Two U.S. chemical recyclers have announced delays to major investments in the emerging technology, amid a challenging demand environment and funding concerns.
In its most recent earnings call, LyondellBasell said it was deferring a final investment decision for a second chemical recycling plant, planned for the site of its shuttered refinery near its Houston headquarters. Even so, investment in the company’s first commercial-scale recycling plant in Cologne, Germany, continues as planned, said CFO Agustin Izquierdo during the quarterly update on Aug. 1.
Nevertheless, the company’s “strategy in Europe is to increasingly focus our production on recycled and renewable feedstocks to produce profitable and sustainable solutions to serve the local markets,” said CEO Peter Vanacker during the call. “Recycled and renewable feedstocks sourced in Europe are expected to be cost advantaged relative to other regions in the world.”
He added that profit margins for pyrolysis technology, which LyondellBasell uses to recycle polyolefins, “continue to be extremely high” due to demand outstripping supply, even if the increase in recycler bankruptcies might indicate otherwise. “There has been a lot of delays, I mean, in start-up companies. Some start-up companies actually went belly up as well. And therefore, we continue to believe that this will be a growth market.”
Vanacker attributed rising demand for recycled content to the European regulatory environment, as well as “positive momentum” in U.S. legislation, though he acknowledged it is primarily at the state level. “This is a business that we continue to believe in that will have price setting based upon value-based pricing and not so much supply and demand, simply because supply is going to lag demand for quite a long period of time.”
And although in the past few years LyondellBasell has bought several smaller recycling operations, given the unfavorable economic climate for capital investment, “we continue to monitor the markets, but there is nothing concrete that I can say in terms of M&A,” Vanacker said.
Eastman
Eastman Chemical is delaying its second U.S. methanolysis plant for two years, as it appeals the revocation of a key federal grant and explores capacity expansions at its flagship site in Tennessee and other locations, CEO Mark Costa said during an investor call Aug. 1. The second chemical recycling unit for PET, planned for Longview, Texas, was previously expected to break ground late this year.
The company is focusing its strategies on factors that are “to some degree, in our control,” Costa said, acknowledging that the ongoing economic downturn and tariff-related chaos were not among those items.
“We are certainly not happy about losing the DOE grant, and we’re highly engaged to try and get it back,” Costa said. “That’s a highly uncertain process, and so we’re focusing on what else can we do.”
In addition, Eastman has identified several ways to significantly reduce the plant’s capital requirements in both scope and location, looking both at Longview and “three other sites where we might have some better advantages,” Costa said.
He cited the macroeconomic slowdown as a contributing factor to the decision to delay the plant. “Given the continued slow demand in consumer durables and our focus on controlling capital, we slowed the pace of construction to manage the platform responsibly,” Costa said. Nevertheless, he maintained that regulatory frameworks will continue to drive demand in both North America and Europe.
Eastman still expects to increase RPET volumes going into food-grade packaging applications in the second half of the year, with “commitments from a number of leading fast-moving consumer goods companies for significant ramp-up in volumes in 2026,” Costa said, and “we are seeing evidence that some brands are struggling to meet their performance requirements with mechanical recycling as they move to higher recycled content.”
One key customer is PepsiCo, which in 2022 signed an offtake agreement with Eastman. “Our contract with Pepsi is still intact and we’re still confident that they’re committed to working with us as we sort of pursue all these different options,” Costa said. “So we feel sort of good about that.”
