Chemical Recycling Remains More Expensive Than Virgin Plastic. Why the Technology Is Still Essential

Chemical Recycling May Never Match Virgin Plastic on Cost. But That Is Not the Real Question.

A recent study conducted by the European Commission’s Joint Research Centre (JRC) reaches a clear conclusion: chemical recycling of plastics is unlikely to compete with virgin plastic on cost in the foreseeable future. Technologies such as pyrolysis and solvolysis remain economically challenging due to the additional processing and refining steps involved.

Yet this does not tell the full story about the future of the circular economy. The real question is not whether chemical recycling is cheaper than producing new plastic. The question is whether Europe can afford to forgo additional recycling capacity.

“Evaluating chemical recycling solely on the basis of production costs overlooks the bigger picture. What matters is the extent to which it can replace primary resources and recover waste streams that would otherwise never return to the circular economy,” says Dr Richard von Goetze, Director Corporate Development at Interzero.

Complementary Rather Than Competing

Chemical recycling is often portrayed as a competitor to mechanical recycling. In practice, the picture is quite different.

Mechanical recycling remains the preferred solution wherever plastics can be efficiently and effectively recycled into new materials. Chemical recycling is not intended to replace these material streams, but rather to complement them. Its greatest potential lies in processing plastic fractions that are currently difficult or impossible to recycle mechanically due to contamination, complex compositions or multi-material structures.

“Any plastic that can be recycled mechanically at high quality should be recycled mechanically. As a complementary technology, chemical recycling comes into play where the technical limits of mechanical recycling have been reached,” explains von Goetze.

The objective is clear: to bring additional material volumes back into circulation and divert them from incineration, rather than redirecting established recycling streams.

Tomorrow’s Raw Materials Are Still Being Incinerated Today

This also addresses a common concern regarding increasing competition for plastic waste.

The greatest untapped potential does not lie in existing recycling streams but in waste that is still being used for energy recovery. Composite materials, heavily mixed plastic fractions and other difficult-to-recycle waste streams continue to be incinerated on a large scale.

For example, a life cycle assessment of Germany’s dual systems found that around 75 per cent of sorted mixed plastics were sent for energy recovery. Chemical recycling offers an opportunity to turn at least part of these volumes into valuable secondary raw materials.

“The key resource for chemical recycling are not the materials that are already being successfully recycled through mechanical processes. The real opportunity lies in plastic fractions that currently have no route back into the circular economy and typically end up in incineration,” says von Goetze.

No Circular Economy Without High-Quality Feedstock

The JRC study also highlights another important point: the quality of the input material is a critical factor in determining both the economic viability and technical performance of chemical recycling processes.

As a result, the targeted preparation of suitable waste streams is becoming increasingly important. One example is the joint venture between Interzero and OMV in Walldürn, Germany. The site hosts one of Europe’s largest post-sorting facilities dedicated to chemical recycling. Its purpose is to process sorted mixed plastic waste from Germany’s lightweight packaging collection system into high-quality feedstock for downstream recycling processes.

“The quality of the input material has a direct impact on the quality of the output. That is why we invest across the entire sorting value chain. Chemical recycling depends on high-quality feedstock, and modern post-sorting technologies enable us to provide precisely that,” explains Thomas Herkert, Senior Vice President at Interzero.

Regulatory Recognition Creates Investment Certainty

The European Commission’s study also underlines the importance of regulation for future market development.

Mandatory recycled content targets and European legislation are expected to significantly increase demand for chemically recycled materials. At the same time, achieving economic viability remains a challenge for investors. Expanding industrial-scale capacity will require both technological scaling and reliable regulatory frameworks.

This includes the recognition of the mass balance approach, which enables recycled raw materials to be allocated along complex petrochemical value chains. Only when regulatory recognition, industrial scaling and market incentives work together can long-term investments in additional recycling capacity be secured.

Regulatory recognition of chemically recycled materials should also take into account the waste streams from which they are produced.Chemical recycling can help close the anticipated gap in the supply of recycled materials, but it should not come at the expense of mechanical recycling.

“We need a regulatory framework that reflects technological realities while strengthening the circular economy. Mechanical recycling must always take priority. At the same time, waste streams that are currently predominantly incinerated should make a meaningful contribution to meeting recycled content targets under the PPWR,” says von Goetze.

He also argues that chemically recycled materials should receive broader recognition under Germany’s Packaging Act, extending beyond the current five per cent allowance for additional recycling processes.

Such recognition would not only enable more plastic waste to be returned to the circular economy but would also provide greater investment certainty for companies developing new sorting and recycling infrastructure.

A Circular Economy Requires Every Available Solution

The JRC study ultimately highlights one key point: chemical recycling is not a silver bullet.

It is unlikely to replace virgin plastic on price in the near future, nor will it displace mechanical recycling. However, it can play a crucial role in recovering material streams that are currently lost from the system and returning them to the circular economy.

As resource scarcity intensifies and the impacts of climate change become more pronounced, the question will not be which recycling technology prevails. A successful circular economy cannot be built around a single solution. It depends on deploying every technology where it can make the greatest contribution to resource conservation and sustainable materials management.

Sources:
JRC Publications - Economic viability of chemical recycling
Ökobilanz zu den Leistungen der dualen Systeme im Bereich des Verpackungsrecyclings | oeko.de