Plastic waste management in the U.S. is undergoing major regulatory transformation. At the center of this change is advanced recycling, a group of chemical and thermal processes designed to complement traditional mechanical recycling by breaking down used plastics into the raw materials needed to make new plastics. Federal infrastructure programs, state-level policy shifts, and private capital are aligning to support new solutions for managing plastic waste.
Key U.S. plastics recycling policies
Plastic recycling in the U.S. is shaped by several key policies, as shown in Exhibit 1, including extended producer responsibility (EPR) laws. These laws shift the cost of recycling from taxpayers to producers. Under EPR programs, companies that sell plastic packaging finance its collection, recycling, and proper disposal. Eleven states have passed EPR legislation, which typically requires producers to join a third-party producer responsibility organization (PRO) that coordinates and funds recycling systems. EPR policies provide stable funding, encourage packaging redesign for recyclability, and set measurable recycling targets.
Exhibit 1: Comparison of policy commonality and impact on plastics recycling.
Post-consumer recycled (PCR) content mandates require that certain plastic products include a minimum percentage of recycled material. California, Washington, and New Jersey have established leading laws in this area. For example, California will require plastic beverage containers to contain 50 percent recycled content by 2030. These mandates stimulate demand for recycled resin and support the development of recycling infrastructure by making recycled plastic an essential input in manufacturing.
Views on single-use plastic bans are deeply divided at the state level as seen in Exhibit 2. Several states, including Oregon and New York, have banned single-use plastic carryout bags at retail stores. These bans aim to reduce litter and marine pollution. Other states, such as Texas and Florida, have passed laws that prohibit local governments from banning plastic bags. These laws, often referred to as “bans on bans,” are designed to maintain a consistent regulatory environment for retailers and preserve consumer choice.
Exhibit 2: Single-use plastic bag bans across the U.S.
Mandatory recycling laws are active in ten states, with eleven more enforcing similar rules at the municipal level. These laws require residents and businesses to separate recyclables from general waste. This practice increases material recovery rates, ensures more consistent feedstock for recycling facilities, and reduces landfill volumes. States with mandatory recycling laws typically demonstrate higher recycling rates and better long-term infrastructure investment.
State-level actions continue to play a pivotal role in shaping outcomes, as policies around EPR, PCR mandates, and mandatory recycling vary widely. These shifts are actively reshaping plastic waste management—driving infrastructure development, influencing producer compliance strategies, and redefining regulatory priorities across the country.
Advanced recycling technologies
Advanced recycling is an emerging category of technologies that differs from mechanical recycling by converting plastic waste into raw chemical feedstocks, often using heat or solvents. This transformation aligns with broader trends in feedstock flexibility and circular economy strategies within the chemicals industry. Learn more about ADI’s work in chemicals and plastics.
Advanced recycling typically refers to four main processes—pyrolysis, gasification, depolymerization, and dissolution—though other niche methods also exist.
- Pyrolysis applies high heat in the absence of oxygen to break down polyolefins, primarily polyethylene and polypropylene, into synthetic crude oil, naphtha, and diesel-range hydrocarbons. These outputs can be fed into a steam cracker to produce olefins for new plastic production.
- Gasification uses even higher temperatures with limited oxygen to generate synthesis gas (syngas), a mixture of hydrogen and carbon monoxide, which can be converted into chemical feedstocks for new plastics.
- Depolymerization breaks down polymers into their base monomers—for example, converting PET into terephthalic acid and ethylene glycol—which can then be repolymerized to produce virgin-quality resins.
- Dissolution, or solvent-based purification, dissolves used plastics to separate additives, dyes, and contaminants, yielding purified polymer molecules that can replace virgin resin in manufacturing.
These technologies are increasingly central to industry discussions about scaling sustainable polyolefins and improving recycling economics. At the 2025 ADI Forum, industry leaders explored these themes in depth, highlighting how policy, technology, and investment are converging to reshape the future of plastics recycling. Explore the full discussion here.
The policy divide: Conflicting approaches to advanced recycling
As of 2025, there are 24 states that classify advanced recycling as a manufacturing process, allowing easier permitting and access to industrial incentives. In contrast, states like New Jersey, Maine, and New Mexico treat it as solid waste management, subjecting facilities to stricter environmental regulations and permitting. Most other states have yet to clearly define advanced recycling through laws.
Supporters of advanced recycling argue that it expands the range of materials that can be diverted from landfills. For example, multilayer films, colored plastics, and food-contaminated containers that are unsuitable for mechanical recycling can be processed through pyrolysis or gasification. These technologies convert plastic waste into usable outputs such as transportation fuels, petrochemical feedstocks, and synthetic oils. In states like Texas and Pennsylvania, advanced recycling is backed by legislation that encourages infrastructure development and private-public partnerships. These developments are also driving innovation in how plastics are processed and tracked.
Opposition to advanced recycling focuses on its environmental footprint. Critics argue that pyrolysis and gasification are energy-intensive and produce more emissions than they save. Local bans and moratoriums, such as those in California’s Los Angeles County and New Jersey’s Union County, have blocked or delayed construction of advanced recycling facilities. Some states, including California, explicitly prohibit classifying plastics-to-fuel conversion as recycling, arguing that burning plastic-derived fuels contributes to greenhouse gas emissions and undermines circular economy goals.
A shifting regulatory environment
The policy intersection of EPR, PCR mandates, and advanced recycling is creating a new regulatory landscape for the plastics industry. ADI has previously explored these dynamics in depth, providing a comprehensive overview of evolving regulations and their implications for stakeholders across the value chain.
For producers, compliance will require changes to packaging, cost-sharing, and engagement with recycling organizations. For recyclers and technology companies, success will depend on navigating permitting rules and scaling processing capacity. For state and federal policymakers, the challenge lies in aligning environmental standards with economic development goals.
Advanced recycling is no longer a marginal technology. It is now a regulated and actively debated component of U.S. recycling policy. Whether it delivers on its promise will depend on how it is integrated with mechanical recycling, how it is governed at the state level, and how the private sector invests in building the next generation of materials recovery infrastructure.
– Dev Patel & Piercen Hoekstra
About ADI Analytics
ADI is a prestigious, boutique consulting firm specializing in oil and gas, energy, and chemicals since 2009. We bring deep expertise in a broad range of markets where we support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
We also host the ADI Forum that brings c-suite executives together for meaningful dialogue and strategic insights across the oil & gas, energy transition, and chemicals value chains. Learn more about the ADI Forum.
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