Explainer: Polymers, plastics & circular chemistry — the concepts, the economics, and the decision checklist

Of the approximately 400 million metric tonnes of plastic produced globally each year, less than 9% enters a genuine circular pathway—and by 2025, more than 70% of the world's mismanaged plastic waste will originate from the Asia-Pacific region. This stark reality frames one of the defining industrial challenges of our era: transforming linear polymer value chains into economically viable circular systems while navigating a labyrinth of technical constraints, misaligned stakeholder incentives, and infrastructure deficits that often remain invisible until projects reach commercial scale.

Why It Matters

The Asia-Pacific recycled plastics market reached USD 30.2–33.8 billion in 2024 and is projected to exceed USD 72 billion by 2034, reflecting compound annual growth rates between 8.2% and 10.1%. This trajectory is propelled by regulatory mandates—India's Extended Producer Responsibility (EPR) framework now requires 30% recycled content in packaging by 2025–26, escalating to 60% by 2028–29, while Vietnam targets 85% packaging recycling by 2030. China's domestic recycling capacity has expanded rapidly following its 2018 ban on plastic waste imports, and Thailand and Indonesia are implementing binding recycled-content thresholds that increase annually.

Yet these headline figures obscure the implementation gap. Mechanical recycling, which accounts for approximately 70% of current processing capacity, struggles with contaminated or multi-layer packaging streams that represent the fastest-growing plastic waste categories. Chemical recycling technologies—pyrolysis, depolymerization, and solvolysis—offer pathways for these difficult feedstocks, but the Asia-Pacific chemical recycling market stood at only USD 4.5 billion in 2023, projected to reach USD 6.4 billion by 2030 at a 5.2% CAGR. The gap between regulatory ambition and processing capability creates both urgent market opportunities and significant execution risks for organisations entering this space.

The macroeconomic stakes are substantial. McKinsey estimates a USD 50–75 billion economic opportunity in plastic recycling by 2035, with up to USD 50 billion in investment required across advanced and mechanical recycling infrastructure plus feedstock supply networks by 2030. For Asia-Pacific markets specifically, where the region accounts for 48–60% of global recycled plastics market share, the strategic imperative extends beyond environmental compliance to supply chain resilience and competitive positioning in an increasingly carbon-constrained global trade environment.

Key Concepts

Polymers and Plastics: Polymers are large molecules composed of repeating structural units (monomers) linked through covalent bonds. Plastics are polymer-based materials formulated with additives—stabilizers, plasticizers, colorants, and flame retardants—that modify performance characteristics. The distinction matters for circularity because while base polymers like polyethylene terephthalate (PET) or polyethylene (PE) can theoretically be recycled infinitely, the additive packages complicate separation and reprocessing, often degrading material properties with each cycle.

CAPEX (Capital Expenditure): The upfront investment required for recycling infrastructure—sorting facilities, mechanical reprocessing lines, or chemical recycling plants. Chemical recycling facilities typically require USD 50–200 million in capital expenditure for commercial-scale operations, with payback periods extending 7–12 years depending on feedstock costs, technology maturity, and offtake agreement structures. This capital intensity exceeds traditional venture capital timelines, necessitating blended finance models combining public grants, strategic corporate investment, and patient private capital.

Traceability: The capacity to track materials through value chains from production through consumption and recovery. Digital product passports, mandated by the European Union from 2026 and increasingly referenced in Asia-Pacific policy frameworks, require granular data on material composition, recycled content percentages, and chain-of-custody verification. Traceability infrastructure—blockchain systems, QR coding, and near-infrared sorting technologies—represents a critical enabler for premium pricing of certified circular materials.

Compliance and Extended Producer Responsibility (EPR): Regulatory frameworks that shift end-of-life management costs from municipalities to producers. EPR schemes in India, South Korea, Japan, and increasingly across ASEAN nations create financial incentives for design-for-recyclability and establish collection infrastructure funding mechanisms. Non-compliance penalties and reputational risks are driving corporate procurement shifts toward recycled content, but compliance verification remains challenging given fragmented waste management value chains.

