European Commission greenlights €500M French chemical recycling scheme
The European Commission (EC) has approved a French State aid scheme to boost the chemical recycling of certain types of plastic waste. The EC hopes that the €500 million (US$516 million) scheme to convert mixed or contaminated plastic waste back into “virgin-like” raw materials will help meet its 2024–2029 priorities “for a more circular and resilient economy.”
The French scheme aims to boost investment in the chemical recycling of plastic trays, films, non-beverage bottles, and textile materials with some polyester content.
Companies of all sizes and relevant sectors will reportedly be eligible to take advantage of the scheme, which falls under EU State aid rules, in the form of direct grants.
The maximum amount of aid companies are eligible to receive is 40% of costs deemed to be relevant, according to the EC. These are the “extra investment costs calculated by comparing the total investment costs of a project of chemical recycling of plastic waste with those of less environmentally friendly projects.”
Teresa Ribera, the EC executive vice president for Clean, Just, and Competitive Transition, says: “The French scheme approved today will support investments in 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.”
The EC assessment
The EC approved the French scheme following an assessment based on the EU State aid rules outlined in Article 107(3)(c) of the Treaty on the Functioning of the EU (TFEU) and the 2022 “Guidelines on State aid for climate, environmental protection and energy” (CEEAG).
The TFEU enables member states to receive support for the development of economic activities subject to conditions.
The EC assessment determined that:
- The scheme is necessary and appropriate to allow for the deployment of chemical recycling of plastics.
- The scheme has an “incentive effect” as the beneficiaries would not carry out the relevant investments without public support.
- France has 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 is open to all companies operating in all sectors, and the aid is limited to the minimum necessary to undertake the projects.
This is the first State aid scheme the EC has assessed under Section 4.4 of the CEEAG, which allows aid for resource efficiency and for supporting the transition toward a circular economy.
The 2022 CEEAG provides guidelines on how the EC should assess the compatibility of aid measures with environmental protection factors, including climate protection and energy, as outlined under Article 107(3)(c) TFEU.
A recent German Federal Environment Agency report presented findings that show that chemical recycling is more environmentally sustainable than the incineration recycling method,but less so when compared to other types of recycling.
