In a new report, Systemiq encourages the European Union to clarify policies and boost market confidence to develop fossil-free plastics at scale, particularly for the green-methanol-to-olefins (MTO) process.
Almost 80% of plastics produced in Europe are thought to utilize virgin fossil feedstocks. Between now and 2050, its plastic production and disposal practices are feared to drive a 30% increase in carbon emissions, emitting up to 180 Mt of CO2 equivalent per year by 2050.
Even as the EU implements plastics reduction, reuse, and recycling initiatives, Systemiq believes that these would only meet up to 50% of plastics demand by 2050 – still requiring approximately 28 million tonnes of virgin plastics every year.
Its report, titled Fossil Free Plastics: Driving Clean Industrial Leadership in Europe and commissioned by Vioneo, proposes the solution of accelerating the production of fossil-free virgin plastics at scale, including MTO.
According to Systemiq, MTO is a ‘scalable, drop-in production pathway’ that utilizes sustainable biomass, captured biogenic CO2, and other sources of renewable carbon to produce recyclable polyethylene and polypropylene. This process is expected to lower emissions by around 5 tonnes of CO2 equivalent per tonne of plastic produced, or up to 7 tonnes in optimal conditions.
At the same time, it is said to unlock ‘fully segregated’ supply and traceability for improved credibility, customer assurance, and compliance with emerging policy – a ‘strategic advantage’ with advantages over traditional mass-balancing approaches – and to match the cost of abated fossil production due to falling green methanol prices and carbon pricing.
The resultant plastics are reportedly compatible with existing infrastructure and offer a similar performance to fossil-based alternatives.
In Europe, MTO is hoped to lessen the continent’s reliance on fossil imports, improve supply chain resilience, and boost the retention of skilled jobs in the chemical and plastics sector. Systemiq foresees up to €30-40 billion in new investment and green methanol demand, as well as improved protection against deindustrialization.
Additionally, fossil-free plastic production is described as a ‘key pillar of a competitive, circular and climate-aligned European plastics system’.
While the report identifies ‘first-of-a-kind’ projects approaching final investment decisions, it also finds that a broader sense of regulatory and uncertainty and commercial risks are slowing progress -leading to a call for clearer policies and improved market confidence.
Systemiq underlines four priority areas for further action, including mobilizing early-adopter customers – especially those in ‘high-spec’ sectors like food packaging – to make commitments and launch the first commercial projects.
Fossil-free plastics should also be forefronted as a ‘strategic priority’ in the EU’s upcoming industrial and climate frameworks, the report suggests. Clear policy signals are expected to increase market and investor confidence.
It goes on to argue that green methanol-based plastics should be legally defined; carbon accounting rules should be harmonized; and fossil-free criteria should be integrated into key EU policies. These steps are anticipated to establish the necessary market foundations.
Finally, Systemiq encourages the introduction of demand-side targets, carbon pricing criteria to level the playing field, and public funding to lower the risk of early investments – all of which is hoped to support the structural market.
“Plastics are essential to modern economies – but current production and disposal systems drive emissions, pollution, and industrial risk,” explains Sophie Herrmann, partner at Systemiq. “This report builds on our previous modelling of plastics and chemicals systems, where MTO has consistently emerged as a high-potential pathway.
“It shows how fossil-free plastics can cut emissions, offer full traceability, and strengthen Europe’s clean tech leadership. No solution is without trade-offs, but this approach stands out for its balance of climate impact and industrial feasibility – and deserves a central role in Europe’s transition strategy.”
“This report shines a light on a blind spot in the plastics transition,” continues Alex Hogan, CEO of Vioneo. “Recycling is vital—but it isn’t the whole answer.
“Fossil-free plastics fill the gap, and in doing so, offer a lifeline for Europe’s chemicals and plastics industries to turn today’s energy, climate and supply chain risks into tomorrow’s competitive edge.”
Aurel Ciobanu-Dordea, director for Circular Economy at the European Commission (ENV), adds: “As the Commission puts the Clean Industrial Deal into action and develops its bio-economy strategy, we welcome this report as both timely and useful in providing new analysis, insights and ideas for us to consider.’’
Our editor at large, Elisabeth Skoda, recently sat down with Vioneo’s chief commercial officer, Katja Wodjereck, to learn more about the green-methanol-to-olefins process. She asserted that the process utilizes biomass from forestry or agricultural waste, among other non-food sources, and saves up to six kilograms of CO2 for every kilogram of plastics.
Our upcoming webinar with Vioneo will also cite Systemiq’s study in its exploration of potential avenues to drive clean industrial growth in Europe; click here to register to attend.
In other news, Systemiq, Borealis, and Clean Rivers are jointly working on Project STOP, an Indonesia-based circular waste management scheme. Collaborating with the national and local governments and municipalities, the project aspires to develop and implement effective circular waste management systems and waste management services for Indonesian households; improve Indonesia’s waste management system via plastic reduction and reuse initiatives; urge policymakers to develop innovative waste management policies; and more.
If you liked this story, you might also enjoy:
The ultimate guide to the Packaging and Packaging Waste Regulation in 2025
How are the top brands progressing on packaging sustainability?
Everything you need to know about global packaging sustainability regulation in 2025
The key to increasing the use of reusable packaging in supermarkets
No comments yet