Table of Contents

• 1. Why This Debate Matters for Packaging Buyers

• 2. What Is Chemical Recycling? Four Technologies Explained

• 3. Position A: The Case for Chemical Recycling

• 4. Position B: The Case Against (or for Skepticism)

• 5. The Evidence: What Actually Happened in 2024–2025

• 6. The Mass Balance Controversy

• 7. What This Means for Flexible Packaging Specifically

• 8. The Regulatory Picture: EU PPWR and Chemical Recycling

• 9. Where Genuine Uncertainty Remains

• 10. Practical Guidance for Manufacturers Making Packaging Decisions Now

• 11. Frequently Asked Questions

1. Why This Debate Matters for Packaging Buyers

For the past decade, the packaging industry has been told that chemical recycling will solve the problem that mechanical recycling cannot: the end-of-life challenge of multilayer flexible packaging. Aluminum foil retort pouches, multilayer snack bags, lidding films — the complex, mixed-material structures that preserve food — cannot be processed in mechanical recycling streams. Chemical recycling, the argument goes, can handle these materials and close the loop.

This claim has attracted billions of dollars in corporate investment, government grants, and brand sustainability commitments. It has also attracted significant skepticism from environmental researchers, government auditors, and a growing number of industry analysts who track what actually gets built and what actually gets recycled.

For a food manufacturer or packaging buyer in 2026, the question is not philosophical. It is operational: should packaging decisions be made today with the assumption that chemical recycling will be available and credible by 2030? The answer requires a clear-eyed look at what the evidence shows.

2. What Is Chemical Recycling? Four Technologies Explained

Chemical recycling is not one technology — it is a family of at least four distinct processes with very different inputs, outputs, and commercial maturity levels. Conflating them produces analytical errors.

Table 1: Chemical Recycling Technologies — How They Work and What They Produce

Sources: Lux Research (2025); CEFLEX State of Recycling Technologies (2023); Eastman corporate materials; NRDC (2025). ✅ = commercially proven at scale; ⚠️ = pilot or early commercial; ❌ = not commercially proven.

The critical distinction for flexible packaging: only depolymerization (solvolysis) can produce new polymer that directly replaces virgin plastic in the same application. And depolymerization is currently only commercially proven for PET (polyester). The other technologies — which are what most commercial 'flexible packaging chemical recycling' projects use — primarily produce fuel or fuel precursors, not new packaging material.

3. Position A: The Case for Chemical Recycling

Proponents of chemical recycling make several arguments that deserve serious consideration.

3.1 It handles what mechanical recycling cannot

The fundamental argument: mechanical recycling requires clean, sorted, single-polymer streams. The multilayer flexible packaging used for retort pouches, snack bags, and ready-meal packaging is specifically engineered to resist degradation — the same properties that make it an effective food package make it impossible to mechanically recycle. Chemical recycling can theoretically accept contaminated, mixed-material inputs that mechanical sorters reject. For a packaging category with near-zero mechanical recycling rates, any working technology represents progress.

3.2 The Eastman success demonstrates it can work

Eastman's 110,000 t/y Kingsport, Tennessee molecular recycling facility achieved initial production in March 2024 — operational at a scale that makes it one of the largest of its kind in the world. The process (methanolysis) converts polyester waste — including colored bottles, carpet, and clothing that mechanical recyclers cannot process — into dimethyl terephthalate (DMT) and ethylene glycol, which are then repolymerized into virgin-quality plastic. CEO Mark Costa called it 'a key growth driver' and the company projects $75–100 million in incremental EBITDA from the facility in 2025. A second US facility (Longview, Texas) and a French facility (Normandy) are in development.

3.3 ExxonMobil operates pyrolysis at the largest US scale

ExxonMobil's Baytown, Texas facility represents the largest commercial pyrolysis operation in the United States. The company invested in Cyclyx, a joint venture for plastic waste collection and sorting, to address feedstock supply challenges — a supply chain investment that indicates serious commercial commitment. The pyrolysis oil output enters ExxonMobil's existing chemical production infrastructure as cracker feed, producing petrochemical building blocks.