Unit Economics: The per-unit profitability calculation comparing virgin polymer costs against recycled alternatives, accounting for collection, sorting, processing, and quality premiums. Virgin plastics remain cheaper than recycled alternatives when crude oil prices fall below USD 60–70 per barrel, creating market volatility that undermines recycling business models. Recycled resin premiums have increased up to 150% for some polymer grades where supply constraints meet brand sustainability commitments, but these premiums are not uniform across polymer types or geographies.

Electrochemistry and Advanced Recycling: Electrochemical processes use electrical energy to drive chemical transformations, enabling selective bond breaking in polymer chains under milder conditions than thermal decomposition. In circular chemistry applications, electrochemical depolymerization can recover monomers from PET, polyurethanes, and other condensation polymers with lower energy inputs than conventional chemical recycling, though commercial-scale deployment remains limited. These technologies represent the frontier of circular chemistry innovation, with significant R&D investment flowing into catalyst development and process intensification.

What's Working and What Isn't

What's Working

Corporate-Startup Partnerships for Feedstock Security: Major chemical companies are forming structured offtake agreements with recycling technology developers to secure circular feedstock supplies. The Dow and SCG Chemicals partnership targets 200,000 metric tonnes per year of recycled plastics processing across Asia-Pacific by 2030, integrating advanced and mechanical recycling with collection infrastructure. These partnerships de-risk capital-intensive projects by guaranteeing demand while providing startups with credibility for additional financing.

EPR-Driven Collection Infrastructure in South Korea and Japan: South Korea's advanced waste segregation systems and Japan's container deposit schemes have achieved collection rates exceeding 80% for PET bottles, creating reliable feedstock for mechanical recyclers. Japan processes approximately 80% of municipal solid waste through waste-to-energy facilities with integrated materials recovery, while South Korea's district heating networks utilize refuse-derived fuel streams. These mature systems demonstrate that regulatory design combined with municipal infrastructure investment can establish viable collection economics.

Pyrolysis Oil Integration into Existing Petrochemical Assets: Chemical recycling via pyrolysis produces synthetic crude oil that can feed existing steam crackers, avoiding the need for purpose-built polymer production facilities. Shell Singapore's partnership with Corsair Group International for pyrolysis oil supply from Thailand represents this integration model—converting household plastic waste into ISCC-certified circular feedstock that enters conventional petrochemical value chains. This approach leverages stranded assets and existing operational expertise rather than requiring greenfield investments.

What Isn't Working

Inconsistent Feedstock Quality and Contamination: Mixed plastic waste streams contain varying polymer types, additives, and contaminants that degrade recycled material properties. Despite investments in AI-enabled sorting and near-infrared spectroscopy, contamination levels in post-consumer recycled (PCR) streams regularly exceed specifications for food-contact applications. This quality variability creates processing inefficiencies, downcycling rather than true circularity, and undermines the economic case for virgin polymer substitution in demanding applications.

Infrastructure Gaps in ASEAN Collection Systems: While headline recycling targets are ambitious, collection infrastructure across Indonesia, Philippines, Vietnam, and Thailand remains fragmented. Informal waste picker networks—which handle 50–80% of recyclable collection in many Southeast Asian cities—lack integration with formal recycling systems, creating leakage and quality degradation. Municipalities lack capital for modern materials recovery facilities, and private sector investment is deterred by uncertain feedstock volumes and quality.

Cost Competitiveness Against Virgin Plastics: The fundamental economics remain challenging. Virgin polyethylene and polypropylene prices fluctuate with crude oil markets, while recycled alternatives carry higher processing costs and lower economies of scale. When oil prices dropped during 2020 and recovered unevenly thereafter, recycled plastic producers faced margin compression that rendered some facilities uneconomic. Without sustained carbon pricing or mandated recycled content floors, market-based incentives alone cannot close the cost gap for commodity-grade polymers.

