EU's Mass-Balance Approach Yet to Spark Chemical Recycling Investments
The EU's mass-balance approach, presented in July 2025, has yet to spur European industrial partners to announce increased investments in pyrolysis oil plants. However, the approach could renew investment in chemical recycling later this year.
In early July, the EU introduced its mass-balance accounting approach. While this could encourage investment in chemical recycling, there are currently no public announcements of increased investments in pyrolysis oil plants by European industrial partners.
OMV's CEO has stated that a more secure regulatory environment is needed before further investment in chemical recycling facilities. Investment decisions in 2024 and the first half of 2025 were delayed due to uncertainty over the EU's approach. The Commission is reviewing proposals and aims to adopt them under an implementing decision in Autumn 2025.
The inclusion of chemical recycling in the End-of-life Vehicles Regulation (ELVR) and Packaging and Packaging Waste Regulation (PPWR) targets remains uncertain. The EU proposed a fuel-exempt approach to pyrolysis oil, with a consultation period ending on 19 August. Legislation surrounding renewable fuels is clearer, encouraging the use of pyrolysis oil as fuel under the Fit for 55 package.
Pyrolysis is expected to be the world's largest chemical recycling technology by capacity. Europe's plastic-derived pyrolysis oil installed input capacity is approximately 150,000 tonnes/year. However, legislative doubts remain, negatively impacting demand and investment decisions, including definitions of waste and recycling under Directive 2008/98/EC.
While the EU's mass-balance approach could renew investment in chemical recycling, no European industrial partners have yet announced increased investments in pyrolysis oil plants. Clarity on regulations and targets is needed to boost demand and investment in this sector.
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