3.4 Mass balance certification is gaining regulatory acceptance

The UK has become the first nation to explicitly accept recycled content through mass balance accounting as qualifying for exemptions from its Plastic Packaging Tax. The European Parliament has moved toward a similar position in PPWR deliberations. The International Sustainability and Carbon Certification (ISCC) provides third-party mass balance certification that is accepted by major consumer brand companies. This regulatory momentum suggests that mass balance-based recycled content claims will become more defensible over time, not less.

3.5 Global installed capacity crossed 1 million tonnes per year

According to Lux Research (2025), global advanced plastic recycling capacity crossed 1 million tonnes per year by end of 2024. While this is far below earlier projections of over 3 million t/y, it represents real operational scale — and the research firm notes that 'there is little question that advanced recycling technologies are here for the long run.'

4. Position B: The Case Against (or for Skepticism)

Critics and skeptics of chemical recycling make a different set of arguments, many of which are supported by operational data.

4.1 Most chemical recycling of flexible packaging produces fuel, not plastic

The most commercially deployed technology for flexible packaging is pyrolysis. Pyrolysis output is primarily pyrolysis oil — a liquid hydrocarbon mixture used as fuel or cracker feed to produce new virgin-equivalent petrochemicals. Critics, including NRDC and Center for Climate Integrity, argue that pyrolysis is essentially waste-to-fuel incineration: the plastic is burned (under reduced oxygen), and the energy released or the fuel produced is the primary product, not recycled material. Converting plastic to fuel does not reduce demand for virgin plastic production and does not close the packaging material loop.

4.2 The track record of plant closures is extensive

The commercial history of chemical recycling includes a significant number of high-profile failures. In 2024 alone, multiple facilities shut down due to technical and financial difficulties. Q1 2025 brought two additional bankruptcy filings. One industry consultant described the state in 2024 as: 'we've had a few successes and a ton of failures; capacity has not developed as major projects have been delayed or cancelled.' (Cited in Center for Climate Integrity report, 2025.)

4.3 Economics remain challenging

Pyrolysis and gasification are energy-intensive, and the operational costs are high relative to the value of the outputs. When oil prices are low, pyrolysis oil cannot compete economically with virgin fossil feedstocks without subsidies or a 'green premium' from buyers. The carbon benefit calculation is disputed: if the facility uses fossil fuel energy in its process and produces output that is used as fuel, the net carbon benefit over direct incineration may be marginal or even negative. Independent lifecycle assessments have reached widely varying conclusions.

4.4 Mass balance is contested

The mass balance accounting method — which allows recycled content claims even when recycled and virgin molecules are physically mixed in the same production run — is disputed in academic literature. Critics argue that mass balance allows companies to sell 'recycled content' products without physically using recycled material in those products. The Ellen MacArthur Foundation and CEFLEX have stated that only physical recycled content (not mass balance) should count toward packaging recyclability assessments under EU PPWR. The scientific and regulatory debate is unresolved.

4.5 Flexible packaging chemical recycling is almost entirely hypothetical

The Eastman success — the most credible validation of chemical recycling working at scale — processes PET (polyester): bottles, carpet, clothing. The multilayer PE/PP/nylon/aluminum structures used in retort pouches and flexible food packaging are not processed by any commercially proven chemical recycling technology at material recovery scale. Claims that flexible food packaging can be chemically recycled in a closed loop currently lack operational proof at commercial scale.

Table 2: The Arguments — Strongest Version of Each Position

5. The Evidence: What Actually Happened in 2024–2025

The year 2024 was described by Lux Research as having 'some big hits and misses.' The global installed capacity milestone (approaching 1 million t/y) was reached, but the projected inflection point of 3+ million t/y was significantly missed, and the delay is estimated at least two years.

Table 3: Key Chemical Recycling Projects — Status as of 2025

Sources: Lux Research (April 2025); NRDC Report (March 2025); Center for Climate Integrity (2025); Eastman corporate announcements; Resource Recycling (2024). ✅ = operational; ⚠️ = revised/challenged; ❌ = closed/bankrupt.

The pattern: the technology that has demonstrated commercial proof — Eastman's methanolysis — is a depolymerization process for a single polymer class (PET/polyester). The technology most commonly deployed for flexible packaging — pyrolysis — has the most extensive failure record and the most contested output classification.