Key Players

Established Leaders

Indorama Ventures (Thailand): The world's largest producer of recycled PET (rPET), with integrated operations across Asia, Europe, and the Americas. Operates multiple bottle-to-bottle recycling facilities and has committed to processing 1.5 million tonnes of PET annually by 2025.

Veolia Environment S.A. (France/Global): Major operator of plastics recycling infrastructure across Asia-Pacific, including PET and HDPE processing facilities in China, Singapore, and Australia. Provides integrated waste management services combining collection, sorting, and reprocessing.

SK Chemicals (South Korea): Leading producer of chemically recycled PET and bio-based polyesters. Operates depolymerization facilities that convert post-consumer PET back to monomers for food-grade repolymerization.

Alpek S.A.B. de C.V. (Mexico/Global): Major PET producer with integrated recycling operations, operating bottle-to-bottle facilities serving beverage industry clients across Asia-Pacific markets.

MBA Polymers (Austria/China/India): Specializes in recovery of engineering plastics (ABS, HIPS, PC/ABS) from end-of-life electronics and automotive shredder residue. Operates commercial-scale facilities in China and India.

Emerging Startups

Corsair Group International (Thailand/Netherlands): Founded in 2020, operates pyrolysis facilities in Bangkok converting household plastic waste to ISCC-certified pyrolysis oil. Secured partnerships with Shell Singapore and Kera Energy for global distribution. Expanding capacity from 120,000 to 600,000+ liters monthly.

Waste4Change (Indonesia): Integrated waste management startup managing 8,000+ metric tonnes annually. Raised USD 5 million Series A co-led by AC Ventures and PT Barito Mitra Investama to expand collection and sorting infrastructure.

RWDC Industries (Singapore): Develops biodegradable plastic alternatives using polyhydroxyalkanoate (PHA) biopolymers. Backed by Temasek, Vickers Venture Partners, and FootPrint Coalition.

Novoloop (USA/India): Developed Lifecycling technology converting post-consumer polyethylene into high-performance polyols and polyurethanes. Raised USD 21 million Series B in 2025 led by Taranis, with operational facility in India.

DePoly (Switzerland): Chemical recycling technology for PET using room-temperature depolymerization. Raised USD 41.1 million and pursuing commercial-scale deployment with applications across Asia-Pacific.

Key Investors & Funders

Circulate Capital (Singapore): Dedicated plastic circularity investor focused on South and Southeast Asia. Led aevoloop's €8 million round in 2025 and maintains portfolio across collection, sorting, and advanced recycling technologies.

Infinity Recycling Circular Plastics Fund (Netherlands): Closed above €175 million target in 2024, backed by European Investment Fund. Focuses on scaling advanced recycling technologies with Article 9 impact fund classification.

Closed Loop Partners (USA): Circular Plastics Fund exceeds USD 45 million with investors including Chevron Phillips Chemical and Charter Next Generation. Invests across recycling infrastructure and technology development.

Breakthrough Energy Ventures (USA): Climate-focused venture fund backed by Bill Gates and consortium of investors. Portfolio includes MacroCycle (USD 6.5 million, 2025) and other circular chemistry startups.

Temasek Holdings (Singapore): Singapore sovereign wealth fund with strategic investments across circular economy infrastructure, including RWDC Industries and multiple waste management technology companies.

Examples

1. Dow-SCG Chemicals Circular Plastics Hub (Thailand)

Dow Chemical and SCG Chemicals established a partnership targeting 200,000 metric tonnes per year of recycled plastics processing across Asia-Pacific by 2030. The initiative integrates mechanical and advanced recycling with collection infrastructure across Thailand and neighboring markets. Phase 1 operations commenced in 2024 with initial capacity of 50,000 tonnes annually, processing post-industrial and post-consumer polyethylene streams. The partnership leverages SCG's regional distribution network and Dow's polymer technology expertise, with offtake agreements securing demand from packaging customers committed to recycled content targets.

