Chemical recycling accelerates and expands production, but pathways for plastic waste management remain controversial

Chemical recycling is at a critical turning point: it needs to prove its economic viability and demonstrate sufficient scalability to meet the needs of the evolving plastics recycling industry.

Several years ago, many of the technologies underpinning chemical recycling were still in the research and development phase, with companies focused on moving results from the lab to practical applications. Today, companies such as Dow, Eastman, LyondellBasell, ExxonMobil, PureCycle, and Cyclyx are investing millions of dollars annually to scale up these technologies. These companies say the investments will accelerate the reduction of hard-to-recycle plastics sent to landfill and convert them into feedstock for new products.

Chemical recycling—also referred to by the plastics industry as "advanced recycling" or "molecular recycling"—is a broad term encompassing a variety of processing technologies. These technologies break down recycled plastics at the molecular level, turning them into "building blocks" for new plastics or other products. Common processes include pyrolysis, gasification, and depolymerization.

In recent years, companies have invested millions of dollars to expand capacity and say these investments are beginning to pay off as small pilot phases end, new facilities come online, or offtake agreements are signed. Mechanical recyclers and waste management companies are also getting involved. Meanwhile, laws recently passed in some states could ease the way for facility construction.

However, some environmental and health experts point out that chemical recycling companies cannot actually process the volume of materials they claim, which instead fosters an unsustainable reliance on plastics rather than driving reduction or elimination of plastic use. They also worry that such facilities could have harmful health impacts.

Over the past year, Waste Dive has spoken with numerous waste and recycling experts, researchers, legislators, companies, and other stakeholders to understand how chemical recycling will continue to impact the industry.

The debate over chemical recycling touches nearly every corner of the industry—from regulation and job creation to investment and commodity markets. Industry insiders say the coming years will determine how deeply chemical recycling becomes embedded in the broader recycling landscape, and whether the expansion plans of many companies can reach the commercial scale needed to deliver on their promises.

The story of scale

This debate comes at a time when U.S. plastic recycling rates have long been stagnant, and legislators and local recycling agencies are pushing for more and better recycling infrastructure. At the same time, public pressure on major brands to use more recycled content is growing, prompting companies to make public commitments to recycled content targets, some of which need to be met as early as 2025.

A coalition of major brands has called for access to as much as 800,000 metric tons of chemically recycled plastic by 2030. The international community is also watching how chemical recycling might play a role in tackling global plastic pollution. The United Nations is pushing for a legally binding international agreement on plastic pollution, and negotiations have touched on differing views of chemical recycling's role—some see it as an effective way to manage plastic waste, while others call it a "dangerous practice."

Chemical recycling companies do not position themselves as competitors to the existing mechanical sorting and recycling industry, but rather emphasize their role as important partners aimed at accelerating waste diversion and recycling. They say chemical recycling can accept certain low-value mixed plastics that mechanical recyclers are not interested in. Their processes can handle plastics of various colors—including colors like black that sometimes have limited markets—and filter out dyes as they break materials down to the monomer level.

"Looking at the problem in front of us—the challenge of plastic waste—it really requires some truly innovative solutions, especially ones that can provide scale, because the challenge itself is enormous," said Manav Lahoti, Dow's global sustainability director for hydrocarbons and businesses, in an interview late last year. "Mechanical recycling is an important component, but it cannot achieve the scale of recycling for these plastics. That is what advanced recycling can do."

Over the past two years, many major chemical recycling announcements have focused on scale, including new or expanded large facilities, as well as announced strategic partnerships and offtake agreements.

Paschalis Alexandridis, a professor in the Department of Chemical and Biological Engineering at the University at Buffalo who researches plastic recycling, said "scalability" is a key keyword defining the current turning point in chemical recycling. Many university researchers are developing chemical recycling technologies at the lab level and seeking partnerships with companies to scale research results into mature commercial solutions.