6. The Mass Balance Controversy

Understanding mass balance is essential to evaluating chemical recycling claims. Mass balance is not fraud — it is a legitimate accounting methodology used across industries (the carbon credit market, the sustainable palm oil market, and the renewable energy credit market all use analogous systems). But it has important limitations that packaging buyers should understand.

Under mass balance accounting, a chemical facility that receives 1,000 tonnes of plastic waste as feedstock can certify that 1,000 tonnes of its output contains 'recycled content' — even if the recycled molecules are distributed across products in the same proportion as the overall production mix, not physically segregated. ISCC (International Sustainability and Carbon Certification) provides third-party mass balance certification that Eastman and others use.

The scientific objection: mass balance certification does not verify that a specific product contains physically recycled material. A package labeled '30% recycled content (mass balance)' may contain no physically recycled molecules — only the accounting credit applies. CEFLEX and the Ellen MacArthur Foundation have stated that mass balance should not count toward packaging recyclability assessments — only physical recycled content or physical collection and reprocessing into new material should count.

The regulatory trajectory: the UK has moved first, accepting mass balance recycled content for its Plastic Packaging Tax. The EU is moving toward a similar position under PPWR deliberations. Regulatory acceptance does not resolve the scientific debate, but it does create operational relevance for packaging buyers in those markets.

7. What This Means for Flexible Packaging Specifically

For retort pouches and multilayer flexible food packaging, the chemical recycling picture is particularly unclear. The following summary reflects the operational reality as of 2025–2026:

• Aluminum foil retort pouches (PET/Al/CPP, BOPA/Al/CPP): No commercial chemical recycling pathway exists that recovers these structures into new packaging material. Pyrolysis can process the film fraction, but the output is fuel, not new packaging. These structures cannot currently be claimed as 'chemically recyclable' in any meaningful sense.

• EVOH-based transparent retort pouches (PET/EVOH/CPP): EVOH is a barrier to mechanical recycling if present above 5 wt% (CEFLEX), and is also a contaminant in pyrolysis (CEFLEX pyrolysis bale spec includes maximum EVOH/Nylon limits). These structures are best recycled via mechanical means if designed within CEFLEX guidelines — not chemical recycling.

• All-PE mono-material retort structures: The closest thing to a recyclable retort pouch today uses mechanical recycling pathways, not chemical. EVOH at ≤5 wt% is compatible with PE mechanical recycling streams. Chemical recycling is not required.

• PET-based packaging (trays, lidding, bottles): This is where chemical recycling is most credibly applicable. Eastman's methanolysis processes polyester from packaging and textiles. If designing PET-based packaging for a market where Eastman's or equivalent depolymerization collection systems operate, chemical recycling end-of-life is a genuine option — provided collection infrastructure reaches the product.

8. The Regulatory Picture: EU PPWR and Chemical Recycling

EU PPWR (Packaging and Packaging Waste Regulation) is the most significant regulatory driver for flexible packaging recyclability globally. Its key provisions relevant to chemical recycling:

• Recyclability by design: from 2030, packaging sold in the EU must be 'recyclable' — meaning it must be collected, sorted, and recycled in existing or planned infrastructure. Packaging that can only be recycled via chemical routes that do not yet have operational infrastructure at scale may not satisfy 'designed to be recyclable' criteria.

• Recycled content minimums: from 2030, certain packaging categories must contain minimum percentages of recycled content. Whether chemically recycled content (via mass balance) counts toward these minimums is still being resolved in PPWR implementing regulations.

• Chemical recycling in EU policy: the European Parliament's position has moved toward accepting mass balance for recycled content purposes, but CEFLEX and the Ellen MacArthur Foundation have pushed back against this for packaging recyclability assessment specifically.

• Practical guidance for 2025: design for mechanical recyclability (CEFLEX Design for Recycling guidelines) is the lower-risk path for EU PPWR compliance. Chemical recycling can supplement but not substitute for a mechanical recyclability design foundation.

9. Where Genuine Uncertainty Remains

It would be intellectually dishonest to present the evidence as fully resolved in either direction. Several genuinely uncertain questions remain:

• 2027–2030 commercial landscape: Lux Research projects that the 2025 inflection point will be delayed by at least two years, not cancelled. If a subset of the projects currently in development reach commercial scale by 2027–2030, the landscape could shift materially.

