NOVA Chemicals Cancels Major Chemical Recycling Project Amid Strategic Shift

In a surprising move, NOVA Chemicals has officially scrapped its plans to build a chemical recycling plant in Sarnia, Ontario. This decision marks a significant shift in the company’s strategy within the recycling sector, moving away from chemical recycling to focus on mechanical recycling.

Previously, NOVA had announced ambitious plans to develop a large-scale chemical recycling facility. However, within two years, the company redirected its efforts towards mechanical recycling, leading to multiple chemical recycling projects being put on hold.

In June 2024, NOVA received FDA approval for its mechanical recycling plant in Connersville, Indiana, which will produce post-consumer recycled LLDPE materials suitable for various food contact applications. This facility is expected to begin trial operations in 2025, with full operations commencing in early 2026.

Despite initial collaboration with Plastic Energy to explore the feasibility of a chemical recycling plant, NOVA decided to pause the project after the feasibility study was completed in 2024. Greg DeKunder, VP of Nova Circular Solutions, noted that it’s common for companies to explore multiple investment projects simultaneously, and many are often shelved. However, the high costs, lengthy timelines, and regulatory complexities surrounding chemical recycling in North America contributed to the project's cancellation. DeKunder emphasized that the investment pause is temporary; should conditions improve, NOVA may reconsider this project in the future.

Other chemical recycling initiatives have also faced delays or cancellations, including projects from Eastman in France and Brightmark in Georgia. Meanwhile, some projects, like those from PureCycle and ExxonMobil, continue to progress.

According to DeKunder, the current environment poses significant risks for large chemical recycling projects, including raw material supply stability, insufficient purchase agreements, and external pressures from environmental groups. Legislative scrutiny of pyrolysis technology is increasing, with nine states proposing restrictions on chemical recycling legislation, raising questions about its classification as a recycling method.

With mixed legislative support across the U.S., the future for chemical recycling remains uncertain. Should more restrictive laws be enacted, they could drastically impact future investments in these technologies. Additionally, changes in tariff policies and a weakening consumer market are leading major companies like Coca-Cola to lower their sustainability targets, potentially affecting demand and complicating the advancement of chemical recycling initiatives.