21/08/26
Pyrolysis can optimise: CRE
The cost gap between circular and virgin polymers will narrow over time, but
only with investment and regulatory change London, 21 August (Argus) — Pyrolysis
yields will improve as the industry matures, boosting availability of circular
polymers and reducing the cost gap to virgin polymers, industry association
Chemical Recycling Europe (CRE) president and Dutch technology company BlueAlp
chief executive Valentijn de Neve tells Argus. "We've already come a long way by
influencing the process conditions that mean you minimise gas production,
maximise oil production and integrate gas fractions into downstream units to
make sure they do not become fuels but become materials," de Neve says.
Recouping plastic-derived pyrolysis oil from char and bitumen fractions produced
by pyrolysis units, or using them as a standalone product, can also help, he
adds. A recent paper by the EU's Joint Research Committee (JRC) stated that
circular polymers likely need to cost around three times more than virgin
polymers on average for the industry to sustain its costs. CRE's view is that
such a large cost gap is similar to that seen in other nascent sustainability
transition industries and will narrow over time and with investment, de Neve
says. "The JRC rightfully says that circular is more expensive than virgin and
that incentives, penalties and enforcements are required to build up capacity,"
de Neve says. But "CRE thinks this report misses what is possible in terms of
development of that price", because the data it uses was gathered from early
facilities and it does not factor in improvements in operating rates, scaled-up
technologies and innovative business models that various CRE members of are
using, he adds. Attracting investment will be the next challenge. European
pyrolysis capacity will have to expand by 6-8 times from current rates in order
to provide the 10pc recycled content for non-PET contact sensitive plastic
packaging by 2030 that the EU Packaging and Packaging Waste Regulation (PPWR)
dictates, Argus Consulting says. This necessary scale of expansion far outweighs
the current announced project pipeline, Argus data show. But de Neve is
confident that there are more than enough projects in the pre-final investment
decision stage to meet demand, if investors can be persuaded to pull the trigger
and plants can be ramped up to target operating rates. "Operating rates will be
sufficient" but regulators need to create an environment that persuades would-be
investors to commit, he says. "A couple of pieces of secondary legislation are
needed… we need mass balance fast, we need clarity around the enforcement in the
right way, and we need... European materials to have a level playing field," he
says. One commonly cited regulatory hurdle of PPWR for the industry is its
so-called revision clause, which gives the European Commission options to enact
changes, delays or exemptions to the 10pc recycled content requirement if it
thinks it cannot be achieved. Under the regulation, the commission has until
February 2028 to make a final decision. The JRC report represents a positive
early sign that the commission thinks enough capacity can be built under the
right market and regulatory circumstances, strengthening the case against
changes to the regulation, de Neve says. The JRC report is "very clear that
building the capacity needed for this regulation is not the issue", he says.
BlueAlp is seeing particular interest in developing projects with its technology
from private-sector financial institutions and waste management companies, de
Neve says. Petrochemicals companies and downstream consumers such as brand
owners are also active across the wider industry, he says. However, demand for
circular polymers has been weak in the past 12 months. Whether because of
regulatory uncertainty, cost cutting or low confidence in the robustness of the
supply chain, many converters are in no rush to switch to using more chemically
recycled materials in packaging. The pyrolysis industry is going through a tough
period, and finding ways to bring demand forward ahead of the 2030 target is key
if it is be achieved, de Neve says. "In 2030, there's the mandatory demand for
circular content, and today it's a voluntary market. And between now and 2030,
that's a time that we all need to bridge", he says. Extended producer
responsibility measures with discounts for circular content are a positive step,
he says. And a proposal for companies to be able to count recycled content used
before 2030 towards their PPWR obligations from that date, which de Neve
describes as "pragmatic", is gaining momentum within the industry — although it
so far remains unclear whether regulators are open to such a move. "I think the
good news is that from waste all the way to brand owners and financial
institutions, there's a willingness to invest in this sector and we could
attract more capital the moment the rules of the game are further clarified. And
with that, I actually am quite optimistic on what is planned for the next eight
months in terms of secondary legislation," he says. De Neve was speaking on the
Argus Chemical Conversations podcast, "Can pyrolysis develop in time for PPWR?",
which is available on the Argus website and podcasting apps. Send comments and
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