Global brands drive China recycled packaging demand
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.
Spotlight content
Related news
US butane exports hit all-time high in April: Kpler
US butane exports hit all-time high in April: Kpler
Houston, 4 May (Argus) — US butane exports hit an all-time high of 689,000 b/d, or 1.9mn metric tonnes (t), in April as buyers in Asia scrambled to replace lost production out of the Middle East. Data tracking firm Kpler showed US butane loadings surpassed the previous high of 1.76mn t in May 2025, when the US trade war with China rerouted loadings and India — a large buyer of butane for residential use — agreed to take US-origin cargoes as part of a trade deal. India was the primary destination for many of the April exports, with 247,000t en route there in April, according to Kpler. Roughly 231,000t shipped to Morocco, 162,000t went to China and another 134,000t to Korea. Mideast LPG cargoes are predominately split evenly between propane and butane, whereas export terminals in the US are configured to mostly load propane. The resulting surge in demand for US butane pushed spot terminal fees for May and June-loading split cargoes to a 10¢/USG or more premium to full-propane loadings, even as global supplies of both products are tightening in the face of the blockade at the strait of Hormuz. In the US, inventories of butane remained 27.5pc above year-before levels as of February at 33.76mn bl, or 3.13mn t, according to the latest data available from the Energy Information Administration (EIA). Prompt-month US butane prices at Mont Belvieu, Texas, are up by 21.875¢/USG, or 23.6pc, since the war with Iran began but have lagged steeper gains in crude because of ample supplies. US butane stood at 47.2pc of Nymex WTI on 1 May, versus 65.6pc last year. By Amy Strahan Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Japan’s petchem supplies to last into next year: PM
Japan’s petchem supplies to last into next year: PM
Tokyo, 1 May (Argus) — Japan's supply of naphtha-derived chemical products is sufficient to last beyond the end of this year, prime minister Sanae Takaichi said. Japanese refiners are continuing to produce domestically refined naphtha, while naphtha imports from countries outside the Middle East — including the US, Algeria and Peru — will treble in May compared with levels before the escalation of geopolitical tension in the Middle East, Takaichi said on 30 April. Naphtha imports from such countries were 900,000 kilolitres (190,000 b/d) in April and will surpass 1.35mn kl in May, according to the trade and industry ministry Meti. Japan has also secured stocks of intermediate chemical products, such as polyethylene and polypropylene, totalling around 1.8 months' worth of use. These procurement efforts and inventory utilisation mean Japan can maintain its supply of naphtha-derived chemical products beyond the end of the year, Takaichi said, up from the previous estimate of over six months made in early April. Japan has secured around 1.4mn b/d of crude oil for May, accounting for around 60pc of the country's requirement based on average 2025 imports of 2.36mn b/d, Takaichi said. The country secured more than 500,000 b/d in April, around 20pc of its needs, according to Meti. Japan has been drawing on its stockpiles to cover its remaining requirements. It began releasing a second batch of oil from its national reserves on 1 May, Meti said today. The ministry previously said on 30 April that the start of this release would be delayed by one day to 2 May. Takaichi also reiterated that Japan has sufficient oil supplies to last beyond the end of this year, taking into account its oil reserves and alternative purchases. Tokyo has been providing fuel subsidies to ease the impact of rising oil prices caused by supply disruptions through the strait of Hormuz, as it aims to cap retail gasoline prices at around ¥170/l ($1.08/l). Japan's nationwide average gasoline price has fallen to ¥170/l, which is half the level in European countries and similar to prices in oil-producer the US, Takaichi stressed. Japan's subsidised retail gasoline prices averaged ¥169.7/l as of 27 April, according to Meti. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
German chemical industry power demand could resume fall
German chemical industry power demand could resume fall
London, 30 April (Argus) — Power consumption in the German chemical manufacturing sector has fallen sharply over the past decade and could continue to decline in the coming years unless structural reforms are implemented quickly, chemical industry association VCI executive director for sustainability, energy and climate policy Matthias Belitz told Argus . Power consumption in the manufacturing of chemical products totalled 42.79TWh in 2024, according to the latest data from statistical office Destatis, making up more than 9pc of total electricity consumption. But consumption in the sector has dropped by nearly 20pc on 2014-18 levels, and in 2024 was the second lowest for any year since at least 2008, only behind 2023 ( see consumption chart ). A fall in overall chemical production has been a key driver in the power consumption decline, Belitz said. Chemical production fell by 3.3pc on the year in 2025 and was down by about 21pc on 2021, VCI figures show ( see production chart ). Chemical plants totalling 9pc of European production capacity have closed since 2022, with 25pc in Germany, a report commissioned by European chemical industry body Cefic earlier this year showed. Belitz attributed the recent woes in the German chemical industry to global overcapacity, overly complex bureaucracy and high energy costs. Global chemical production capacity has risen sharply in recent years, with particularly strong growth in China and the Middle East, while demand for basic chemicals has largely stagnated. This shift in supply-demand balance has weakened the German industry, and the Middle East conflict will "undoubtedly" have "negative consequences", Belitz said. The business climate in the German chemical industry "deteriorated significantly" in March, according to the latest survey conducted by German economic research institute Ifo. Share of power consumption stagnant Power's share of total energy consumption in the chemical industry fell narrowly on the year in 2024 to 25.1pc and was slightly below the 