In recent years, the recycled plastics market is shifting from low-cost alternatives to high-quality recycling promoted by environmental protection and carbon reduction. Argus interviewed Guo Jiawan, chairman of Guangxi Guolong, and Arnold Wang, founder of Shichai Environment, on the following topics before the Second International Rigid Polyolefin Recycling Summit hosted by Shichai Environment:
- Prospects of China’s recycled plastics exports
- Food contact applications of recycled plastics
- EU’s “mirror-clause” in the Single Use Plastics Directive, etc
How much demand do you see from export markets for your products, what are the key export markets, and for which products and end-use applications (rPET, rHDPE, rPP, Packaging grades)?
Guo: The application of recycled plastics in the packaging market is mainly driven by the demand from international brands. Large brands use environmentally friendly recycled products as a way to actively fulfill their social responsibility and promote the recycling and utilization of waste plastics through their actions. In the Chinese market, international brands have been testing and trialing small batches of recycled plastics over the past two years. In the Southeast Asia, Hong Kong and Macau markets, they have begun to introduce recycled plastic packaging products. Many international brands also have production sites in China, and their export products have started to use recycled plastics. In the personal care sector, they primarily use rHDPE and rPP, while in food packaging, rPET is the main material, all of which must meet food-grade requirements and obtain FDA or EFSA certification.
Most participants are focusing on food contact recycled materials, but China currently does not allow recyclates to be used in food-contact applications. In such a situation, how should Chinese recyclers develop their business? Would pyrolysis be an appropriate approach for Chinese recyclers to look towards?
Wang: Currently, the main applications for high-value products from Chinese PET recycling enterprises are textile fibers, industrial yarns, and other non-food grade uses. Food-grade rPET products can also meet specific needs in personal care products, and other food-grade rPET supplies include exports to Hong Kong and overseas markets.
Pyrolysis is still in the exploratory stage in China, and several commercial projects have been announced this year, but their operation will take some time and still requires market validation. On August 27-28 this year, we will have an International Rigid Polyolefin Recycling Summit in Shanghai, which will include topics related to chemical recycling and pyrolysis. Those who are interested are welcome to follow and participate.
The EU is mulling a “mirror-clause” in the Single Use Plastics Directive which would mean that recyclers from outside the EU that are sending material to the EU to count towards our recycled content targets will be held to the same feedstock, process and environmental targets as European recyclers. How do you expect this to develop and do you see any impact on your business?
Guo: [Complying with EU standards] is not difficult for Guolong Recycled Plastics, because the process technology, production equipment and environmental standards of Guolong are the same as those in Europe, as is the the use of PCR materials.
Over the past few years, Guolong have passed various tests, factory inspections, and production environment assessments required by more than twenty international brand companies, and safely met their requirements. But, if the EU pushes this policy, it might implement certification permits through factory inspections under a case-by-case basis, which might impose certain restrictions on many other recycling enterprises in China.
What is Guolong's future development target, and does Guolong plan to invest in chemical recycling in the near future?
Guo: After ten years of development, Guolong has now established sizeable capacity for producing recyclates for a range of different end-uses (see table). We have successfully implemented a business model that spans the entire industrial chain, encompassing both food-grade and industrial-grade products. Currently the company has no concrete expansion plans for the future.
| Recycling type | Capacity (t/yr) |
| Food-grade rPET | 60,000 |
| Food-grade rHDPE | 20,000 |
| Food-grade rPP | 20,000 |
| Pipe grade recyclates | 80,000 |
| Industrial grade rHDPE | 20,000 |
Do you expect to see a market start to develop for recyclates into the food packaging market in China in the near future (i.e. a change of regulation) and what other regulatory changes in China do you expect that could support the recycling industry?
Wang: China is currently researching the safety of using recycled materials in packaging applications, which includes not only recycled plastics but also recycled metals, such as whether recycled aluminum can be used for cans. The local market is also awaiting the issuance of relevant documents.
