Chemical recycling (sometimes also called advanced recycling or molecular recycling) refers to a suite of technologies including chemical, thermal, catalytic, bio/enzymatic or other molecular processes to break down used plastics into their basic chemical building blocks.
While mechanical recycling remains dominant in North America, the U.S. has been seeing a growing wave of chemical recycling investments since early 2024. In fact, many U.S. companies are actively evaluating or building chemical recycling assets, especially focused on polyolefins (pyrolysis to cracker feed) and PET/film (solvent or depolymerization).
“However full-scale, bankable plants with long term stable economics are few and the ‘early pioneers’ are being scrutinized to prove uptime and yield,” said Gaurav Shah, managing partner at Trident Renewables. “Regulatory frameworks and recycled-content mandates are less uniform than in the EU, which also slows adoption.”
Anthony Perrotta, sustainable packaging expert at PA Consulting, said that the terms “chemical recycling” and “advanced recycling” are often used interchangeably, but they are not the same. Chemical recycling is a subset of advanced recycling that uses chemical processes to break down plastic waste into its molecular building blocks.
“This can include pyrolysis, gasification and depolymerization – the goal being the creation of virgin-quality plastic from waste, suitable for food-grade and high-performance applications,” Perrotta said. “Advanced recycling is a broader term that includes chemical recycling and other innovative technologies beyond traditional mechanical recycling, like solvent-based purification and enzymatic recycling. Typically, the goal here is to expand the types of plastics that can be recycled and improve the quality of recycled materials.”
There are also highly fragmented state level regulations surrounding chemical recycling of plastics. According to Perrotta, several states have passed laws defining chemical recycling as a manufacturing process rather than waste management. This classification allows facilities to bypass stricter environmental regulations typically applied to waste treatment plants, making it easier to build and operate them.
“The big debate is whether chemical recycling is considered recycling or waste to fuel,” Perrotta said. “Across the board, there’s a growing concern around the health implications of the chemistries used and energy required for chemical recycling.”
“Breaking down plastics at a chemical level (instead of melting them) goes back to late 1950s. Early research was focused on PET and nylon depolymerization, but the initial efforts couldn’t help scale-up the technology or address the economic viability,” said Gaurav Shah, managing partner at Trident Renewables. “We finally are now in the early commercialization phase thanks to improving technologies, high purity product, growing market demand, consumer awareness and the launch of carbon credits in the plastic recycling space. Introduction of Waste Collection Credits (WCC) and Waste Recycling Credits (WRC) is strengthening the feasibility potential of chemical recycling projects by creating a significant revenue monetization.”
According to Dr. Rachel Meidl, fellow in energy and sustainability and deputy director, Center for Energy Studies at Rice University’s Baker Institute for Public Policy and strategic advisor on circular economy for MSCI, Inc., the origins of chemical recycling of plastics date back to the mid-20th century, when scientists and companies began exploring methods to break down plastic polymers into their chemical building blocks.
“In the 1980s and 1990s, several pilot- and demonstration-scale pyrolysis facilities for mixed plastic waste were built, but early systems struggled with scalability and economic viability due to technical inefficiencies in product quality, feedstock contamination, high capital costs, operational complexity and limited markets,” Meidl said. “While some of today’s advanced recycling technologies can be traced back to these early foundations, advances in process design, catalysis and separation technologies have greatly expanded the range of plastics that can be processed, with improved yields of commercial products, and with far greater efficiency.”
Ongoing Concerns
As Meidl explained, some thermal conversion processes, such as pyrolysis and gasification, may produce fuels rather than new materials. This raises questions about how these outcomes fit within recycling definitions and circular-economy goals.
Uncertainty also exists around feedstock quality, yields and energy intensity across different processes, as well as how these factors influence real-world environmental outcomes. In addition, varying regulatory definitions of “recycling” and how outputs count toward recycled-content targets can affect policy, investment and community perspectives.
While mechanical processes are effective for certain clean, single-polymer streams, they face challenges with mixed, contaminated or multi-layer plastics. Chemical recycling can complement mechanical recycling in processing these materials and returning them to monomers or feedstocks comparable to virgin-quality inputs, helping conserve resources and strengthen supply chains.
“There are common misconceptions about the technology itself,” Meidl said. “One is that chemical recycling is a single technology or a complete solution to plastic waste. In reality, it includes several approaches – such as dissolution, depolymerization, and thermal conversion – that differ in feedstock flexibility, efficiency and environmental profile. It functions best as a complement to mechanical recycling and other upstream strategies, rather than a replacement for them.”
Shah pointed to a series of benefits of chemical recycling of plastics. These include:
- High-purity product – Certain chemical recycling pathways are able to deliver monomers or resins that can meet the specifications of virgin plastics.