2. India Plastics Pact Implementation

Launched in 2021, the India Plastics Pact brings together 100+ stakeholders—brands, retailers, recyclers, and government agencies—toward circular packaging targets. By 2024, participating organizations had eliminated 15% of problematic plastic packaging by redesign, increased post-consumer recycled content to 18% on average (from baseline <5%), and established collection infrastructure reaching 12 million households in tier-1 and tier-2 cities. The Pact coordinates with India's EPR framework, helping members navigate compliance requirements while building domestic recycling capacity. Challenges remain in informal sector integration and rural collection economics.

3. Corsair Group Thailand-Shell Pyrolysis Oil Supply

Corsair Group International's Bangkok facility converts mixed household plastic waste—including flexible films and multi-layer packaging unsuitable for mechanical recycling—into ISCC-certified pyrolysis oil. The February 2024 agreement with Shell Singapore Pte Ltd established offtake for circular naphtha feedstock, subsequently integrated into Shell's Jurong Island petrochemical complex for certified-circular polymer production. The arrangement demonstrates viable economics for advanced recycling: Corsair operates profitably without government subsidies by securing premium pricing for certified circular feedstock, while Shell meets sustainability commitments without stranded asset risk in purpose-built recycling facilities.

Action Checklist

• Conduct feedstock availability assessment: Map plastic waste streams accessible within 200km radius, evaluating polymer composition, contamination levels, and collection infrastructure maturity before committing to processing technology selection.

• Model unit economics across oil price scenarios: Stress-test recycling business cases against crude oil prices ranging from USD 40–120 per barrel to understand margin sensitivity and identify break-even thresholds requiring policy support.

• Engage informal sector stakeholders early: In markets with established waste picker networks, design collection systems that formalize relationships rather than displace existing actors, improving feedstock reliability while maintaining social license.

• Secure offtake agreements before final investment decisions: Lock in customer commitments for recycled material volumes and price premiums before committing CAPEX, reducing demand risk and improving financing terms.

• Build traceability infrastructure from project inception: Implement chain-of-custody documentation systems compatible with emerging digital product passport requirements, avoiding costly retrofits as regulations tighten.

• Evaluate EPR credit mechanisms across target markets: Understand producer responsibility obligations and credit trading systems in each jurisdiction, identifying arbitrage opportunities and compliance cost exposures.

• Develop blended finance structures for capital-intensive projects: Combine concessional development finance, strategic corporate investment, and commercial debt to achieve weighted average cost of capital compatible with recycling project returns.

• Establish polymer-specific quality specifications: Define acceptable contamination thresholds, additive restrictions, and performance parameters in supply contracts to avoid disputes and processing inefficiencies.

• Plan for technology evolution and retrofitting: Chemical recycling technologies are advancing rapidly; build optionality into facility designs for process intensification and capacity expansion as economics improve.

• Monitor regulatory developments across ASEAN and beyond: Track policy evolution in key markets including Indonesia's emerging EPR framework, Vietnam's packaging targets, and potential harmonization efforts through ASEAN environmental cooperation mechanisms.

FAQ

Q: Why is chemical recycling controversial despite its potential for difficult-to-recycle plastics?

A: Chemical recycling technologies—particularly pyrolysis—face criticism on three grounds. First, energy intensity: thermal decomposition requires significant heat inputs, often from natural gas, undermining lifecycle carbon benefits unless powered by renewable energy. Second, yield concerns: commercial pyrolysis facilities typically achieve 50–70% conversion of plastic feedstock to usable products, with the remainder becoming char, wax, or process losses. Third, definitional disputes: critics argue that converting plastics to fuel (which is combusted) rather than back to polymers represents downcycling rather than true circularity. Proponents counter that chemical recycling addresses waste streams with no alternative pathway, and that technology improvements are steadily improving yields and energy efficiency. The debate reflects genuine trade-offs rather than clear right answers.

Q: How do recycled content mandates affect virgin polymer producers in Asia-Pacific?