Presently, the government has introduced various policies such as the "trade-in" policy and the reverse invoicing policy, which have all promoted the expansion of the recycling industry. These allow recyclers to issue invoices to their waste suppliers (rather than the other way around), to enable recyclers to claim a VAT deduction even when the waste seller they are working with is too small to issue invoices. Government policy may also be directed towards waste classification in the future, this could be the direction for future government policy.
Of course, establishing a complete recycling system requires more implementation strategies and more time to explore development paths and undertake construction.
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Sabic to sell European business to Aequita: Update
Sabic to sell European business to Aequita: Update
Adds detail on Sabic write down in para 2 London, 8 January (Argus) — Saudi state-controlled Sabic will sell its European petrochemicals and polymers assets to Germany-based private equity company Aequita for $500mn, it said today. The transaction will be fully funded by loans from Sabic that are repayable "based on future cashflows, resulting from synergies between the divested Sabic business and other European olefins and polyolefins assets". The companies anticipate the deal closing in the fourth quarter. Sabic said that it would record a SAR10.8bn ($2.88bn) non-cash write down as a result of the divestment The acquisition includes Sabic's production facilities in Teesside, UK, Geleen, the Netherlands, Gelsenkirchen, Germany, and Genk, Belgium. This includes an operating cracker in Geleen, Sabic having closed another cracker there, and a cracker in Teesside. Sabic said the sale allows it to "exit structurally competitive disadvantaged assets" and help it to "refocus financial resources and management attention towards growth areas where [it] has clear competitive advantages". Sabic said it would export products to Europe and the Americas from the Middle East, although the sale agreement includes all related commercial functions. Aequita is in the process of building a scaled olefins and polyolefins business. It is already acquiring olefin and polyolefin assets from LyondellBasell . It could have options to extend, with various assets up for sale including BP's integrated refinery and cracker complex in Gelsenkirchen, which is a key supplier to Sabic's polymer production at the same site. Sabic also said today that it will sell its engineering thermoplastics division in the Americas and Europe to Mutares, another German private equity company. Sabic European chemical and polyolefin assets Country Location Product Capacity ('000t) UK Teeside LDPE 415 Germany Gelsenkirchen PP 320 Germany Gelsenkirchen HDPE 220 Germany Gelsenkirchen LLDPE 300 Netherlands Geleen Ethylene 690 Netherlands Geleen Propylene 405 Netherlands Geleen HDPE 150 Netherlands Geleen LDPE 375 Netherlands Geleen PP 550 Netherlands Geleen Butadiene 120 Netherlands Geleen Benzene 170 Netherlands Geleen MTBE 160 Belgium Genk PP compounding 180 Source: Sabic Aequita olefins and polyolefin assets, post-Sabic and LYB completions Country Location Product Nameplate capacity ('000t) Netherlands Geleen Ethylene 675 Germany Munchsmunster Ethylene 345 France Berre Ethylene 456 Total ethylene 1,476 Germany Gelsenkirchen HDPE 270 Netherlands Geleen HDPE 150 Netherlands Geleen HDPE 150 Germany Munchsmunster HDPE 320 United Kingdom Wilton LDPE 400 Netherlands Geleen LDPE 470 France Berre LDPE 320 Germany Gelsenkirchen LLD-HDPE 300 Total PE 2,380 Geleen Netherlands Propylene 485 Munchsmunster Germany Propylene 250 Berre France Propylene 250 Total propylene 985 Germany Gelsenkirchen Polypropylene 325 Netherlands Geleen Polypropylene 350 Netherlands Geleen Polypropylene 250 Spain Tarragona Polypropylene 270 Spain Tarragona Polypropylene 120 United Kingdom Carrington Polypropylene 230 France Berre Polypropylene 340 Total PP 1,885 Source: Argus Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Viewpoint: Asia energy storage to accelerate in 2026
Viewpoint: Asia energy storage to accelerate in 2026