• Net carbon benefit at scale: the LCA (lifecycle assessment) literature on pyrolysis and other chemical recycling technologies is inconsistent. Independent academic assessments vary widely in their conclusions about net GHG benefit compared to incineration or landfill. This remains an open scientific question.

• Regulatory evolution: as of 2026, EU PPWR implementing regulations on chemical recycling and mass balance are not finalized. The final regulatory text will significantly determine how useful chemical recycling is as a tool for brand sustainability claims.

• Feedstock economics: the long-term economics of chemical recycling depend partly on the oil price and the green premium brands are willing to pay. If regulatory pressure creates mandatory recycled content minimums that cannot be met by mechanical recycling alone, chemical recycling economics improve materially.

10. Practical Guidance for Manufacturers Making Packaging Decisions Now

This article does not determine whether chemical recycling will succeed. It presents what is known. For manufacturers making packaging decisions in 2025–2026, the following framework applies regardless of which trajectory chemical recycling ultimately follows:

Table 4: Decision Guide — Chemical Recycling and Your Packaging Situation

This table reflects the regulatory and commercial landscape as of early 2026. EU PPWR implementing regulations and chemical recycling infrastructure development may alter some recommendations by 2027–2030. Review annually.

The core principle: do not make irreversible packaging design decisions based on chemical recycling infrastructure that does not yet exist for your specific material type and geography. Design for the recycling pathway that works today, while monitoring the commercial development of chemical recycling for your polymer type and application.

11. Frequently Asked Questions

Q1: What exactly is chemical recycling?

Chemical recycling is a family of technologies that break down plastic polymers using heat and/or chemicals. The main categories are: pyrolysis (thermal degradation producing oil/fuel), gasification (producing syngas), depolymerization/solvolysis (breaking polymers to monomers for repolymerization into new plastic), and dissolution (physically dissolving polymers in solvents). These technologies are fundamentally different from mechanical recycling (shredding, washing, melting, and re-extruding). The term 'advanced recycling' is often used interchangeably with chemical recycling, though the definitions vary.

Q2: Can chemical recycling handle multilayer flexible packaging?

The honest answer is: only partially, and mostly as fuel rather than new plastic. Pyrolysis — the most commercially deployed technology for flexible packaging — breaks down mixed multilayer structures, but its primary output is pyrolysis oil used as fuel or petrochemical cracker feed, not as direct feedstock for new flexible packaging. Depolymerization technologies (e.g., Eastman's methanolysis) are the most promising for closed-loop material recovery, but they work specifically on PET (polyester) — not on the polyethylene/polypropylene/nylon structures used in most flexible food packaging. No commercially proven technology currently recovers multilayer aluminum foil retort pouches into new packaging material.

Q3: What happened to all the chemical recycling projects that were announced?

Of the global advanced recycling projects announced before 2023, over 50% are expected to miss their 2025 completion deadlines according to Lux Research (2025). In 2024 alone, Ioniqa (Netherlands), Agilyx/Styrenyx (Oregon), and New Hope Energy (Texas) closed their facilities. In early Q1 2025, BlueCycle and Brightmark's pyrolysis subsidiary declared bankruptcy. The headline success is Eastman's 110,000 t/y Kingsport Tennessee PET molecular recycling plant, which achieved production in March 2024 — but this processes polyester (PET), not flexible packaging.

Q4: What is mass balance accounting in chemical recycling?

Mass balance is a bookkeeping method that tracks recycled material inputs against certified recycled content outputs across a production system. Because chemically recycled and virgin materials are often physically mixed in the same production processes, mass balance allows a company to claim that a product contains 'X% recycled content' based on the proportion of recycled feedstock fed into the system — even if those specific molecules are not in that specific product. The method is used by Eastman (ISCC-certified) and others. Critics argue that mass balance enables recycled content claims without the specific plastic actually being in the product. The UK has become the first country to explicitly accept mass balance recycled content for its Plastic Packaging Tax exemption. EU regulatory position is still evolving under PPWR.

Q5: Does chemical recycling count toward EU PPWR recyclability requirements?

