Chemical recycling and plastic credits: pyrolysis, gasification, and solvolysis

Why chemical recycling matters for plastic credits

Mechanical recycling — the shredding, washing, and re-pelletising of sorted plastic waste — can only process relatively clean, single-polymer streams. Multi-layer films, heavily contaminated packaging, and mixed plastic fractions that constitute a significant proportion of real-world post-consumer plastic waste are typically unprocessable by mechanical methods. Chemical recycling addresses this gap: it converts residual and mixed plastic into usable products through thermal or chemical processes that break down polymer chains at a molecular level. For the plastic credit market, this is significant because it expands the range of plastic that can generate credits — particularly the most problematic waste categories such as multi-layer sachets, flexible film, and polystyrene foam that cause the most persistent environmental damage when mismanaged. Three principal technologies underpin chemical recycling projects seeking credit issuance under Verra's VM0046 methodology.

The three technologies

Pyrolysis subjects plastic waste to temperatures of 400 to 600 degrees Celsius in an oxygen-free or low-oxygen environment, causing thermal decomposition of polymer chains. The primary output is pyrolysis oil — a hydrocarbon mixture comparable to crude oil — which can serve as a feedstock in petroleum refinery cracking units, displacing virgin naphtha in the production of new plastic monomers. Commercial pyrolysis operations include Plastic Energy (Spain and Netherlands), reCLEAN Technologies (Indonesia and Philippines), and Quantafuel (Denmark). Plastic-to-oil conversion rates for polyethylene and polypropylene feedstocks range from 65 to 80 percent by mass. Pyrolysis is the most commercially mature chemical recycling technology and dominates the current pipeline of VM0046-registered projects.

Gasification subjects plastic waste to partial oxidation at temperatures of 700 to 1,200 degrees Celsius, producing synthesis gas (syngas) — a mixture of hydrogen and carbon monoxide usable for energy generation, liquid fuel production via Fischer-Tropsch synthesis, or chemical feedstock applications. Gasification's key advantage is its greater tolerance for mixed, contaminated, and wet feedstocks, including halogen-containing streams that would damage pyrolysis reactors. The trade-off is lower energy efficiency and 30 to 50 percent higher capital cost per tonne of processed plastic relative to comparable pyrolysis capacity.

Solvolysis uses chemical agents — acids, bases, alcohols, or pressurised water in hydrolysis — to break polymer bonds and recover individual monomers for re-polymerisation into virgin-equivalent plastic. Unlike pyrolysis and gasification, which produce hydrocarbon mixtures, solvolysis can deliver a genuine closed-loop outcome: plastic in, plastic-grade monomer out. Commercial solvolysis is currently limited to specific polymer-solvent combinations: PET glycolysis (Carbios, Eastman) and PA6 hydrolysis. Polyolefins — the dominant plastic packaging polymers — are not yet amenable to commercial-scale solvolysis, limiting its near-term contribution to credit supply.

VM0046 and the circular economy debate

Verra published VM0046 (Plastic Waste Reduction through Chemical Conversion Processes) in 2023, establishing the crediting framework for these technologies. VM0046 introduces three requirements beyond VMR0006: lifecycle emissions accounting (quantifying and subtracting process energy inputs and combustion emissions from the gross credit yield), output fate documentation (distinguishing whether conversion outputs are used as feedstock or fuel, with different accounting treatments for each), and additionality for the conversion operation itself. The lifecycle emissions accounting requirement is critical: projects using renewable energy for process heat achieve the most favourable credit yield per tonne collected; coal-powered facilities in carbon-intensive grids face significant credit deductions. The output fate distinction creates an incentive for projects to establish supply chain agreements with refineries using pyrolysis oil as a cracking feedstock (full recycling credit) rather than blending it into fuel streams (partial credit). The central controversy — raised by environmental groups including Break Free From Plastic and Zero Waste Europe — is whether pyrolysis-to-fuel pathways constitute recycling at all, given that plastic carbon is ultimately combusted and released as CO₂. Verra's position is that any verifiable diversion from open burning, dumping, or waterway leakage constitutes a meaningful environmental improvement eligible for credit issuance. The EU PPWR's recycled content targets currently count chemical recycling only where output is used as a plastic production feedstock — a distinction that, if adopted more widely, would bifurcate the chemical recycling credit market into a feedstock-circular tier and a waste-diversion-only tier with different valuations.