New Research – Chemical Recycling Industry in Europe May Require €400B to Be Competitive Against Virgin Plastic Production
Environmental consultancy firm Bain and Company have released a report stating that Europe’s chemical recycling industry requires over €400 billion to compete with the production of virgin plastics.
The report suggests that cost parity with virgin plastic production could be reached within 20 to 30 years and highlights a current window of opportunity for plastics companies to act early and gain significant competitive advantages.
As an example, recycling polyolefins (a widely used type of thermoplastic) in Europe currently costs more than double the price of producing new, virgin material.
Further key points from the report:
- Market forces alone are not enough: Low customer willingness to pay and limited recycled volumes prevent economies of scale.
- Policy intervention is essential: Gradual mandates for recycled content (1–2% per year) could help scale the industry to a 15% market share by 2040.
- Technology improvements and experience will lower costs over time, potentially making chemical recycling competitive when global cumulative volumes hit 650 million metric tons.
- Achieving cost parity with marginal producers in Europe would require at least €400 billion in cumulative global capital investment under baseline assumptions. This effort carries a total cost premium of around €270 billion, reflecting a combination of customer-paid price premiums, regulatory support, and margin contributions from across the value chain.
Strategic recommendations for plastics producers:
- Secure early-mover advantage by forming long-term partnerships and locking in premium waste streams.
- Influence policy and public perception, working closely with regulators and reframing the narrative around plastics.
- Adapt and innovate through flexible business models, creative contracts, and unconventional partnerships.
You can access the press release here, which also includes a link to the report.