The Strategic Potential of Eni and Prysmian's Chemical Recycling Partnership in the Circular Economy

The global push for industrial decarbonization and circular economy solutions has created a fertile ground for innovative partnerships that address both environmental and economic challenges. Eni and Prysmian's collaboration to chemically recycle cross-linked polyethylene (XLPE) from decommissioned cables represents a compelling case study in this space. By leveraging advanced pyrolysis technology and aligning with EU sustainability targets, the partnership not only tackles a critical recycling gap but also positions itself as a scalable solution for industrial waste. For investors, this initiative offers a unique intersection of technological innovation, regulatory tailwinds, and long-term profitability.

A Breakthrough in Circular Economy for the Cable Industry

Traditional mechanical recycling methods struggle with XLPE, a material widely used in energy cables due to its thermal and electrical properties. According to a report by Indian Chemical News, Prysmian and Versalis (Eni's chemical subsidiary) have developed a closed-loop system that chemically recycles XLPE scrap into reusable polymers.

This process, enabled by Versalis's Hoop® technology, converts mixed and cross-linked plastics into pyrolysis oil, which is then polymerized into new materials for cable production. The pilot project, slated to begin in Italy in late 2026, aims to repurpose 60% of XLPE waste-a significant leap in recycling rates for this material.

This innovation addresses a critical pain point in the cable industry, where XLPE waste has historically ended up in landfills or incineration. By creating a circular supply chain, the partnership reduces reliance on virgin plastics and mitigates the environmental impact of cable production. For investors, the scalability of this model is evident: if successful, the technology could be expanded to other regions and applied to similar complex polymers, broadening its market potential.

Alignment with Decarbonization and Regulatory Goals

The partnership aligns with broader decarbonization strategies for both companies. Prysmian has already achieved a 54% reduction in emissions since 2019, with ambitious 2030 and 2035 targets. Eni, meanwhile, has committed to carbon neutrality by 2050, with interim goals to eliminate Scope 1+2 emissions from upstream operations by 2030. The chemical recycling initiative complements these objectives by reducing the carbon footprint of plastic production and enabling the use of recycled materials in high-performance cables.

Regulatory support further strengthens the investment case. The European Union's circular economy action plan emphasizes the need for advanced recycling technologies, and the partnership's focus on XLPE-a material previously excluded from mechanical recycling-positions it to benefit from policy incentives. As noted in an ESG News report, the project's alignment with EU targets could attract additional funding or subsidies, enhancing its economic viability.

Financial and Strategic Considerations

While specific investment figures for the partnership remain undisclosed, the strategic rationale is clear. Prysmian's role in collecting and reintegrating recycled polymers into its production chain creates a self-sustaining loop, reducing material costs and enhancing supply chain resilience. For Eni, the collaboration expands its footprint in the chemical recycling sector, a market projected to grow as demand for sustainable materials rises.

The pilot phase, scheduled for 2026, will be critical in demonstrating technical and economic feasibility. If the project meets its 60% recycling rate target, the partnership could attract interest from other industries facing similar waste challenges. For instance, the technology's adaptability to other cross-linked polymers-used in automotive or construction sectors-could unlock new revenue streams.

Risks and Mitigation

As with any emerging technology, risks include technical hurdles in scaling the Hoop® process and fluctuating regulatory environments. However, the partnership's phased approach-starting with a pilot-allows for iterative improvements and cost optimization. Additionally, Eni's broader investments in carbon capture and sustainable innovation ecosystems suggest a long-term commitment to decarbonization, reducing the likelihood of strategic pivots.

Conclusion

Eni and Prysmian's chemical recycling partnership exemplifies how industrial decarbonization and circular economy goals can be harmonized with profitability. By addressing a technical dead zone in plastic recycling and aligning with EU sustainability targets, the initiative offers a scalable solution with strong regulatory and market tailwinds. For investors, the project's potential to reduce waste, lower carbon emissions, and create a new revenue stream from recycled materials makes it a strategic bet in the transition to a low-carbon economy.