Pyrolysis in 2025: UK and Asia’s Positive Strides and Investment Opportunities

Written By Theo Webb

Introduction

Pyrolysis – the thermal decomposition of waste materials in the absence of oxygen – has emerged this year as a promising technology to tackle plastic pollution and generate valuable fuels. By converting hard-to-recycle waste (like mixed plastics, tyres, or biomass) into useful products such as oil, syngas, and char, pyrolysis aligns with global sustainability goals and the circular economy. Both the United Kingdom and countries across Asia (especially in Southeast Asia) have made significant positive strides in 2025, from policy support to new commercial projects. This report highlights how pyrolysis has evolved in a positive light in these regions and why now is an opportune time to invest in the pyrolysis space.

Pyrolysis Gains Momentum as a Circular Solution

As environmental regulations tighten and the need for circular waste management grows, pyrolysis is gaining traction as a viable solution. The process can convert difficult-to-manage waste streams into usable energy products, reducing landfill dependency and pollution. In fact, the global pyrolysis oil market is on a robust growth trajectory – valued around $2.07 billion in 2025 and projected to exceed $4.5 billion by 2035, roughly doubling with an ~8% compound annual growth rate. This growth reflects increasing demand for low-carbon fuels and feedstocks derived from waste. Technological advances are also boosting efficiency and output quality; modern reactors with better temperature control and catalytic processes yield higher-quality oils and make pyrolysis more economically attractive. Overall, pyrolysis is no longer a niche experiment but a maturing industry poised to play a key role in waste-to-energy and recycling infrastructure worldwide.

Figure: A modern waste-plastic pyrolysis plant. Such facilities heat waste (plastics, biomass, etc.) in oxygen-free reactors to produce oil, gas, and char, offering a pathway to turn trash into valuable resources.

United Kingdom: Projects, Policy, and Innovation in 2025

The UK has seen major investments and policy support for pyrolysis this year, signalling a strong commitment to advanced recycling and waste-to-fuel technologies. Notably, Clean Planet Energy, a UK-based company, is expanding its network of ecoPlants that turn mixed plastic waste into usable outputs. In December 2025 it applied to build a new 25,000-tonne-per-year pyrolysis plant in Lincolnshire, on top of another 24,000-tonne facility already under construction in Teesside (set to commission in 2026). These plants will intake mixed plastics like fast-food containers, bags, and films, converting them largely into pyrolysis oil (about 69% yield) with the remainder as syngas and char. Each site not only addresses the plastic waste crisis but also brings local economic benefits – the Lincolnshire project alone is expected to create 50–70 direct jobs (plus around 100 during construction) .

Another landmark project is underway in Tees Valley: Endolys is investing £120 million to build the UK’s first large-scale plastic film recycling facility using pyrolysis. This plant – slated to begin phase-one operations by late 2026 – will convert hard-to-recycle films (plastic bags, packaging films, cups, etc.) into pyrolysis oil, thus boosting the local circular economy and creating about 120 new jobs. The scale is impressive: phase one will deploy six pyrolysis units to process 60,000 tonnes of shredded plastic film waste into 40,000 tonnes of oil annually, with a similar second phase to double that capacity. Regional leaders have lauded this project for placing Teesside “at the forefront of innovation in recycling and clean growth,” underlining how such investments can revitalise industrial areas while solving environmental challenges.

UK authorities are also exploring pyrolysis for biochar and clean energy. In Shropshire, the county council – one of the UK’s early adopters of biochar pyrolysis – is constructing its second plant to thermochemically convert wood waste into biochar (a carbon-rich soil enhancer) and renewable energy. The new Ludlow pyrolysis facility, approved in 2025 and expected to be operational by early 2026, will produce about 1,000 tonnes of biochar per year from tree clippings and timber waste. Shropshire’s first unit came online in late 2024, making the council the first in the UK to enter the biochar market, and its success has drawn interest from over 30 other councils and several businesses looking to invest in pyrolysis technology. This momentum at the municipal level shows recognition of pyrolysis as a climate action tool – biochar not only locks carbon away but also can generate revenue (sold for uses in agriculture, construction, water filtration, etc.) .

Crucially, government policy support in the UK has improved the business case for pyrolysis. The UK became the first country to count pyrolysis-based recycled content toward exemptions in a plastic packaging tax, effectively incentivising manufacturers to use chemically recycled (pyrolysis-derived) plastics. In broader terms, Europe’s regulatory climate is shifting to accommodate chemical recycling – the conversation has moved from possibly restricting pyrolysis to learning how to “live with it,” as regulators see it can help meet recycling targets. This greater regulatory clarity (e.g. mass-balance accounting rules for pyrolysis oil in plastics) is expected to spur new investment in the sector in the coming years.

