Carbon Flows report 2026: recycling covers only 4% of the chemical industry’s carbon demand – but in Europe it already beats biomass

According to the updated Carbon Flows report from the Renewable Carbon Initiative (RCI), the global chemical industry embedded 660 million tonnes of carbon in its products in 2023, and 86% of it still came from crude oil, natural gas and coal. Yet the most interesting message of the Carbon Flows report, prepared by nova-Institute, is not fossil dominance. It is that recycling, despite its ongoing crisis, has become a visible, measurable carbon source. In the EU, the chemical sector already gets more carbon back from waste than from agricultural and forest biomass combined.

In short: The 2026 update of the Carbon Flows report shows that recycling supplies 4% of the chemical sector’s carbon demand globally and 9% in the EU, where it now overtakes biomass. The net-zero scenario for 2050 expects half of all carbon demand to come from recycling, roughly twenty times today’s volume.

Why decarbonisation is not enough for chemicals

In the energy sector, carbon is an energy carrier: we burn it and the released energy delivers power, heat or motion. That can genuinely be replaced by solar, wind, electrification and hydrogen. In chemicals and plastics, however, carbon is not fuel but a building block: it sits in polyethylene chains, detergent surfactants, tyres and solvents. There is no such thing as carbon-free plastic.

This is why RCI talks about defossilisation rather than decarbonisation: embedded carbon does not need to disappear, its source needs to change. Three renewable carbon sources are available: biomass, CO₂ captured from air or industrial off-gases, and recycling. The last one matters especially for waste management, because in this framework separately collected waste is not a “problem to be treated” but a feedstock for the chemical industry of the future.

A new method, new numbers

The first edition came out in 2023 with 2020 as the reference year. The current update uses 2023 data and, more importantly, a new methodology. The earlier version worked back from finished products, relying mainly on PRODCOM statistics, which could not rule out double counting. The new “system approach” counts carbon where it enters the chemical system (steam crackers, methanol production, refinery aromatics, biomass, CO₂ and recycling routes) and then traces it through platform chemicals to final products. The authors analysed more than forty chemical value chains covering almost the entire market.

This has consequences: global carbon demand rose from 550 to 660 million tonnes (partly real growth, partly more accurate accounting), while EU demand fell from 110 to 85 million tonnes. The latter has two causes: European chemical production dropped by 10–15% between 2020 and 2023, and the elimination of double counting further reduced the fossil volume.

The global picture: four per cent recycling, and a hidden giant in paper and wood

Of the 660 million tonnes of carbon demanded by chemicals and derived materials (polymers, organic chemicals) in 2023:

• 61% came from crude oil, 21% from natural gas and 4% from coal,
• 10% (64 million tonnes) from biomass,
• 4% (27 million tonnes) from recycling,
• and just 0.6 million tonnes from CO₂-based sources.

Recycled carbon flows back almost exclusively into thermoplastic value chains. Based on Plastics Europe data, 99% of the global figure comes from mechanical and 1% from chemical recycling, and the volume grew by 2% compared with 2022.

Widen the lens to include construction wood, furniture, pulp and paper, textile fibres and heavy oil fractions (bitumen, lubricants, paraffin), and total carbon demand reaches 1,400 million tonnes. Of this, 160 million tonnes (11%) is recycled biomass, mainly recovered paper and recovered wood, plus another 30 million tonnes of recycled fossil carbon. Recovered paper and wood therefore keep nearly six times as much carbon in circulation as all recycled carbon in the global chemical industry. That figure shows what scale a mature collection and processing system can reach.

The European picture: recycling has overtaken biomass

Of the 85 million tonnes of carbon demanded by the EU-27 chemicals and derived materials sector:

• 64% comes from crude oil and 19% from natural gas, with no coal in the mix,
• 8.3% (7.1 million tonnes) is bio-based,
• 8.9% (7.6 million tonnes) is recycled.

In other words, in Europe carbon recovered from waste is already a larger item than carbon from sugar, starch, vegetable oils, natural rubber and wood combined. Of the recycled polymer feedstock, 69% comes from post-consumer waste, 30% from pre-consumer (production) waste and 1% from chemical recycling. In the broader material balance, the share of recycled biomass in the EU is 16%, well above the global average.