As of 2025–2026, the EU's position on chemical recycling under PPWR is still being resolved. The European Parliament has moved toward accepting mass balance accounting for recycled content. However, PPWR recyclability requirements — specifically the requirement that packaging be designed to be recyclable — are primarily evaluated against collection and sorting infrastructure, not against chemical recycling pathways. Packaging that requires chemical recycling to be 'recycled' may not qualify as recyclable under PPWR design criteria if there is no adequate collection and sorting infrastructure for that packaging. The regulatory picture will clarify further by 2026–2027 as implementing regulations are finalized.

Q6: What is pyrolysis oil and does it count as recycling?

Pyrolysis oil (also called pyoil or TACOIL) is the primary output of plastic pyrolysis — a liquid hydrocarbon mixture produced when plastics are heated with limited oxygen. It can be used as fuel (burned for energy) or as cracker feed to produce new petrochemical building blocks. Whether pyrolysis-to-fuel counts as 'recycling' is contentious. The Ellen MacArthur Foundation and CEFLEX argue that only plastic-to-plastic processes (where the output is used to make new plastic, not burned) should count as recycling. NRDC and Center for Climate Integrity have published reports arguing pyrolysis is essentially waste-to-fuel incineration, not recycling. The plastics industry and companies like ExxonMobil and Plastic Energy counter that pyrolysis produces materials that re-enter the petrochemical stream. The regulatory classification differs by jurisdiction.

Q7: What should a food manufacturer do today about chemical recycling?

For immediate packaging decisions, chemical recycling is not yet a reliable design criterion for flexible packaging. The operationally proven wins (Eastman methanolysis for PET) do not apply to multilayer flexible retort pouches. For EU market products, focus on designs meeting CEFLEX mechanical recyclability guidelines (poly-dominant structures, EVOH ≤5 wt%, no aluminum foil if recyclability is a design requirement). For recycled content commitments, certified PCR (post-consumer recycled) from mechanical recycling is the lower-risk path in 2025. Chemical recycling supply agreements may become more credible by 2027–2030 if the current scale-up challenges are resolved.

Q8: What does Sunkey recommend for retort pouch recyclability?

Sunkey takes no position on whether chemical recycling will ultimately succeed at scale — the evidence is genuinely mixed and the technology is still developing. For retort pouches specifically: aluminum foil structures (PET/Al/CPP) are not recyclable in current mechanical or chemical recycling streams. EVOH-based transparent structures (PET/EVOH/CPP or BOPA/EVOH/CPP) can meet CEFLEX mechanical recyclability guidelines if EVOH is ≤5 wt%. All-PE mono-material structures with EVOH are the direction toward recyclability for retort applications. Contact our technical team to discuss structure options for your specific product and market requirements.

Related Articles in This Series

• Blog 11: EU PPWR and Flexible Packaging: What Every Food Manufacturer Must Know Before 2030 — sunkeycn.com/eu-ppwr-flexible-packaging-compliance

• Blog 18: How One Japanese Company Has Controlled the World's Oxygen Barrier for 50 Years — sunkeycn.com/kuraray-evoh-monopoly-barrier-materials

• Blog 20: All-PE Mono-Material Packaging: Genuinely Recyclable or Marketing Concept? — sunkeycn.com/all-pe-mono-material-packaging-recyclability

• Blog 3: Retort Pouch Materials Guide: Choosing the Right Structure for 121°C and 135°C — sunkeycn.com/retort-pouch-materials-guide

• Blog 1: Retort Pouches: The Complete Guide to Heat-Resistant Flexible Packaging — sunkeycn.com/retort-pouch-complete-guide

© 2026 Sunkey Packaging Co., Ltd. All rights reserved. | www.sunkeycn.com

Disclaimer: This article presents opposing positions on chemical recycling based on publicly available evidence. It does not constitute investment, sustainability, or regulatory advice. Operational status data cited from Lux Research (April 2025), NRDC (March 2025), Center for Climate Integrity (2025), Resource Recycling, and company announcements. Regulatory positions on EU PPWR and mass balance are as of early 2026 and subject to change as implementing regulations are finalized. Sunkey Packaging expresses no view on the future commercial viability of chemical recycling technologies.

Blog 19 of 20 | Sunkey Retort Pouch Content Series | Phase 4: Outer Layer | Published 2026