The UK’s innovation in pyrolysis also extends to clean fuels. For example, Powerhouse Energy Group, a British firm, launched a pilot feedstock recycling unit in Wales that uses a pyrolysis process (in a special rotary kiln) to convert unrecyclable waste plastics into clean hydrogen gas. The demonstration unit (unveiled to investors in March 2025) processes a couple of tonnes of plastic per day, and the full-scale commercial design aims to handle 35 tonnes per day to produce hydrogen at scale. This illustrates how UK companies are pushing pyrolysis technology beyond just liquid fuels – into hydrogen and energy production – which can open new revenue streams and partnerships (e.g. with fuel cell or clean transport industries). Such R&D efforts, backed by investor interest, underscore pyrolysis’s evolving versatility and its attractiveness as an investment in the clean-tech space.

Asia (Thailand & Neighbours): Booming Initiatives and Supportive Policies

Across Asia – particularly in Southeast Asia – 2025 has seen a surge of positive developments in pyrolysis, with Thailand and its neighbouring countries championing the technology as a solution to both waste and energy challenges. Market growth in the region is striking: the waste plastic pyrolysis market in Southeast Asia was roughly $120 million in 2024 and is expected to exceed $800 million by 2030, reflecting an astonishing ~35% annual growth rate. This boom is driven by the confluence of abundant waste (over 60 million tons of plastic waste generated yearly in SE Asia ) and strong governmental push for sustainable waste management.

Thailand, in particular, has positioned pyrolysis as a key component of its national circular economy strategy. The Thai government is phasing out plastic waste imports by 2025 and forcing a turn to domestic recycling solutions. Under Thailand’s Circular Economy Action Plan, the goal is to achieve a 100% plastic recycling rate by 2030, and to that end, a $150 million circular economy fund was established, with priority to projects that convert plastic via pyrolysis into valuable outputs like sustainable aviation fuel (SAF). This means companies developing pyrolysis processes to produce jet fuel from waste plastics can access generous funding, a clear incentive aligning waste reduction with high-value fuel production. Additionally, Thailand’s Bio-Circular-Green Economy (BCG) Fund encourages innovation by subsidising 15% of equipment costs for adopters of advanced continuous pyrolysis technology. These subsidies lower the barrier for small and medium enterprises to set up modern pyrolysis plants. Another forward-looking policy is Thailand’s planned carbon tax in 2025, which will allow companies to offset part of their emissions via carbon credits – a boon for pyrolysis projects that can claim carbon reduction and trade credits for extra revenue. In short, Thailand has created a very pro-pyrolysis policy environment, from financial incentives to market guarantees, making it a hotbed for investment.

This supportive climate is already yielding tangible results in Thailand’s pyrolysis sector. Numerous enterprises are operating waste plastic and tyre pyrolysis facilities, selling outputs like fuel oil and recovered carbon black. In fact, one Thai investor operates 36 pyrolysis units nationally (one of the largest such operations in the region) and has continued to purchase more advanced pyrolysis reactors to expand capacity. The presence of specialised buyers for byproducts – for instance, companies that collect and upgrade the carbon black char from pyrolysis for industrial use – further improves the profitability of these projects. The Thai example demonstrates that pyrolysis can be scaled as a profitable private business when supported by policy and market demand, effectively tackling the twin problems of waste surplus and fossil fuel dependence.

Neighbouring countries are following suit with their own positive developments:

  • Malaysia now subsidises $100–$120 per ton of waste processed via pyrolysis, directly boosting the economics of pyrolysis plants. The government is also driving standardisation and scale, promoting “standardised pyrolysis plants” with at least 10,000-ton annual capacity. In a collaborative effort, Malaysia and Thailand jointly released a Southeast Asian standard for pyrolysis-derived carbon black in 2025 – harmonising quality metrics like ash content and calorific value – to improve marketability and cross-border trade of this pyrolysis byproduct. Furthermore, Malaysia’s largest chemical company, PETRONAS (via Petronas Chemicals Group), reached a final investment decision in late 2023 to build Asia’s largest advanced recycling plant in Johor by 2026, using pyrolysis to convert 33,000 tons per year of plastic waste into feedstock for new plastics. This $Petronas project – in partnership with UK-based Plastic Energy – underscores confidence that large-scale pyrolysis can integrate into the petrochemical supply chain, supplying “recycled oil” to make fresh plastics and meeting big brands’ demand for recycled content. It’s a flagship example of industrial investment in pyrolysis, reinforcing that Asia is embracing this technology at both policy and corporate levels.

  • Vietnam has set aggressive targets to curb plastic pollution (e.g. a 50% reduction in marine plastic waste by 2025) and is enforcing corporate responsibility for recycling. Companies in Vietnam that fail to meet recycling quotas face steep fines, which indirectly nudges interest toward solutions like pyrolysis. International support is flowing in: the EU provided €30 million via an Asia Clean Technology fund to help Vietnam develop local continuous pyrolysis equipment manufacturing, fostering home-grown capacity for waste plastic conversion. Vietnam also plans a carbon credit trading system by 2026, wherein pyrolysis oil projects can earn carbon credit quotas to offset emissions costs. These measures make Vietnam an appealing frontier for pyrolysis investment, combining strong environmental mandates with financial and technical support for projects.

