According to Bain & Company, European chemical recycling could take up to 30 years and €400 billion in cumulative global capital to achieve cost parity with virgin material production.
The prediction comes as part of Bain’s Paper & Packaging Report 2026, which encourages businesses to invest in chemical recycling early or feel the impacts of incoming regulations and growing demand.
The company estimates that, in a base case, Europe’s plastics sector could achieve cost parity with marginal producers once cumulative global volume reaches 650 million metric tons of polyolefins recycled via pyrolysis – representing approximately 20% to 30% of the market share of recycled plastics. This assumes a virgin price of €1,250 per metric tons, but gate fees and broader market conditions may change the outcome.
Bain compares the penetration levels to industries like solar and wind energy – but cost parity is expected to require “at least” 20 to 30 years of systematic investments, and may require €400 billion in cumulative global capital expenditures. This comes with a cumulative cost premium of around €270 billion, which encompasses price premiums paid by customers, regulatory mechanisms, and margin investment by the supply chain.
Factors like the price dynamics of virgin polyolefins, the speed at which chemical recycling is developed and adopted globally, and systematic changes for waste management could also influence the timeframe.
Right now, Bain observes that companies are not confident enough in the economics of chemical recycling to invest at scale. In Europe, recycling polyolefins via pyrolysis is over twice as expensive as producing virgin alternatives – and the cost gap is higher in other regions, Bain warns.
“Chemical recycling won’t achieve cost parity with virgin material production through market forces alone, because volumes will be too limited to generate significant cost benefits,” the company explains. “This is a policy-driven market, and current policies likely won’t be sufficient to close the gap between supply and demand.
“Clearly, one company can’t move the sector forward alone; it will require a systems approach with regulatory support. Once scale reaches critical mass, chemical recycling can transition from a subsidy-reliant push to a demand-driven pull. That inflection point could fundamentally shift the economics, turning chemical recycling into a competitive, market-driven solution.”
Maturing technologies and increasing operational experience could be the key to further cost efficiencies, Bain asserts. Some solutions are still in the research and development phase, but developing technologies like hydraulic sorters, laser-induced breakdown spectroscopy, membrane technologies, and enzymatic decontamination are anticipated to bend the cost curve.
This development comes after a progress report from Appleyard Lees recorded an ‘all-time peak’ in chemical recycling for plastics. Apparently, the number of organizations filing patents had more than tripled over five years.
Packaging Europe also dived deeper into the current state – and the potential fate – of the European recycling industry, which has been described as being in ‘crisis’ and at ‘breaking point’ in recent years.
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