New accounting methods promoted by the chemical recycling industry are raising concerns among environmental groups, who warn that they could allow plastic products to be labelled as recycled even when they contain little or no recycled material.
As governments and scientists push for reductions in plastic production, the industry is increasingly promoting chemical recycling, also known as advanced recycling, as a solution to the global plastic waste crisis. However, critics argue that the technology produces limited amounts of recycled plastic while creating pollution and potential health risks.
One of the most widely used chemical recycling methods is pyrolysis, which uses high temperatures and pressure to break down plastic waste into oil and other chemical components. The oil must then undergo energy-intensive processing before it can be used to manufacture new plastics.
A 2023 study found that producing new plastic from waste through pyrolysis can generate more greenhouse gas emissions than manufacturing virgin plastic from crude oil. Researchers and environmental advocates also point to contamination from chemical additives and heavy metals, which can require the pyrolysis oil to be diluted with petroleum derived materials before further processing.
The actual proportion of plastic waste converted into new plastic through pyrolysis is estimated to be between 0.1% and 6%, according to figures cited by critics. By comparison, mechanical recycling, which involves shredding, melting and remoulding plastic, can produce material containing up to 100% recycled plastic, although recycled material can also require mixing with virgin plastic to achieve certain properties.
Debate over recycled content claims
The controversy centres on a method known as mass balance accounting, which tracks the quantities of recycled and virgin materials entering a production system and allocates recycled content across its outputs.
Under the more controversial non-proportional allocation approach, plastic waste used as fuel during processing as well as fuels produced from pyrolysis oil that are subsequently burned, could count towards recycling credits. Companies could then use those credits to label other plastic products as containing recycled material, even if the products themselves contain little or no recycled plastic.
Environmental advocates say this practice could mislead consumers and undermine confidence in recycling labels. Renée Sharp, director of plastics and petrochemical advocacy at the Natural Resources Defense Council, argued that companies could turn plastic into fuel, claim recycling credits and transfer those credits to products made from virgin plastic.
The American Chemistry Council supports both proportional and non proportional allocation when used within a rigorous, independently certified mass balance system. Its representative, Adam Peer, said transparent claims, clear rules and independent certification could help increase the use of sustainable materials.
However, critics warn that allowing chemical recyclers to transfer credits in ways unavailable to mechanical recyclers could create an uneven playing field and weaken incentives for more established recycling methods.
Pollution and public health concerns
Pyrolysis facilities have also faced scrutiny over emissions, hazardous waste handling and chemical storage. These plants may release pollutants, including benzene and dioxins, while storing substances that can be flammable, corrosive or explosive.
In the United States, pyrolysis is classified as incineration under the Clean Air Act. In March 2026, the Environmental Protection Agency proposed a rule that would exempt pyrolysis units from certain Clean Air Act regulations. Environmental organisations have opposed the proposal, warning that it could weaken federal safeguards against hazardous air pollution. A final decision was still pending at the time of the report.
Recent plant closures have added to concerns about the industry’s performance. Braven Environmental’s pyrolysis facility in North Carolina closed in 2025 after repeated hazardous-waste handling problems and unresolved regulatory violations. Freepoint Eco-Systems suspended operations at its plant in Ohio in June 2026 after receiving regulatory notices related to air pollution emissions and failure to meet required recycling output thresholds.
Environmental health researcher Veena Singla, affiliated with the University of California, San Francisco, said operational problems at such facilities raised concerns about spills, regulatory compliance and risks to nearby communities.
Advocates have also highlighted environmental justice concerns, arguing that chemical recycling facilities are disproportionately located near disadvantaged communities. Singla said her analysis of US Environmental Protection Agency data found that the proportion of Black residents living within three miles of chemical recycling facilities was twice the national average.
Regulatory approaches differ across regions
Regulators in the United States, Europe and Canada are examining how recycled-content claims should be calculated. Counting fuel as recycled material conflicts with the legal definitions of recycling in the European Union, California and Canada, according to the report.
In 2026, the European Commission approved mass balance accounting for recycled content in plastic beverage bottles under the EU Single-Use Plastics Directive, while ruling that fuels could not count towards recycled-content claims. The decision follows the definition of recycling under the EU’s 2008 Waste Framework Directive.
Zero Waste Europe, a network of environmental organisations, has called for consistent standards that do not give chemical recycling companies accounting options unavailable to mechanical recyclers. The organisation argues that non-proportional allocation can inflate reported recycling yields without increasing the amount of plastic actually recycled.
In the United States, there are currently no federal regulations governing the use of mass balance accounting for recycled plastic, although some states have introduced or are developing policies in this area.
Environmental groups are calling for transparent, traceable accounting systems and independent verification to ensure that recycled-content labels accurately reflect material recovered from waste.
Beyond accounting reforms, experts argue that reducing plastic production, particularly single-use plastics, and restricting harmful chemical additives remain important measures to address pollution. They warn that recycling technologies and accounting methods alone have yet to provide a comprehensive solution to the growing plastic waste crisis.