Singapore, 7 January (Argus) — Stronger government signals and new industry initiatives to support energy storage systems (ESS) in Asia-Pacific are set to accelerate deployments, creating ripple effects across the battery and lithium market in 2026 as participants eye a new growth engine. ESS deployment remains uneven across Asia-Pacific. China accounts for 88pc of the region's 85GW capacity in 2024, according to industry group Energy Institute. The remainder is concentrated mainly in Australia and South Korea. These countries aim to scale up ESS buildout further. China is targeting 180GW of capacity by 2027, while South Korea plans to reach 2.22GW capacity by 2029. Australia has committed A$500mn ($337.75mn) to expanding local battery manufacturing. Other Asian nations are also picking up pace. Vietnam is targeting up to 16.3GW of ESS by 2030, while Malaysia launched its first 400MW auction this year. Governments are increasingly supporting integrated renewables and battery projects. India and the Philippines awarded such projects this year; Australia is auctioning dispatchable clean power contracts , and Malaysia intends to do this year, according to lawmakers. "In Asia-Pacific, while spot markets exist in some jurisdictions, most markets still lack mature price signals and ancillary service frameworks needed for merchant energy storage investment," nonprofit EnergyTag's Asia Pacific head Shailesh Telang told Argus . ESS deployment is still primarily backed by tenders, subsidies, regulated tariffs, or state-supported procurement, Telang noted. "Over time, market forces can take over, but today policy remains the primary driver," he said. Industry initiatives could further support growth. Regional advocacy group Fessia launched in September and will initially focus on smoothing policy for ESS deployment and bankability in Vietnam and the Philippines. Corporate standard-setter Greenhouse Gas Protocol is also consulting on switching from annual to hourly matching of clean power purchases . The requirement could spur demand for nighttime clean energy — and, in turn, batteries. But the clause is hotly debated and could feature leeway for smaller industries and emerging economies. Meanwhile, the South Korean government's first ESS central contract market auction in 2025 drew intense interest, selecting eight operators out of 51 proposals for 563MW of ESS capacity — largely concentrated on the mainland. A second auction round followed later. South Korea's ESS momentum, driven by its 2029 capacity target, aligns with domestic battery makers' pivot from electric vehicles. Top battery maker LG Energy Solution's (LGES) plans to produce lithium-iron-phosphate (LFP) ESS batteries domestically, citing the domestic energy ecosystem, starting with 1GWh. South Korean battery makers' ESS focus will likely intensify as the US EV market slows. Leading firms such as Samsung SDI, LGES, and SK On have all redirected resources to tap the ESS market, particularly in the US, given the data centre and renewable energy build-out. Their once EV-dedicated lines are increasingly repurposed to produce ESS as EV market uncertainty lingers. LFP reality sets in Chinese-dominated LFP chemistry continues to see surging adoption in South Korea , which has firmly stepped into the space and closed multiple LFP ESS supply deals in 2025. But China's dominant position in LFP still appears immovable, thanks partly to the scale of its domestic ESS and EV markets. The Chinese government is on track to more than double its new energy storage capacity to 180GW by the end of 2027 from 2024, it said in an action plan . Strong growth persists among Chinese domestic energy storage firms such as Eve Energy, Cornex, Envision, Great Power Energy and Technology, and Hithium, commented a Chinese battery recycler — though the sector remains overshadowed by industry giant CATL. Anticipation of robust ESS growth in China for 2026 — where Argus heard estimates between 30-100pc across multiple analysts and market participants — reflects varying degrees of optimism. Yet, one consensus stands out among market participants: ESS growth is confirmed and is dominating lithium market discussions near the end of 2025, supporting lithium prices and injecting fresh hope for market expansion. By Joseph Ho and Liang Lei Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Viewpoint: Waste feedstock demand grows with RED III
Viewpoint: Waste feedstock demand grows with RED III