- Access to waste feedstocks – Chemical recycling offers a means to valorize polymers (think of multi-layer films or heavily contaminated streams) that otherwise can’t be processed with mechanical recycling and are discarded in landfills with no further use.
- Aligning with circular economy – For corporate sustainability goals and brand commitments, chemical recycling is fast becoming a complementary technology.
- Revenue maximization – Chemical recycling business can receive tipping fees (for accepting difficult waste plastic streams) as well as premium pricing for certified recycled output. Combined together, they can considerably improve the economics over conventional “waste disposal” business models.
Some of the controversies surrounding chemical recycling of plastics include:
- Energy consumption – Technologies like pyrolysis or gasification are energy and emissions intensive. When powered by fossil energy the claimed circular benefits unfortunately weaken.
- Credibility – If the output from a chemical recycling facility ends up as a fuel rather than polymer, critics sometimes argue that the “recycling” label is misleading.
“We see mechanical and chemical recycling as complementary tiers and not a binary choice,” Shah said. “Most high-volume and low-cost materials will go for mechanical recycling while chemical routes capture complex waste streams and residuals that can generate high value finished goods.”
Chris DeArmitt, founder and president at the Plastics Research Council and author of Shattering the Plastics Illusion, said that chemical recycling, although energy intensive, is able to create plastic that is as pure as virgin plastic. Mechanical recycling cannot do that, although what it does produce is still of high quality and is FDA approved for food contact in many cases.
“You may have seen that there are huge, highly funded projects to create new types of recycling. These are so-called advanced recycling methods, such as chemical recycling (breaking the polymer down into its starting materials), or dissolving the plastic in solvent, or pyrolysis, where the plastic is heated and converted into oils or monomers (the building blocks of plastics), DeArmitt said. “The perception is that we are waiting for advanced recycling to make plastics green, when in reality, standard mechanical recycling works just fine for about 90 percent of the plastic types we use, such as polyethylene, polypropylene, PET and PVC. These other more expensive, more complex approaches to recycling may eventually have a place in the future, but they are not the key to success.”
As DeArmitt explained, mechanical recycling is proven to be cheap and the best, environmentally speaking. Plus, it uses standard machinery already installed all over the world as extruders are used to process new plastics too.
On the Forefront
Chemical recycling is expanding globally, though adoption varies by region. Meidl pointed out that the Asia-Pacific region has led development, driven by manufacturing growth, policy pressure for circularity and large-scale plastic production and consumption. Europe has also seen strong investment supported by regulatory frameworks, although the overall volume of chemically recycled plastics remains small compared to total plastic output.
In the United States, companies are transitioning from pilot projects to commercial scale operations,” Meidl said. “Several large facilities are operating or under construction, while others are in early phases of scaling. Continued progress depends on factors such as feedstock supply, market offtake, clear definitions of recycling and long-term commercial viability.”
Looking ahead, Meidl said the future development of chemical recycling will depend on policy alignment, data transparency and cross-sector collaboration. Integrating chemical recycling with upstream strategies – such as reduction, redesign and reuse – will be important to achieving long-term circularity.
“Pyrolysis technologies for plastic waste have reached early commercial-scale deployment in some markets, but their long term viability remains constrained by many factors,” Meidl said. “The chemical recycling industry is expected to advance as technology improves and the demand for circular solutions increases. It can continue to serve as a complementary process to mechanical recycling, extending recovery options for materials that are difficult to manage mechanically. Mechanical recycling is effective for clean, homogenous plastics like PET and HDPE, while chemical recycling can process contaminated, composite and multi-layer materials that would otherwise be landfilled or incinerated.”
Shah envisions an integrated platform, specifically a strategic shift from “recycling” to “refining” approach.
“There could be more facilities that combine mechanical recycling plus dissolution/depolymerization plus pyrolysis/gasification under one site,” Shah said. “Mechanical recycling would manage the bulk plastics, solvent/depolymerization addresses high-value polymers and gasification/pyrolysis could well capture the residuals.”
Shah also expects that spec definitions for outputs (e.g., pyrolysis oil with
“We have seen investors increasingly demand upfront spec design, third-party verification and performance guarantees. We expect this to streamline and become a norm as this space evolves,” Shah said. “Also, to satisfy brand offtakers and ESG frameworks, facilities will need ISCC+ mass-balance systems, digital chain of custody and real-world LCA data. Investors might discount claims that don’t deliver transparent carbon intensity (CI) and material displacement numbers. Finally, sorting, de-halogenation, density separation and contaminant removal are increasingly turning into value-drivers. Plants that secure feedstock contracts plus pre-treatment hubs will gain an upper hand.”
Published December 2025