The figure should be read with care. The authors themselves note that the main reason for the higher EU share is the more realistic, lower fossil volume: a smaller denominator means a larger ratio. The rise from 4% to 8.9% is therefore partly methodological and partly real growth. The real part is not negligible: recycled volume grew by 14% between 2020 and 2023.

The fracture: European recycling fell back in 2023

The most worrying data point in the report is that recycled volume in Europe decreased in 2023 compared with 2022. The press release reports a 6% decline, while the detailed EU data sheet shows an 8% drop for recycled plastics. The authors explicitly interpret this as a sign of the crisis in the European recycling sector.

This matches what dontwasteit.hu has reported repeatedly in recent months: according to the joint letter of the European plastics industry to Brussels, about 1.1 million tonnes of recycling capacity closed between 2023 and the second quarter of 2026, while Germany’s bvse, backing Recycling Europe’s rescue plan, is calling for mandatory recycled content and import controls. The Carbon Flows report shows the same process from the carbon-balance side: the circular carbon source that is already Europe’s largest non-fossil item began to shrink exactly when it most needs to grow.

According to the authors, the corrected baseline matters because realistic renewable carbon content targets can only be built on it. If policymakers started from the old, distorted figures, targets would be either unachievable or too lax.

2050: half of all carbon from waste?

The report’s updated exploratory scenario is not a forecast but an illustration of what a fully defossilised chemical industry would require by 2050. Its key assumptions:

• carbon demand grows by 2% a year, from 660 to 1,130 million tonnes (the previous scenario assumed 2.5%),
• in 2050, 50% of carbon demand comes from recycling, 20–30% from biomass and 20–30% from CO₂.

The authors lowered the recycling share from 55% to 50% because feedback indicated that losses in collection, sorting and processing made the earlier value too ambitious. Even so, this is an enormous leap: half of 1,130 million tonnes is roughly 565 million tonnes, about twenty times today’s 27 million tonnes of recycled carbon globally. It is also worth knowing that the nova/RCI scenario is among the most optimistic on this point: the 24 scenarios from 15 studies compared in the report expect an average recycling share of 20%, while a meta-analysis by the Wuppertal Institute found a range of 20–35%.

Which technologies will carry the load?

An expert survey conducted for the report in summer 2026 asked how recycled carbon in 2050 would be split between technologies. Two groups answered: nova-Institute experts and the RCI Project Advisory Board (PAB):

• mechanical recycling: 29% (nova) / 42% (PAB),
• pyrolysis (pyrolysis oil, naphtha, carbon black): 29% / 17%,
• depolymerisation: 18% / 21%,
• gasification to methanol via syngas: 16% / 8%,
• dissolution (physical purification): 7% / 8%,
• incineration with CO₂ capture: 2% / 5%.

Both groups agree that there is no single winning technology, but they differ in emphasis: the industry board leans on mechanical recycling, the nova researchers more on thermochemical routes. This echoes the BASF study we covered earlier, finding that engineering plastics can only be recycled with a mix of technologies. The report explicitly expects a larger advanced (chemical) recycling stream than other studies, for reasons of resilience and autonomy. That requires a regulatory basis, which Cefic is pushing for by extending EU end-of-waste criteria to chemical recycling.

From a waste management perspective, the low estimated weight of incineration with CO₂ capture (2–5%) stands out. In the experts’ view, the future of carbon recovered from waste lies overwhelmingly in material recycling, not energy recovery.

Waste-derived biomass is still a thin slice

A separate background study linked to the report (Biomass Utilisation by the Global and EU Chemical Industry) details which types of biomass enter the chemical sector. Globally this amounts to 118 million tonnes of dry biomass containing 64 million tonnes of carbon; in the EU, 13 million tonnes of biomass containing 7 million tonnes of carbon.

The vast majority is primary feedstock: sugar, starch, vegetable oil, natural rubber and wood. Secondary, waste-type streams (glycerol, tall oil, used cooking oil, palm fatty acid distillate) make up only about 5% of biogenic carbon globally and about 3% in the EU. A few details:

• Used cooking oil (UCO): it hardly enters chemistry directly because of strict quality requirements. It reaches steam crackers as hydrotreated renewable naphtha; an estimated 420,000 tonnes of UCO globally and about 300,000 tonnes in the EU stand behind chemical use. The EU also imports 1.6–2.0 million tonnes a year of waste oils and fats in the relevant customs category.
• Animal fats: oleochemical use in Europe is around 300,000 tonnes a year and falling, as biodiesel and sustainable aviation fuel (SAF) compete ever harder for the same feedstock.
• Paper starch: 2.4 million tonnes in the EU. Slowing growth in packaging paper and lightweighting (lower basis weights) mean demand is stagnating or declining.