The Hague, 5 January (Argus) — European waste feedstock demand is set to rise in 2026, supported by higher targets under the EU's new Renewable Energy Directive (RED III) and the Netherlands' shift to greenhouse gas (GHG)-based mandates. The Netherlands is moving to a GHG savings target without multipliers, while Germany is phasing out double-counting of certain fuels made from feedstocks listed in Annex IX Part A (9A) of RED III. As a result, GHG savings of biofuels and their feedstocks will become the key compliance driver in both countries next year. Caps on Annex IX Part B (9B) feedstocks — such as used cooking oil (UCO) and tallow categories 1 and 2 — are pushing obligated parties towards 9A feedstocks, broadening and fragmenting the sourcing pool. UCO supply and pricing outlook Demand looks well supported heading into 2026, driven by rising mandates and EU-wide frameworks outside RED III, such as ReFuelEU Aviation and FuelEU Maritime, now entering their second year. Hydrotreated vegetable oil (HVO) and sustainable aviation fuel (SAF) producers are expected to dominate UCO procurement this year, with strong margins and firmer obligations pulling more feedstock into hydrotreated esters and fatty acids (HEFA) pathways. Most market participants expect UCO prices to remain broadly stable into the first quarter of 2026, with negotiations pointing to similar levels as late 2025. Some upside risk could emerge if China brings online a planned 500,000 t/yr of SAF capacity in 2026, boosting domestic UCO demand and pushing seaborne prices higher. At the same time, additional Chinese SAF supply — not subject to EU anti-dumping duties unlike HVO and biodiesel — could pressure European prices lower, tightening the SAF/UCO spread and squeezing margins. UCO's high GHG savings continue to underpin demand even as double-counting disappears from Dutch compliance, though it remains in Mediterranean countries in 2026. European UCO methyl ester (Ucome) producers will be squeezed if UCO costs rise, but Germany's removal of double-counting for most 9A feedstocks could support some domestic Ucome demand. Advanced feedstocks gain traction Higher RED III 9A sub-targets are accelerating advanced biofuel uptake and reshaping a fragmented feedstock landscape. Buying interest for 9A-listed food waste oil (FWO) rose in the fourth quarter of 2025, alongside steady demand for soapstock acid oils (SSAO). Forestry-based crude tall oil (CTO) is gaining traction on strong Nordic supply and new co-processing investments, including Neste's European Commission-funded project in Finland . Technical corn oil (TCO), a high GHG-savings ethanol by-product, continues to expand beyond Germany, where it is classified as advanced and eligible for quota generation. But treatment remains uneven across the EU — TCO is not listed as advanced in the Netherlands, with the Dutch Emissions Authority yet to clarify its status. Cashew nut shell liquid (CNSL) is also drawing attention as a marine blendstock and co-processing feed. Regulatory uncertainty persists over cover and intermediate crops — such as camelina and carinata — as their use depends on how member states classify them under RED III during national transpositions. Tighter Pome oil outlook Palm oil mill effluent (Pome) oil faces regulatory pressure across Europe, including in Ireland, Germany, Portugal and the Netherlands, as authorities deepen investigations into traceability and origin verification. Ireland excluded Pome-based advanced biofuels from receiving additional renewable fuel certificates from 1 July last year, while Portugal removed ISP energy-tax exemption for Pome oil and empty palm fruit bunches, though both retained double-counting status. Germany's cabinet-approved RED III draft allows crediting of Pome-based biofuels placed on the market before 2027, reversing expectations of a full exclusion in 2026. The additional year could stimulate compliance-driven buying, levelling the playing field across feedstocks. This regulatory change may lead to firmer demand in the Amsterdam-Rotterdam-Antwerp (ARA) hub, a key entry point for feedstock flows into Germany. Supply uncertainty remains. Indonesian policies to divert material into the domestic biodiesel pool have already firmed prices, with further constraints expected as the country moves toward a B50 biodiesel blend programme in the second half of 2026 and advances plans to scale waste-based SAF output to 1mn kl/yr by 2030. With limited new collection capacity and sustained European demand, Pome oil is expected to stay structurally tight in 2026, supporting a higher price floor. By Anna Prokhorova Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Viewpoint: Brazil methanol market adapts to spot price
