Core Policies for Waste Plastic-to-Diesel Conversion Technology

Core Policies for Waste Plastic-to-Diesel Conversion Technology

Policies worldwide center on promoting advanced technologies, phasing out backward capacity, enforcing strict compliance and boosting circular economy. China has formed a two-tier system of national strategic guidance plus local support, while the EU leads the global low-carbon transition with incentive and regulatory measures. Over 50 countries worldwide have rolled out fiscal and subsidy incentives, providing clear policy support for the industrialization of this technology.

I. Domestic Policies (China)

1. National Level: Strategic Guidance & Policy Incentives

Chemical recycling of waste plastic is listed as a core priority in the 14th Five-Year Plan for Circular Economy, with support for R&D and piloting of low-energy-consumption pyrolysis and low-carbon deep processing technologies.

Backward processes such as crude manual refining and batch-type small workshop production are explicitly phased out; mandatory requirements include dechlorination of raw materials, up-to-standard exhaust emissions and compliant end products, raising the industry entry threshold.

Coupling of waste plastic with crude oil processing is encouraged, and chemical recycling pilot projects are advanced to expand industrialization pathways.

Tax incentives: Qualified projects are eligible for a value-added tax (VAT) refund upon collection (up to 70%); for projects with over 90% waste plastic as raw material, taxable income is calculated at 90% of the actual amount.

2. Local Level: Financial Subsidies & Implementation Support

The central fiscal authority provides subsidies of up to 20% of the total project investment; local governments in Shanghai, Sichuan and other regions offer special project subsidies of up to 50 million yuan and 20 million yuan respectively for individual projects.

Qualified projects are incorporated into local key industrial plans, with green channels for land use, energy consumption quota and environmental approval to accelerate project implementation.

II. International Policies

1. EU: Mandatory Quotas & Carbon Tax-driven Incentives

Mandatory recycled plastic content quotas have been introduced for the packaging, automotive and other sectors, expanding market demand for chemical recycling products.

The Carbon Border Adjustment Mechanism (CBAM) is implemented; diesel produced from waste plastic pyrolysis has a significant competitive edge due to far lower carbon emissions than conventional diesel.

2. Other Countries Worldwide: Multi-dimensional Support

Over 50 countries including the US, Japan and Singapore offer production subsidies and consumption tax reductions; some classify the end products into the clean energy system, granting them the same policy incentives as biodiesel and hydrogen energy.

Some resource-scarce countries have introduced preferential policies for waste plastic raw material imports to reduce raw material costs.

III. Core Policy Orientations

Support advanced, phase out backward capacity: Prioritize support for low-energy-consumption, intelligent and large-scale advanced technologies; fully eliminate backward small workshops.

Strengthen compliance: Strictly regulate environmental and safety indicators throughout the process, forcing enterprises to improve supporting facilities such as exhaust gas purification and safety interlock systems.

Encourage low-carbon development: Policy incentives tilt toward low-carbon processes, promoting the integrated application of carbon capture and waste heat recovery technologies.

Drive large-scale development: Guide the industry toward integrated and park-based development through financial and approval support to reduce overall costs.