Speaking in March at the REMADE conference, an academic event focused on the circular economy, Alexandridis noted that the U.S. produces billions of pounds of plastic each year, but only a very small fraction of it is recycled. "Some people say the solution is to eliminate plastics, or find some magical chemical method—but each of these 'solutions' cannot handle such a large volume of plastics every year. Absolutely impossible. So we need many different approaches, and we need them soon."

Haley Lowry, Dow's global sustainability director for packaging and specialty plastics, said in an interview late last year that pressure from consumers and brands, along with recently passed recycled content laws in places like California, are important policy drivers helping advanced recycling projects truly take off.

Dow announced last year that by 2030 it will "commercialize 3 million metric tons of circular and renewable solutions annually," using plastic waste and other forms of alternative feedstocks to make new products. The company had previously set a target of 1 million metric tons per year.

"To achieve this goal, you can't rely solely on mechanical recycling, nor solely on advanced recycling or bio-based materials," Lowry added at a plastics recycling conference in March. "We are really thinking about offering a full suite of technologies, and advanced recycling is a key component of our strategy."

To that end, Dow is building chemical recycling facilities while also investing in mechanical recycling sites and mixed sites, and has reached new agreements with several companies to process plastic waste.

ExxonMobil is another company investing millions of dollars to advance the scaling of chemical recycling technologies. One of its major projects is a chemical recycling facility in Baytown, Texas, with an annual processing capacity of 40,000 tons, part of its goal to build about 500,000 metric tons of collective advanced recycling capacity in the U.S., Canada, Europe, and Asia by the end of 2026.

Natalie Martinez, ExxonMobil's North American advanced recycling commercial manager, emphasized its expansion plans at the conference. "What really matters for us—and we believe for the industry—is being able to do this in a scalable way to create truly meaningful solutions," she said.

Meanwhile, Eastman Chemical is promoting its molecular recycling facility in Kingsport, Tennessee, which is expected to have a capacity of up to 100,000 metric tons once fully operational. The company also plans to build two additional facilities: one in an unnamed U.S. city and another in France.

The plant was originally scheduled to begin operations in 2022. In written remarks during its second-quarter earnings call in July, Eastman executives said the company recently "made substantial progress in accelerating construction over the past few months, although the ramp-up has taken longer than we expected." Its pilot plant has been "operating for more than two years, which has allowed for continuous improvement of the technology." Eastman aims to produce material from the pilot plant by the end of the year.

Working alongside mechanical recycling

An important part of the message from chemical recycling companies is that they do not intend to compete for materials with established recycled commodity markets, such as PET bottles and HDPE jugs.

"We focus on waste streams that don't have good outlets or end markets within the mechanical recycling system," said Holli Alexander, Eastman's sustainability director for specialty plastics, at a plastics recycling conference earlier this year. "We want to grow the pie."

Large recyclers like WM also see opportunities for the two technologies to work together. The company partnered with Dow on a pilot project in the Chicago area to collect plastic film in curbside recycling bins. WM says the project could help it divert more than 120,000 metric tons of plastic film from landfills each year. Both mechanical and chemical recycling processes can be used to convert these materials.

"I think there is still strong demand for chemical recycling facilities in the U.S. because mechanical recyclers naturally cannot handle all materials," Brent Bell, WM's vice president of recycling operations, said at the conference.

Plastic film is an ideal feedstock for Dow's chemical recycling process, and WM typically does not recycle such materials. Bell said this reflects a growing industry consensus that chemical and mechanical recycling operators want different types of materials and can work together to send them to the appropriate end markets.

"You'll hear most people—whether from chemical or mechanical recycling—say that mechanical recycling should always have first priority for recyclables," he said. "Even big chemical recycling supporters tell us that."

The Houston Recycling Collaboration is another example. The city of Houston, along with FCC Environmental Services, ExxonMobil, LyondellBasell, and Cyclyx, formed the collaboration in 2022 to increase the city's plastic recycling rate by collecting a wide variety of plastics and to expand both mechanical and chemical recycling operations. The collaboration is advancing several projects, including a plan to expand the types of materials accepted at 10 city recycling drop-off sites. By the end of this year, the collaboration plans to allow residents to drop off all types of plastics, including dry cleaning bags, bubble wrap, and polystyrene foam.