  • Singapore and Indonesia are likewise moving on advanced recycling. Singapore’s National Environment Agency is co-investing with a German firm to build a chemical recycling facility that will turn domestic plastic waste into fuel oils/feedstock for its petrochemical industry. And Indonesia is developing quality standards for recycled carbon black from pyrolysis and seeking international certifications (like ISCC+) for its pyrolysis outputs, steps that will improve the legitimacy and export prospects of pyrolysis products. Even the Philippines is leveraging pyrolysis via “Plastic Responsibility” organisations that collect and pyrolyse waste plastics on behalf of companies to meet mandated waste-reduction targets. Across the region, these actions point to a broad-based recognition: pyrolysis is a practical and scalable solution for the plastic waste crisis, and governments are keen to integrate it into their waste management and green energy frameworks.

Investment Outlook: Why Now is the Time to Invest in Pyrolysis

The confluence of developments in 2025 makes now a compelling time for investors and industry stakeholders to engage with the pyrolysis sector. Multiple factors are driving an attractive investment outlook:

  • Surging Market Demand: As noted, the market for pyrolysis outputs (like pyrolysis oil) is expanding rapidly, underpinned by global trends in sustainability. With an expected doubling of market value over the next decade, investors in pyrolysis technologies or plants can tap into a growing revenue pool. Industries from cement kilns to power plants are exploring pyrolysis oil as a lower-cost, lower-emission alternative fuel, broadening the customer base for pyrolysis products.

  • Policy and Regulatory Tailwinds: Governments in the UK, EU, and Asia are creating a favourable policy landscape for pyrolysis. Incentives such as tax exemptions for chemically recycled content, direct subsidies per ton of waste processed, R&D grants, and inclusion of pyrolysis in carbon credit schemes all improve project profitability. At the same time, stricter regulations on landfilling, single-use plastics, and corporate recycling responsibilities generate urgency for solutions – effectively pushing companies toward pyrolysis to avoid penalties and meet mandates. This alignment of policy pressure and support de-risks investments in the sector.

  • Technological Maturation: Pyrolysis technology has advanced significantly, reducing the risk of failure and improving returns. Modern continuous pyrolysis plants with enhanced reactors and catalytic processes are achieving higher oil yields and better product quality. Innovations like catalytic pyrolysis and improved gas cleaning mean the resulting oils are more compatible with refineries or generators, and emissions are kept low. Automation and digital controls are also making operations more reliable and scalable. These tech improvements translate to more efficient plants, higher uptime, and improved economic viability for investors.

  • Successful Project Examples: Both Western and Asian markets have proof-of-concept projects now demonstrating pyrolysis at commercial scale. From the UK’s upcoming large film-to-oil plant and operational tyre pyrolysis units, to Thailand’s thriving private pyrolysis enterprises, the technology is moving beyond pilot stage. Early entrants are seeing real profits; for example, a UK tyre pyrolysis plant reports generating millions of litres of oil and significant char byproduct annually with no waste left over, and entrepreneurs in Asia are rapidly scaling up operations in response to demand. These success stories indicate robust business models – revenue streams from fuel oil sales, char sales (for carbon black or biochar), and even power generation from syngas can make pyrolysis plants financially attractive. Investors can take confidence that they are not betting on unproven science, but rather on refining and scaling a proven process.

  • Environmental and Social Impact: Investing in pyrolysis also yields ESG (Environmental, Social, Governance) benefits, which is increasingly important for both public perception and compliance. Pyrolysis directly tackles plastic pollution and waste management challenges, contributing to cleaner environments. It also helps reduce greenhouse gas emissions by offsetting fossil fuel use (every ton of waste converted to fuel potentially displaces a ton of fossil resource) and by avoiding methane emissions from landfills. The production of biochar via pyrolysis, as done in the UK, even enables long-term carbon sequestration in soils. These positive impacts can qualify projects for green financing, carbon credits, or government “green recovery” programs, providing further financial upside or risk mitigation. Socially, new pyrolysis facilities bring jobs and innovation to communities – as seen in Teesside and Lincolnshire – and help build a circular economy infrastructure, which can be a point of pride and public support.

Conclusion

The year 2025 has marked a turning point for pyrolysis, with the UK and Asia leading by example in embracing this technology for waste valorisation and clean energy. What once may have been viewed as a speculative or experimental approach is now moving firmly into the mainstream, backed by strong economics and policy drivers. For potential investors and companies in the pyrolysis space, these positive developments signal a prime window of opportunity. By investing in pyrolysis projects or technology now, stakeholders can ride the wave of supportive momentum – capitalising on growing markets, supportive governments, and improved tech – while also contributing to environmental sustainability. In essence, pyrolysis has evolved into a win-win proposition this year: economically promising and environmentally vital. For those looking at the next big thing in circular economy innovation, now is the time to turn up the heat on pyrolysis.

Sources:

Report Generated by The ALFA Group

Theo Webb
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