Braskem Exits Dutch Plastic Recycling Venture Due to High Energy Costs and Economic Slowdown.

Braskem, a chemical company, is abandoning its joint venture in the Netherlands focused on plastic waste recycling due to high energy costs and economic slowdown in Europe. The subsidiary, Braskem Netherlands BV, will now focus on its core business of producing and selling chemicals and plastics. The joint venture, Upsyde, was established in 2023 with Terra Circular to produce plates and pallets from recycled plastic.

Braskem, a leading chemical company, has decided to discontinue its joint venture in the Netherlands focused on plastic waste recycling. The subsidiary, Braskem Netherlands BV, will now shift its focus back to its core business of producing and selling chemicals and plastics. The joint venture, Upsyde, was established in 2023 with Terra Circular to produce plastic pallets and road plates from recycled plastic.

The decision comes amidst high energy costs and an economic slowdown in Europe. Upsyde, previously known as ER Plastics, has been producing plastic pallets, road plates, and heavy-duty mats through an extrusion and pressing process using unsorted mixed post-consumer plastic waste. However, the increased operational costs and economic pressures have led Braskem to prioritize its core business.

This move is part of a broader trend in the European recycled polypropylene market. According to Platts assessments by S&P Global Commodity Insights, the spread between virgin polypropylene (PP) and recycled polypropylene (R-PP) further widened to €630/mt in June. The recycled-virgin spread has been growing due to fluctuating demand and pressure on virgin PP prices despite a rollover decision for its feedstock propylene's contract price for the month [1].

In the same week, British chemical producer Ineos announced that its cracker at the Lavera site, France, started receiving pyrolysis oil produced via chemical recycling mixed plastic waste. This oil will be used to make advanced recycled polymers with virgin quality, indicating a growing interest in chemical recycling as an alternative to mechanical recycling.

Braskem's decision to abandon the joint venture is a strategic move to realign its business focus with market conditions and operational costs. As the European recycled polypropylene market continues to evolve, companies are adapting their strategies to balance sustainability initiatives with economic realities.

References:
[1] https://www.spglobal.com/commodityinsights/en/our-methodology/price-assessments/chemicals/europe-recycled-polypropylene