March 31, 2025 – NOVA Chemicals, a Canadian polyolefin giant, has made significant adjustments to its strategy in the chemical recycling sector. Initially, the company partnered with UK-based Plastic Energy to establish Canada’s largest chemical recycling facility in Sarnia, Ontario, with an anticipated annual capacity to process 66,000 tons of waste plastic. However, following an in-depth feasibility study, the project was officially halted in 2024, signaling a strategic retreat from chemical recycling for NOVA Chemicals.
This shift by NOVA Chemicals is not an isolated incident. In recent years, the company has increasingly focused on mechanical recycling. In June 2024, its mechanical recycling plant in Indiana, USA, received FDA approval to produce food-contact grade recycled LLDPE resin, with plans for full production by 2026. Additionally, in 2023, NOVA Chemicals launched a new business unit, “Nova Circular Solutions,” introducing three mechanically recycled polyethylene (rPE) products sourced from various materials, including agricultural films and HDPE milk jugs.
According to insights from the Color Masterbatch Industry Network, chemical recycling technology was once seen as an effective means of processing low-value, mixed, or contaminated plastic waste, with the key advantage of producing materials comparable in quality to virgin plastics. However, in practice, chemical recycling has faced numerous challenges. Uncertainty in policy, economic and market demand fluctuations, and technical controversies have all hindered the progress of chemical recycling projects. In contrast, mechanical recycling technology, with its high maturity, cost-effectiveness, and better alignment with current policy and market demands, has garnered more favor among businesses.
NOVA Chemicals’ pivot also reflects the broader challenges faced by the North American chemical recycling industry. Beyond the Sarnia project, several other chemical recycling initiatives have been delayed or encountered obstacles. Despite these setbacks, some companies continue to explore and innovate in the chemical recycling space. The future breakthroughs in chemical recycling may rely on clearer policies and cost reductions through technological advancements.
NOVA Chemicals’ case provides a practical roadmap for the development of the plastic circular economy. In the short term, meeting market demands through mechanical recycling and establishing profitable business models is a more pragmatic approach. In the long term, overcoming the bottlenecks of chemical recycling will require policy synergy and technological iteration to drive the sustainable development of the plastic circular economy.