A new report from Bain & Company has found that Europe’s chemical recycling sector requires more than €400 billion in cumulative capital expenditure (capex) to reach cost parity with virgin plastics production—a milestone that could take 20 to 30 years to achieve.
Currently, the cost of recycling polyolefins—a widely used class of plastics—remains more than twice that of producing them from virgin materials. This price gap, combined with limited market demand and low recycling volumes, is hindering the sector’s growth despite ambitious corporate sustainability targets and upcoming regulatory requirements.
The Bain report argues that policy intervention will be essential to bridge the gap. Similar to renewable fuel blending mandates, gradual, region-specific obligations for recycled plastic use could slowly increase market penetration, potentially reaching over 15% by 2040. This phased approach could ensure manageable capital demands while delivering viable returns for early movers.
“Chemical recycling could become competitive once cumulative global volume hits 650 million metric tons of recycled polyolefins,” said Mark Porter, head of Bain’s global Chemicals practice. “At that point, recycled plastic could serve up to 30% of total global plastic demand.”
Chemical recycling could become competitive once cumulative global volume hits 650 million metric tons of recycled polyolefins…
To get there, the sector would need a coordinated effort—combining regulatory support, customer incentives, and industry collaboration. The estimated €270 billion cost premium includes higher prices, government subsidies, and temporary margin sacrifices from players across the value chain.
Bain outlines three key strategies for companies aiming to lead this transition:
- Secure early-mover advantage by co-developing offtake agreements and locking in valuable feedstock.
- Shape the policy environment through proactive engagement with regulators and public narrative around plastics’ sustainability potential.
- Adopt flexible, experimental business models including long-term contracts and cross-sector partnerships to build future-ready supply chains.
The report concludes that while the path to cost-competitive chemical recycling is long, decisive action today could position companies for significant market and environmental gains in the decades ahead.