INSIGHT: The effects of recycling legislation on chemical recycling
Joshua Dill
03-Mar-2025
HOUSTON (ICIS)–Navigating the complex maze of US recycling laws is no small feat, especially as state regulations vary significantly. With chemical recycling at the forefront of innovation, understanding how these laws impact the industry’s growth is crucial for shaping a sustainable future.
INTRODUCTION
The
legislative landscape in the US is highly
fragmented, largely due to the wide range of
legislative enactments passed across the
different states. Three major categories of
recycling laws affect chemical recycling:
chemical recycling acceptance laws,
post-consumer (PCR) content laws and extended
producer responsibility (EPR) laws. Each of
these legislative frameworks will influence the
development of the chemical recycling industry
in their unique way, highlighting the
complexity of navigating this evolving
regulatory environment.
Chemical recycling is an umbrella term that encompasses a variety of different processes designed to break down plastic at a molecular level. These processes reverse-engineer plastics, breaking them down into their original building blocks, which can then be reused to create new materials.
There are two primary categories of chemical recycling: thermal depolymerization and chemical depolymerization. While both methods target plastics at a molecular level, their approaches differ fundamentally. Thermal depolymerization relies on high heat to break down plastics, whereas chemical depolymerization employs specialized agents to achieve the same outcome.
Each category includes specific processes:
- Thermal Depolymerization (TD): Includes pyrolysis (breaking down plastics into oil and gas through high heat and low oxygen) and gasification (converting plastics into syngas through higher temperatures and oxygen or steam). These processes typically favor polyolefins as feedstock – mainly polyethylene (PE) and polypropylene (PP).
- Chemical Depolymerization (CD): Includes glycolysis, methanolysis and hydrolysis, which involve chemical reactions with agents like glycol, methanol, or water to depolymerize plastics. These processes typically favor polyethylene terephthalate (PET) as feedstock.
CHEMICAL RECYCLING ACCEPTANCE
LAWS
The acceptance of chemical
recycling in state legislation typically
involves defining chemical recycling as a
manufacturing process, rather than categorizing
it as waste management. This means that
chemical recycling plants in the state will not
have to adhere to the same strict environmental
guidelines as waste management facilities,
incentivizing the construction of more
facilities. It also potentially opens the door
for chemical recyclers to access government
resources – eg, grants, tax benefits –
allocated for manufacturing in those states.
Which states have accepted
it?
As of late 2024, exactly half
of the US states have recognized chemical
recycling as a manufacturing process.
Source: ICIS
This gradual legislative acceptance reflects growing awareness of the potential for chemical recycling to address plastic waste challenges.
What are the effects of state-by-state
acceptance?
The acceptance of
chemical recycling on a state-by-state basis,
rather than at a federal level, is a
double-edged sword. On one hand, when a state
legitimizes chemical recycling, it strengthens
industry sentiment, while on the other, it
further fragments the chemical recycling
industry.
The incorporation of chemical recycling into legislation began in Florida in 2017, paving the way for other states to follow. The first significant wave of legislative approvals occurred in 2019, leading to a surge in chemical recycling facility start-ups the following year. This pattern repeated with another wave of legislative acceptances in 2021 and 2022, followed by a spike in facility start-ups in 2023. The chart below provides a detailed visualization of this trend.
This trend signals that the acceptance of chemical recycling has positive effects on the industry, serving to drive growth and incite innovation.
The acceptance of chemical recycling also presents the challenge of varying perspectives across states. Firstly, there is a divide between the states that have accepted chemical recycling as a manufacturing process and those that have not. Secondly, among the states that have accepted chemical recycling, there are a few states that explicitly exclude certain processes.
For example, states such as Kentucky and Kansas are among those that exclude processes that turn plastic to fuel. One example of this can be seen in the State of Kentucky’s HB 45, which states, “‘Advanced recycling’ does not include energy recovery or the conversion of post-use polymers into fuel.” Similar language can be found in the State of Kansas’ SB 114, “‘Advanced recycling’ does not include incineration of plastics or waste-to-energy processes, and products sold as fuel are not recycled products.”
In effect, wording such as this essentially excludes thermal depolymerization process as being considered a type of recycling while recognizing chemical depolymerization process, creating a further divide even among those states that have chosen to accept chemical recycling. The lack of uniformity in how chemical recycling is addressed adds confusion to the legislative landscape.
POST-CONSUMER RECYCLING CONTENT
LAWS
In addition to chemical
recycling-specific legislation, other laws,
such as PCR content mandates, indirectly
influence the industry. PCR laws require that a
minimum percentage of recycled material be
included in certain types of packaging sold
within a state.
How many states and what are the
effects on chemical
recycling?
Currently, five states
– California, Maine, Connecticut, Washington
and New Jersey – have enacted PCR laws.
However, none of these states are among the 25
mentioned above that have formally accepted
chemical recycling into legislation. This fact
means that it is often unclear if outputs from
chemical recycling are ineligible to count
toward PCR requirements, undermining the
industry’s potential impact and growth.
A notable exception exists in Washington, where its PCR law explicitly states: “Both mechanical and chemical recycling methods are acceptable.” This language demonstrates a more inclusive approach, contrasting with states like California and Maine, which remain cautious about embracing chemical recycling.
The contrasting viewpoints held by states that have PCR content mandates is another example of lack of uniformity in chemical recycling-related legislation.
EXTENDED PRODUCER
RESPONSIBILITY
EPR is another
regulatory framework gaining traction in the
US. EPR shifts the responsibility for managing
a product’s entire lifecycle from consumers to
producers, with a particular focus on
end-of-life management. Under EPR laws,
producers that meet a certain requirement –
usually large producers that put considerable
amount of plastic onto the market – are
obligated to join a producer responsibility
organization (PRO) to help finance the
collection, recycling, or disposal of their
products.
How many states and what are the
effects on chemical
recycling?
EPR policies are
currently implemented on a state-by-state
basis, with Oregon leading the way by releasing
a detailed plan. However, the relationship
between EPR and chemical recycling remains
complex. A key issue lies in how EPR laws
define acceptable “end markets” for collected
plastics.
Oregon’s definition of responsible end markets appears tailored to traditional mechanical recycling, inadvertently excluding many chemical recycling technologies. This exclusion stems from the varied outputs of chemical recycling, which can range from plastics to fuels or chemical precursors, complicating their classification as traditional recycling.
Without clearer language recognizing the potential of chemical recycling as an end market, EPR laws add another layer of ambiguity to chemical recycling.
CONCLUSION
The regulatory
landscape surrounding chemical recycling
remains highly fragmented, with varying degrees
of acceptance and restrictions across states.
While the recognition of chemical recycling in
state legislation correlates with industry
growth, inconsistencies in how it is defined
and regulated create challenges for accelerated
growth.
Further complicating the landscape, PCR content mandates and EPR laws introduce additional uncertainties, as their definitions often exclude or fail to clarify the role of chemical recycling. This uncertainty can manifest as a lack of investment, both from chemical recyclers who will be hesitant to commit capital to new plants, and from investors wary of funding projects without clear long-term policy support.
As the industry continues to develop, greater legislative uniformity and clearer regulatory frameworks will be necessary to unlock the full potential of chemical recycling as a viable solution to plastic waste management.
Insight article by Joshua Dill
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