2008-23 average, the latest Destatis data show. An electrification investment incentive is currently "lacking", Belitz said. Electricity is too expensive, making large-scale electrification unviable without significant policy changes. And in a highly uncertain environment, it is difficult for firms to make long-term investment decisions, he added. Energy-intensive industry association VIK's index for average industrial power prices — tracking wholesale developments — stood at 309 points in March, against a January 2002 baseline of 100 points, with the rise well outpacing inflation. By contrast, the index was consistently below 200 in 2009-20. Belitz also pointed to the lack of physical availability of grid connections. Obtaining grid connections can take 5-10 years, further complicating the electrifying process. ‘Structural reforms' required to boost power demand To prevent further plant closures and enable electrification, "structural reforms" are urgently needed, Belitz said, including lowering overall power system costs, synchronising renewables expansion with grid expansion and ensuring consistently lower all-in electricity costs. "We need the physical pre-requisites regarding the grid and we need solutions for times when renewables are not producing," Belitz said, arguing that "expanding renewables capacity alone is not enough" but that "it is important that the availability of renewable energy is perpetuated". German chemical company BASF echoed this sentiment. "Politically induced costs must be reduced," a BASF spokesperson told Argus , urging a "faster, co-ordinated expansion of renewable electricity and grids", while also demanding a "fundamental ETS [emissions trading system] reform". The EU ETS puts Europe at an "enormous" disadvantage, Belitz said. Other regions have followed Europe's emissions pricing at "a significantly slower pace than expected and also with a much lower magnitude". Chinese firms, for example, pay roughly one tenth of Europe's CO2 emissions costs, and not all sites are liable, Belitz said. BASF last month opened its Zhanjiang Verbund chemical production site in China, into which it invested €8.7bn. The site's construction aligns with BASF's strategy of "investing where we see opportunities for growth", a spokesperson told Argus . China recorded 45.7pc of global turnover in the chemical industry in 2024, according to VCI data. China's 2024 chemical production was up by 26.6pc on 2021, while German production was down by nearly 19pc ( see international production chart ). And the carbon border adjustment mechanism (CBAM), intended to safeguard European industry and prevent carbon leakage, is "unsuitable for protecting our companies in international competition", Belitz said. The complexity in the industry is too high, meaning CBAM will "constantly lag behind the reality" and generate massive bureaucracy. CBAM currently does not apply to the vast majority of chemicals, although they are likely to be included in the future. Government subsidies only a ‘temporary fix' Government measures to subsidise industry, including the industry power price and an expansion of the power price compensation, are "merely a temporary fix", Belitz said. The industry power price will relieve beneficiaries of 50pc of the yearly average wholesale price in 2026-28, although only down to €50/MWh, while the power price compensation expansion aims to slightly boost aid for firms' incurred indirect emissions costs as part of their electricity costs. These measures provide some short-term relief, but more structural solutions are required to keep industry afloat. "The government cannot subsidise permanently, it will not work," Belitz said. These instruments alone are "insufficient to sustainably restore competitiveness", BASF said. Power consumption is expected to rise significantly in the long term, despite stagnation in recent years, Belitz said, citing the Chemistry4Climate study last updated in 2024. Power consumption across chemicals and pharmaceuticals, with the former making up the vast majority, could reach 160-440TWh by 2045, according to the study, assuming climate neutrality and strongly depending on how much hydrogen will be imported, although Belitz said we "must acknowledge that we will not end up in an all-electric world". In the near term, power consumption in the chemical industrial sector is likely to continue dropping, owing to further falls in production, unless structural reforms in the energy and regulatory sectors take effect promptly. By John Horstmann German chemical industry consumption by year German chemical industry, production, electricity, gas consumption index 2014=100 International chemical production index 2014=100 German chemical industry 2008-24 average energy consumption % Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Braskem names Petrobras chief as board chair
Braskem names Petrobras chief as board chair
Sao Paulo, 30 April (Argus) — Brazil's Braskem has appointed Petrobras chief executive Magda Chambriard as chair of its board of directors, following a decision taken at the company's shareholders' meeting on 29 April, the petrochemical producer said. The appointment was made under the slate of directors nominated by Petrobras, which is Braskem's second-largest shareholder, and aligns with the new governance framework currently in place at the company. Braskem said the new board will serve for the term set out in its bylaws, and the company did not announce any changes to executive management. Petrobras confirmed the nomination, saying the appointment reflects the governance arrangements agreed with Braskem and reinforces cooperation between the two companies. The oil major did not provide further details on the scope of the chair's role. Braskem is in the middle of a control transition following fellow conglomerate Novonor's agreement to sell its controlling stake to the IG4 fund, ending its long-standing position as Braskem's controlling shareholder. As part of that transaction, Braskem is moving to a shared-control structure, in which IG4 and Petrobras hold key governance rights. Under the new model, neither shareholder exercises unilateral control, and strategic decisions require alignment between the parties, while Braskem's management and day-to-day operations remain unchanged. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.