Viewpoint: Brazil methanol market adapts to spot price
Sao Paulo, 2 January (Argus) — New import flows of methanol from Russia and Oman in 2025 have increased the competitiveness of the product offered in Brazil's spot market. Methanol cargoes from these origins began arriving at Brazilian ports in May, contributing to an oversupply in the market. Imports from the two origins totaled 72,574t in November, data from Brazilian trade ministry Mdic show. The volume represents 7pc of the total 1mn t imported during the month, which increased methanol spot market activity and pressured competitors to lower their prices. But negotiations for larger discounts on methanol supply contracts will likely limit more significant gains for the spot market this year. The widening price gap between prompt-delivery and forward contracts has led biodiesel plants to negotiate bigger methanol discounts. Biodiesel plants use methanol as a reagent to transform vegetable oils or animal fats into the fuel, a process known as transesterification, and the segment accounts for about half of the methanol purchases in Brazil. The standard negotiation pattern for plants involved average discounts of 44pc for prices set by major suppliers, but in late 2025, biodiesel producers began demanding discounts close to 50pc or more, a trend likely to continue into 2026. Some biodiesel plants intend to increase their share of spot purchases and seek to take advantage of recent price opportunities, but contract volumes still represent most of the market. The price differential between the two purchasing methods increased by 75pc to $181.55/metric tonne (t) in December from $103.72/t in June, Argus data show. Methanol producers, which trade mainly based on contracts, say that spot market levels are unsustainable for maintaining medium to long-term operations. The excess of product availability is also supported by stronger fraud-prevention measures, delays in implementing new biodiesel blending mandates and a sharper-than-expected slowdown in biodiesel sales. Biodiesel plants did not keep up with the increase in methanol imports. The delay in raising the mandatory blend of biodiesel into diesel to 15pc from 14pc affected producers, as the increase was initially expected in March but only implemented in August. Methanol demand from plants grew by 2.5pc in January-October from the same period in 2024, data from the hydrocarbons regulator ANP show. Shipments to Brazilian ports rose by 6.1pc, data from vessel-tracking platform Kpler show. The Hidden Carbon operation also affected the supply-demand balance by removing a volume of methanol intended for illegal use. The operation, launched at the end of August, uncovered a billion-dollar money-laundering and fuel-adulteration scheme involving the illegal import of methanol through the port of Paranagua, in Parana state. Supply and demand Market participants expect another delay in increasing the biodiesel blending mandate in 2026. Negotiations to renew gas supply contracts — the main feedstock for methanol production — are delayed in Trinidad and Tobago, offering less price clarity going forward, methanol producers said. Escalating US-Venezuela tensions, amid the deployment of US military forces in the Caribbean, and a possible lifting of European and US sanctions against Russia also remain on the radar, as this flow was made possible as the European market closed to Russian suppliers because of the Ukraine conflict. Distributors of Russian product argue that the route to Brazil is now consolidated. Shipments from Trinidad and Tobago and Venezuela accounted for about half of the methanol landed in Brazil in 2025. Companies based in the same current import origins, which have not yet entered the Brazilian market, are considering joining this segment. But the highly competitive and falling methanol price may hinder progress in the coming months. From a demand perspective, expectations point to greater biodiesel sector consumption. Brazilian energy research bureau Epe projects nearly 6pc growth in biodiesel production to 180,000 b/d in 2026. The estimate assumes the maintenance of the current 15pc biodiesel blend mandate in diesel. Despite the likely delay in increasing the blend, biodiesel producers are maintaining investment plans in new plants, aiming at growing demand in the coming years. By Fernando Ladeira Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.