The European chemical recycling industry is studying and reacting to an updated proposal for allocation of chemical recycled content towards EU targets, which the European Commission circulated to member states before Christmas.
Details of the circulated update to implementing rules for the Single-Use Plastics Directive (SUPD) were not made public, but a leaked draft emerged this week indicating little substantive change to proposed mass balance accounting rules from those that the bloc put to public consultation in the summer.
Chemical Recycling Europe (CRE) — an industry association representing companies that provide technology or operate chemical recycling plants — said that progression towards mass balance rules is a positive step, which would support the chemical recycling industry.
The draft rules for mass balance are "in line with key principles that CRE has advocated for", chairman Valentijn De Neve told Argus.
Some changes have been made to the wording around mass balance attribution, but the broad approach remains the same to tracking "eligible material" — plastic waste or materials derived from plastic waste such as pyrolysis oil (PPO) or equivalents — through the polymer production chain.
Proportional allocation of recycled content — where the percentage of eligible material used as feedstock is applied equally across all outputs — would apply at any stage before eligible material is processed in a steam cracker. This would appear to continue to strongly favour a standalone upgrading process for PPO, where most or all of the output would be fed into a steam cracker, and possibly frustrate any plans that involve co-processing PPO in a standard oil refinery where a large proportion of the output would be consumed in the fuels market rather than the chemicals/polymers value chain.
Once the material enters a steam cracker stage of the process, a "fuel-use exempt" methodology would still apply, where recycled credits could be reallocated among products that remain in the chemicals and polymers value chain, but not from process losses and products that become fuels.
While these rules pertain specifically to how recycled content can be counted towards the SUPD's 25pc recycled content target for PET beverage bottles, they are expected by many in the industry to be a template for future mass balance rules and could be used to attribute recycled content under the EU's broader Packaging and Packaging Waste Regulation targets, which will apply from 2030.
Imported recyclate rules
The draft implementing decision also includes detail on how recyclates from outside the EU will be allowed to count towards the 25pc recycled content target. Recyclates from non-EU OECD countries will be eligible from 21 November 2027, while recyclates from non-OECD countries "should only be allowed to count towards the target if agreements or arrangements with the EU have been concluded which ensure the environmentally sound management of plastic waste".
This updates the latest published regulation, which requires recyclates to be produced from EU post-consumer waste to count towards the targets. But, even if imports are allowed under some circumstances, mechanically-recycled rPET would still have to meet other EU standards, such as the "2022/1616" regulation which requires — among other things — that recyclates used in food-contact applications must be made from plastic waste from separate collection systems.
CRE would prefer a requirement for recyclates to count towards the targets to be produced in the EU27+3 countries [all EU members plus the UK, Norway and Switzerland] to count towards the targets, rather than allowance of OECD-produced recyclates, De Neve said, as creating demand for European recycled content is an important mechanism to achieve European recycling rates and support the European chemicals and recycling industries.
Acceptance of mass balance "creates the opportunity for a circular chemical industry — the key question is, will this be a European opportunity", he said.
Among non-EU OECD countries, the US and South Korea have the largest established pyrolysis capacity, Argus chemical recycling project tracker data show.
Next Steps
Further reactions may emerge in the coming days, but — while formally a proposal — EU states have little room for substantive changes barring a rejection. Adoption is via a technical advisory committee composed of experts sent by EU member states. There a qualified majority of 15 of the 27 EU states, representing at least 65pc of the bloc's population, is normally required to formally adopt the commission's draft.
The commission has not yet indicated a date for the vote. Entry into force, following adoption and several weeks of translation and administration, would take place 20 days after publication in the bloc's official journal.
