India’s plastic waste could replace imported naphtha through scalable chemical recycling

India could address its growing plastic waste problem while reducing dependence on imported naphtha by scaling up advanced chemical recycling technologies, with a Chandigarh-based startup developing a cost-efficient, modular system designed for large-scale deployment.

India generates about 9.3 million tonnes of plastic waste annually, the highest in the world, according to a 2024 study published in Nature. A significant portion of this waste consists of flexible packaging such as polythene bags and pouches, largely made from polyolefins like polyethylene (PE) and polypropylene (PP), which are difficult to process through conventional mechanical recycling.

“The challenge of plastics really happens at its end of life,” said Amit Tandon, founder and chief executive officer of PolyCycl, a startup that has spent more than a decade developing chemical recycling technology to process non-multilayer polyolefin packaging into pyrolysis oil.

PolyCycl launched its patented Contiflow Cracker Generation VI technology in early 2025. Developed over more than 150 man-years of research and development, the system is designed to convert hard-to-recycle plastic waste into higher-value outputs.

The technology uses a fully continuous thermo-chemical pyrolysis process combined with refining to convert low-grade plastics such as single-use bags and contaminated packaging into liquefied hydrocarbon oils. These oils then undergo multi-stage purification to produce food-grade polymers, renewable chemicals and fuels.

Mechanical recycling, which accounts for the majority of global recycling activity, involves sorting, washing, shredding and melting relatively clean plastic waste into granules. Recycling rates through this method are estimated at only 10–12 per cent globally, and the resulting material is often unsuitable for food-grade applications.

“In India, around 70 per cent of FMCG packaging is in a flexible format, much of which ends up in landfills,” Tandon said.

According to Tandon, chemical recycling enables circularity at the molecular level and can produce resins suitable for food-grade plastics, sustainable aviation fuels and renewable chemicals. He said the process can reduce fossil resource use by 75–90 per cent and cut carbon dioxide emissions by more than 40 per cent.

Industry estimates suggest that India’s 5.7–5.9 million tonnes of non-multilayer polyolefin packaging waste could yield around 4 million tonnes of pyrolysis oil annually at a conversion efficiency of about 70 per cent. The oil can be used as a direct substitute for naphtha in petrochemical plants, potentially offsetting a significant portion of imports.

India imported around 3 million tonnes of naphtha during the 2024–25 fiscal year, while total domestic consumption exceeded 12 million tonnes amid rising demand.

“Production costs are lower than fossil oil, with market premiums due to high demand for renewable oils,” Tandon said.

Unlike batch-based systems, PolyCycl’s technology operates continuously, with sorted polyolefin feedstock supplied round-the-clock to the reactor. The company said its modular design reduces capital costs by 50–75 per cent compared with similar technologies deployed in the United States and Europe.

“The fully continuous design is crucial for scalability,” Tandon said, adding that chemical recycling produces hydrocarbons with “limitless demand” in the petrochemical sector.

Founded in 2016, PolyCycl develops modular plants with capacities ranging from 15 to 100 tonnes per day. The company said these plants offer lower capital costs than global peers and could achieve EBITDA margins exceeding 50 per cent.

PolyCycl’s main research and development centre is located in Kalka, Haryana. The company is currently in advanced discussions with four to five potential licensees and is targeting one to two reference plants in India over the next two years, with plans for global licensing.

As Extended Producer Responsibility (EPR) norms mandate higher recycled content, Tandon said stronger enforcement and monetary penalties are required to ensure compliance.

“We can build and license from India for the rest of the world. Petrochemical majors have an interest in receiving these materials to make circular polymers,” he said.

The company said its modular technology and compatibility with existing petrochemical infrastructure position it for rapid scale-up, with the potential to reduce India’s naphtha imports while converting plastic waste into a domestic resource.