A: Virgin polymer producers face strategic choices as recycled content mandates proliferate. Some—like Indorama Ventures and SK Chemicals—have integrated recycling operations, positioning recycled material as a premium product line while maintaining virgin production for applications where recycled alternatives cannot meet specifications. Others are acquiring recycling technology companies or forming partnerships to secure circular feedstock access. The structural shift creates competitive pressure on producers lacking circular capabilities, particularly for commodity-grade packaging polymers where brand customers face compliance obligations. However, engineering plastics for automotive, electronics, and construction applications face less immediate pressure given lower recycled content availability and more demanding performance requirements.

Q: What role does electrochemistry play in next-generation circular plastics?

A: Electrochemical approaches offer potential advantages over thermal chemical recycling: selective bond breaking at ambient temperatures, compatibility with renewable electricity inputs, and finer control over reaction products. Current applications focus on depolymerizing condensation polymers like PET and polyurethanes, where electrochemical reduction can cleave ester or urethane linkages to recover monomers. Research groups are developing electrocatalysts for polyolefin degradation, though these remain at laboratory scale. Commercialization timelines extend 5–10 years for most electrochemical recycling technologies, with capital intensity and catalyst durability representing key barriers. The technology trajectory suggests electrochemistry will complement rather than replace pyrolysis and mechanical recycling, addressing specific polymer streams where selectivity advantages justify higher complexity.

Q: How should organizations prioritize between mechanical and chemical recycling investments?

A: The optimal approach depends on feedstock composition, end-market requirements, and capital availability. Mechanical recycling offers lower CAPEX, proven technology, and established markets, making it appropriate for clean, single-polymer streams like PET bottles or HDPE containers. Chemical recycling addresses contaminated, mixed, or multi-layer materials that cannot achieve food-grade quality through mechanical processing, but requires USD 50–200 million capital commitments and longer development timelines. Most sophisticated circular plastics strategies employ both approaches: mechanical recycling for accessible streams, chemical recycling for difficult feedstocks, with sorting infrastructure determining the split. The decision framework should account for regulatory trajectory—as recycled content mandates tighten, chemical recycling becomes more valuable for accessing difficult feedstocks that mechanical recyclers cannot process.

Q: What infrastructure investments are most urgent for Asia-Pacific plastic circularity?

A: Three infrastructure gaps demand priority attention. First, materials recovery facilities (MRFs) with advanced sorting capabilities: near-infrared spectroscopy and AI-enabled robotics can dramatically improve feedstock quality for downstream recyclers, but capital costs and operational complexity have limited deployment outside Japan, South Korea, and Singapore. Second, collection system formalization: integrating informal waste picker networks with formal recycling infrastructure through aggregation centers, quality incentives, and social protection programs. Third, laboratory and certification infrastructure: testing facilities for recycled content verification, food-contact safety certification, and chain-of-custody documentation remain underdeveloped in most ASEAN markets, creating bottlenecks for export to markets with stringent requirements.

Sources

• Fortune Business Insights. (2024). "Recycled Plastics Market Size, Share & Industry Analysis." Global and regional market projections through 2032.

• Grand View Research. (2024). "Asia Pacific Chemical Recycling of Plastics Market Size & Outlook, 2030."

• OECD. (2024). "Regional Plastics Outlook for Southeast and East Asia." Analysis of waste flows, policy frameworks, and infrastructure needs.

• The Circulate Initiative. (2024). "Plastics Circularity Investment Tracker." Database of private investment activity across 107 countries, 2018–2024.

• McKinsey & Company. (2024). "Growing the Circular Economy in Chemicals." Economic opportunity assessment and investment requirements.

• Packaging Europe. (2024). "Infinity Recycling's Circular Plastics Fund closes above €150 million target." Investor and fund structure details.

• Closed Loop Partners. (2024). "Circular Plastics Fund Announces New Investors." Fund strategy and portfolio company updates.

• Statista. (2024). "Plastic Waste in the Asia-Pacific Region." Regional waste generation and management statistics.