Chemical recycling: a new toolbox for materials recycling in industry and the application of the mass balance chain-of-custody approach

Abstract

The chemical sector continues to rely predominantly on fossil-based carbon sources, resulting in substantial waste generation throughout its value chains and contributing notably to greenhouse gas emissions. Increasing circularity in chemical value chains is therefore critical to meet climate and sustainability objectives (SDG 12, SDG 13), but progress is constrained by heterogeneous waste streams, limited recycling infrastructure, and unclear accounting rules for recycled feedstocks. This paper assesses the technical potential, economic implications and governance requirements of chemical recycling and mass balance chain-of-custody (CoC) models to scale the use of waste-derived feedstocks in integrated petrochemical systems. Using a literature review we characterise technology trade-offs and introduce a Cost Multiplier Index (CMI) to quantify how proportional versus non-proportional mass balance attribution affects off-taker costs. We also evaluate policy and Monitoring, Reporting, and Verification (MRV) implications considering current EU regulatory developments (e.g., SUPD) and certification schemes (ISCC PLUS, REDcert2). Key findings are: (1) no single recycling technology fits all waste types—mechanical recycling is most effective for clean single streams, while chemical and thermochemical routes are required for mixed or contaminated wastes; (2) mass balance CoC enables rapid scale-up of recycled feedstock use without expensive physical segregation, but attribution rules and credit losses materially affect downstream costs and commercial viability; (3) the CMI demonstrates strong economic sensitivity – strict proportional attribution can substantially increase off-taker costs compared with targeted non-proportional approaches; and (4) robust MRV, third-party verification and clearly specified regulatory rules (including treatment of fuel use) are essential to avoid double counting, limit leakage and mobilise investment. Well-designed mass balance frameworks, combined with technology-open policy and harmonised MRV, can unlock significant volumes of recycled feedstock and accelerate the chemical industry's transition to a more circular, low-carbon future. These outcomes support SDG 12 (responsible consumption and production) and SDG 13 (climate action).