According to the study, lignocellulosic biorefinery technologies (wood, agricultural residues, biowaste) are still largely at pilot or demonstration stage, and products from cellulosic sugars currently cost at least twice as much as those from first-generation feedstocks. The 2050 expert estimates nevertheless show that bio-based chemistry will also shift towards lignocellulose and waste biomass: four of the six surveyed pathways rely on them.

What the Carbon Flows report means for waste management

The message of the Carbon Flows report applies from the collection bin to the plant: the chemical industry of the future will rely on separately collected, well-sorted waste. Packaging is the largest polymer application. In the EU it binds 22 million tonnes of carbon a year, 34% of the carbon embedded in polymers, so the quality of packaging waste directly determines how much carbon returns to the loop.

Three practical conclusions follow:

• Quality is the bottleneck. Reaching 50% is not just about collecting more; cutting collection and sorting losses is at least as important. The authors lowered the target precisely because of these losses.
• Capacity is the second constraint. From 21 November 2026, the EU can no longer ship plastic waste to non-OECD countries, so processing has to happen in Europe, exactly when capacity is shrinking.
• Regulation decides. The report is explicitly intended as a data basis for the EU debate on renewable carbon and bio-based content targets. The EPR harmonisation efforts linked to the Circular Economy Act and mandatory recycled content will together determine whether recovered carbon has a market.

The final lesson of the numbers is twofold. Recycling today is only a fraction of what it would need to be by 2050. Yet in Europe it is already the chemical industry’s largest renewable carbon source, and a prolonged market crisis could easily erode that lead.

Frequently asked questions about the Carbon Flows report

What does the RCI Carbon Flows report measure?

The report measures where the carbon embedded in chemical products and plastics comes from. nova-Institute experts account for fossil, bio-based, recycled and CO₂-based sources at global and EU-27 level, using 2023 as the reference year. The new method counts carbon where it enters the chemical system, which eliminates double counting.

How much of the chemical industry’s carbon demand comes from recycling?

Globally, 4%: of the 660 million tonnes of carbon demanded by chemicals and derived materials, 27 million tonnes come from recycling, almost entirely from mechanical plastics recycling. In the EU the share is 8.9%, or 7.6 million tonnes of carbon. In Europe this already exceeds the 7.1 million tonnes supplied by biomass.

Why did recycled volume in Europe fall in 2023?

According to the report, recycled volume dropped by 6–8% compared with 2022, which the authors read as a sign of the crisis in the European recycling sector. Weak demand, high energy prices and cheap imports lie behind it. Industry data show that about 1.1 million tonnes of recycling capacity have closed in Europe since 2023.

What recycling share does the report expect by 2050?

Under the updated scenario, 50% of the chemical industry’s 1,130 million tonnes of carbon demand in 2050 would come from recycling, down from the earlier 55%. Biomass and CO₂ would each provide 20–30%. This would be roughly twenty times today’s global recycled carbon volume, so reducing collection and sorting losses is essential.

How much biomass does the chemical industry use?

According to the related nova study, 118 million tonnes of dry biomass containing 64 million tonnes of carbon enter the chemical industry globally, and 13 million tonnes containing 7 million tonnes of carbon in the EU. Most of it is primary feedstock such as sugar, starch, vegetable oil and natural rubber. Waste-type streams account for about 5% globally and 3% in the EU.

🔗 Official sources and references: 👉

• Poranki, N., Porc, O., Carus, M. (2026): RCI Report: Carbon Flows Update 2026 – Compilation of supply and demand of fossil and renewable carbon for the chemicals and derived materials on a global and European level. Renewable Carbon Initiative, October 2026. Download
• Porc, O., Carus, M. (2026): Biomass Utilisation by the Global and EU Chemical Industry (2023 & 2024). nova-Institut GmbH, Hürth. DOI: 10.52548/GZTA6575
• Renewable Carbon Initiative press release (28 October 2026): Renewable Carbon Initiative presents the latest update of its comprehensive Carbon Flow Report

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