Chemical Recycling Faces Cost Challenges as the PET Industry Explores New Circular Pathways

Published on July 22, 2026, the JRC report Economic Viability of Chemical Recycling – Current and Future Perspectives concludes that chemical recycling currently remains significantly more expensive than both virgin plastics and mechanical recycling. However, the report also recognizes that chemical recycling could play a role in meeting future demand for recycled plastics as recycled-content requirements in Europe continue to develop.

Chemical Recycling Remains Cost-Challenged

Chemical recycling uses chemical or thermal processes to break plastic polymers down into smaller molecules, monomers or other chemical feedstocks that can potentially be used to produce new materials.

The JRC assessment focuses primarily on pyrolysis and solvolysis.

Pyrolysis operates at high temperatures in the absence of oxygen and is mainly associated with polymers such as polyethylene (PE), polypropylene (PP) and polystyrene (PS). Solvolysis uses chemical agents or solvents at comparatively lower temperatures and is particularly relevant to polyethylene terephthalate (PET).

For PET, solvolysis can include processes such as glycolysis, methanolysis and hydrolysis, which aim to recover chemical building blocks from PET waste.

According to the JRC, chemical recycling currently does not achieve cost parity with virgin plastics and is expected to remain more expensive in the short to medium term. Costs are affected by factors including waste collection and preparation, energy consumption, process yields, capital investment and plant scale.

For pyrolysis, relatively low material yields can contribute significantly to higher costs. Solvolysis can achieve higher yields in some applications, but this does not necessarily translate into cost competitiveness.

For PET in particular, the JRC concludes that PET produced through solvolysis remains more expensive than both food-grade virgin PET and mechanically recycled PET under current conditions.

Chemical Recycling as a Complementary Route

The findings do not necessarily mean that chemical recycling has no role to play in the future of plastics recycling.

Mechanical recycling remains an established and efficient option for suitable PET waste streams, particularly clean and well-sorted post-consumer bottles. However, waste quality, contamination, additives and material degradation can limit the performance of mechanical recycling for certain feedstocks.

Chemical recycling offers a different approach by breaking polymers down into their chemical components. In principle, these recovered materials can be used to manufacture new polymers with properties closer to virgin materials.

This makes chemical recycling potentially complementary to mechanical recycling rather than a direct replacement.

The issue is becoming increasingly relevant in Europe, where recycled-content requirements under regulations such as the Packaging and Packaging Waste Regulation (PPWR) and the Single-Use Plastics Directive (SUPD) are expected to increase demand for recycled plastics.

Under such a regulatory environment, the market value of recycled materials may not be determined by production cost alone. Feedstock availability, recycled-content requirements, product quality and the ability to process difficult waste streams could all influence the commercial development of chemical recycling.

What This Means for the PET Industry

For the PET industry, the JRC report highlights an important distinction between technical feasibility and economic competitiveness.

Chemical recycling technologies continue to develop, but reducing energy consumption, improving process yields, securing suitable waste feedstock and achieving sufficient production scale will be critical to narrowing the cost gap.

At the same time, mechanical recycling is likely to remain an important part of the PET circular economy, particularly for high-quality bottle-to-bottle recycling.

The long-term recycling landscape is therefore likely to involve multiple complementary technologies, with different solutions serving different waste streams and applications.

Beyond recycling, the industry is also exploring new polyester materials and alternative feedstocks. Polyethylene furanoate (PEF) is one example attracting attention as a bio-based polyester with potential packaging applications. Although still at an earlier stage of development, PEF represents another direction in the broader evolution of sustainable polyester materials.

Wankai's Continued Technology Development

Wankai New Materials is also exploring multiple pathways for the future development of the polyester industry, including PET chemical recycling, enzymatic degradation and bio-based polyester technologies.

In addition to its research into PET recycling, Wankai has advanced research and pilot-scale development of 100% bio-based PEF, while continuing to investigate material performance and processing characteristics.

These efforts form part of Wankai's broader R&D strategy to explore practical solutions across the polyester value chain as the industry moves toward greater circularity and more sustainable material development.

The latest JRC assessment demonstrates that the transition to a circular plastics economy will require more than technological innovation alone. Cost competitiveness, scalability, regulation and feedstock availability will all play important roles in determining which technologies can achieve wider industrial adoption.

For PET, the future is likely to be shaped by a combination of mechanical recycling, chemical recycling, bio-based materials and continued advances in polymer technology.

Source: European Commission Joint Research Centre (JRC), Economic Viability of Chemical Recycling – Current and Future Perspectives, July 22, 2026.