05 February 2025
France plans to provide direct grants totalling up to €500m for investments into chemical recycling plants for plastic waste and polyester textiles.
The European Commission has given the green light under state aid rules to a €500m French scheme to support the chemical recycling of plastic waste. The projects receiving state funding will process input material such as trays, films, non-beverage bottles, and textile materials with a certain amount of polyester content, according to the Commission.
"The scheme aims to support chemical recycling technologies that convert mixed and/or contaminated plastic waste back into 'virgin-like raw materials. The scheme will contribute to the EU's objective of circularity of production and consumption processes as part of a broader transformation of the industry towards climate neutrality," the EU authority commented when it announced the decision on Monday.
Under the French scheme, which is open to companies of all sizes and operating in all sectors, the state aid will take the form of direct grants covering up to 40 per cent of the eligible costs. These are described by the Commission as the "extra investment costs", which are be calculated "by comparing the total investment costs of a project of chemical recycling of plastic waste with those of less environmentally friendly projects".
The EU Commission said that this was the first state aid scheme which it assessed under section 4.4 of the "Guidelines on State aid for climate, environmental protection and energy" (CEEAG) published in 2022. This section covers state aid for resource efficiency and for supporting the transition towards a circular economy.
The Commission said that it found the scheme to be "necessary and appropriate to allow for the deployment of chemical recycling of plastics". The scheme had an "incentive effect" as the beneficiaries would not carry out the relevant investments without the public support. The Commission also concluded that France had put in place sufficient safeguards to ensure that the scheme has a limited impact on competition and trade within the EU. In particular, the scheme was open to all companies operating in all sectors and the aid was limited to the minimum necessary to undertake the projects. "On this basis, the Commission approved the French scheme under EU State aid rules", according to Monday's announcement.
"The French scheme approved today will support investments for chemical recycling of plastics. It will contribute to the EU’s objective of reaching climate neutrality by 2050, by promoting the use of existing resources through efficiency and circular economy practices. At the same time, the scheme will ensure that any potential competition distortions will be kept to a minimum", commented Teresa Ribera, Executive Vice-President for a Clean, Just and Competitive Transition.
Following the resolution of any confidentiality issues, the Commission will publish the decision in its Competition Directorate's state aid register, but it is not yet available there. Several companies in France are working on large-scale chemical recycling projects that could benefit from the aid scheme.
These include the company Carbios, which is planning a "bio-recycling" facility for PET and polyester waste which is to use an enzymatic depolymerisation process. It recently postponed the start of construction and announced restructuring measures and redundancies. The outstanding EU decision regarding the French state aid programme was named among the reasons for the measures.
A chemical PET recycling project in Saint-Avold in Lorraine was completely abandoned last November. The venture, a partnership between the environmental services group Suez, the technology provider Loop Industries and the South Korean company SK Geo Centric (SKGC), was first announced in February 2023. No reason was given for the decision to cancel the project.
