INTERVIEW: Plastic Energy sees regulatory push as driver for chemical recycling

Regulatory support is vital for the European chemical recycling industry, which is currently undergoing a transition period as petrochemical producers face a downcycle, said Ian Temperton, CEO of UK-headquartered chemical recycler Plastic Energy.

In an exclusive interview with Platts, part of S&P Global Energy, on Feb. 6, Temperton discussed upcoming regulatory matters, particularly the EU-wide end-of-waste criteria for plastic waste.

With the consultation period already concluded Jan. 26, Temperton said Plastic Energy supports the need for environmental regulations, which the chemical recycling industry heavily depends on. However, he identified areas of the draft rules that needed to be changed from his perspective.

Temperton said Plastic Energy believes the draft rule, as it stands, does not address the production route for pyrolysis technology, as it only discusses recycling technologies that produce final products, such as mechanical and dissolution-based recycling. Temperton explained that since pyrolysis technology produces pyrolysis oil, which is treated and fed into steam crackers for further production of chemicals and polymers, the draft rule currently limits the recycling potential and is overly technical in defining what qualifies as end-of-waste in the EU. Temperton also said the draft rule risks retrospectively redefining end-of-waste plant status, which already exists for facilities handling end-of-waste.

Temperton said the wave of rationalization and consolidation in the European petrochemical industry is unlikely to affect the company's current market position. "The good news for us is that, at our production level -- measured in thousands and tens of thousands of tons -- we are still a nascent industry," he said. "A reducing cracker fleet in Europe is still measured in millions, or even tens of millions, of tons, so the place we put the pyrolysis oil isn't going away."

Temperton said that while Plastic Energy's output is modest, the broader consolidation reflects the challenges in the competitiveness of European petrochemicals. He said that partners for pyrolysis plants or the pyrolysis oil's offtakers are not always best positioned to make such investments, and regulatory uncertainty delays new investments.

Competitive pressure

Nevertheless, he said he sees a silver lining. "It's good that it keeps us all sharp. European petrochemicals are not competitive globally, so if we are to make the system circular, we need to be as efficient and cheap as possible," he said. The competitive pressure, he said, may limit funding for future partners, contributing to project delays.

Temperton sees that the current slowdown is "very much temporary" and that the industry simply needs to be patient, particularly on the policy side, as getting it right takes time. He said Europe is shifting from a market driven by voluntary demand for recycled products over the past three to five years to one underpinned by the Packaging and Packaging Waste Regulation, which creates specific targets for different segments. For Plastic Energy, the contact-sensitive target is crucial as it is the only target that can be served by chemical recycling.

Temperton argued that regulated demand creates more robustness and certainty than voluntary commitments, even though the sector is struggling with the "bit in between." He said he expects the PPWR target to support growth significantly compared to current production, generating substantial demand by the 2030s.

Looking ahead, he is confident the chemical recycling industry will survive and prosper by developing cheaper, more circular and lower-carbon technologies. He said the goal is to scale up recycling rates to approach 100% and reduce emissions to zero over time.

Plastic Energy operates industrial-scale pyrolysis plants, with two 5,000 mt/year facilities in Almeria and Seville, Spain, that opened in 2016 and 2017, respectively. Temperton said the plants are currently producing in the thousands of tons range, and described 2025 as a "very good year" for the company. The plants primarily sell pyrolysis oil to European steam crackers, he said.

Temperton said that its newly started joint venture with SABIC in Geleen, the Netherlands, is in the ramp-up stage, but did not clarify the future of the plant, given that SABIC has said it will sell its steam cracker in Geleen to venture capital firm AEQUITA, expected to be completed by the end of 2026. The 20,000 mt/year JV recycling plant finished construction and completed test production in August. It is supposed to produce feed for the cracker.

Plastic Energy has another plant developed with TotalEnergies at the Grandpuit platform. The plant, with a 15,000 mt/year capacity, is progressing well in construction and starting the commissioning process, Temperton said.