Will Sagar, executive director of the Southeast Recycling Development Council, said differences in operating costs between mechanical and chemical recycling facilities could also ease future competition for certain types of plastics. "We don't feel advanced recycling is a threat because its operating costs will be significantly higher than mechanical recycling, so they won't be willing to pay the same price for the same bale of material," he said. "Mechanical recyclers will still have a competitive advantage in securing quality material."

However, Sagar added, as more chemical recyclers enter the market, their preferences could impact commodity markets. "This could create a floor price for bales to provide some stability, because if PET or HDPE bale prices fall below a certain level, the advanced recycling industry could start buying. But in cases where clear HDPE is valued higher than cans, that's unlikely."

Legislation paves the way for chemical recycling

While large companies continue to focus on investment and operations, chemical recycling supporters are trying to push state and federal legislation to reclassify chemical recycling as a manufacturing process rather than waste management, thereby clearing obstacles for companies to operate.

The American Chemistry Council (ACC) is a major driver in this area and has helped push through at least 24 state-level bills over the past few years. All but one of these bills passed in Republican-controlled state legislatures.

Supporters say reclassification helps bring new business to states and could help advance state recycling or waste diversion goals. At a Senate subcommittee hearing in March, Oklahoma Republican Senator Markwayne Mullin called for further investment in advanced recycling, saying these technologies embody American innovation and job creation.

This was not the first time chemical recycling was the subject of a congressional hearing in the past year, indicating the technology is receiving increasing attention at the national level. Meanwhile, some House Republicans have advocated for more research resources for chemical recycling technologies.

However, environmental groups oppose these bills, saying reclassification would help such facilities circumvent environmental permitting or regulatory requirements. Last year, the Rhode Island legislature rejected a similar bill, partly due to strong criticism from environmental groups. The ACC says that even if such facilities are regulated as manufacturing rather than waste management, most would still need to comply with the Clean Air Act and other emissions regulations.

In Illinois, a bill introduced in March highlighted a larger tension at the state level over the role of regulations in facility permitting. The bill, which ultimately did not pass, would have extended the deadline for an unnamed chemical recycling facility to begin construction—supporters, including petrochemical groups, said the move would help advance a project delayed by supply chain and COVID-19 issues. Several environmental advocacy groups said the bill would allow the facility to circumvent important environmental regulations.

Chemical recycling discussions have also appeared in other types of state legislation, including extended producer responsibility (EPR) discussions. Some argue that in states with upcoming EPR programs, chemically recycled plastics should count toward targets.

At the federal level, several Democratic lawmakers have introduced legislation aimed at prioritizing a transition away from plastics. The "Protecting Communities from Plastics Act," introduced in Congress late last year, calls for stricter regulation of plastic manufacturing, including temporary permitting pauses for some facilities, including certain ones considered chemical recycling.

Open questions

The industry has grand ambitions, but lingering environmental concerns and regulatory uncertainty could act as potential drags on the future scaling of chemical recycling businesses.

Federal regulators have not yet made clear statements about where or how chemical recycling can develop. In 2021, the U.S. Environmental Protection Agency (EPA) initiated a formal rulemaking process to determine how to regulate pyrolysis and gasification units—which are currently classified as waste combustion facilities under the Clean Air Act.

The EPA said deeper study is needed because there is "considerable confusion" about which operations should be subject to such regulations, especially given public questions about the technology's role in plastic processing. Environmentalists argue the regulations should remain as they are, but the plastics industry says the classification of pyrolysis and gasification does not apply to most types of chemical recycling. It is unclear when draft rules will be released; an EPA spokesperson did not respond to questions by press time.

For some environmental groups, federal regulatory action is a necessary step to prevent more plastic-related industries from expanding to the commercial scale they advertise.

Groups such as the Sierra Club and the Global Alliance for Incinerator Alternatives continue to call for stricter scrutiny and restrictions on chemical recycling facilities.