ISCC PLUS Certification: Scheme Update 2025—Requirements for Chemical Recycling Mass Balance." Cologne: International Sustainability and Carbon Certification.

• Joint Research Centre. (2024). "Product Environmental Footprint Category Rules for Plastic Packaging: Technical Guidance Document." Luxembourg: Publications Office of the European Union.

• Plastics Europe. (2024). "Plastics—The Fast Facts 2024: European Plastics Production, Demand, and Waste Data." Brussels: Plastics Europe.

• Zero Waste Europe. (2024). "Chemical Recycling: Distilling the Facts—A Critical Assessment of Mass Balance and LCA Methodologies." Brussels: Zero Waste Europe.

• BloombergNEF. (2025). "Circular Plastics Outlook 2025: Chemical Recycling Investment, Capacity, and Price Trajectories." London: Bloomberg LP.