Transforming Waste into Value: Our Circular Economy Solutions

Where Others See Waste, We See Opportunity

Where others see waste, we see untapped value. The challenge isn't just managing waste — it's unlocking its potential as tomorrow's raw materials. The statistics are sobering: from 1950 to 2015, the vast majority of the world's plastic waste ended up in landfills and in the environment. According to the OECD, less than ten percent of all plastic waste is actually recycled worldwide. With billions of metric tons of municipal waste produced annually — and a significant portion not disposed of properly — we face an urgent environmental challenge that demands immediate action.

Products deserve a second life. After their initial use, we must regard them as valuable resources rather than waste to be dumped in landfills or disposed of in nature. This paradigm shift — from disposal to recovery, from waste to value — is fundamental to building a sustainable future and economic resilience.

Why Plastics Matter for Tomorrow

Plastics make everyday life better and are necessary for creating a sustainable future. They make vehicles safer and considerably lighter, conserving batteries in electric vehicles. They efficiently insulate buildings from heat and cold, reducing energy requirements for heating and cooling to a minimum. These examples demonstrate why we need plastic, now and in the future — but we must handle it responsibly throughout its entire lifecycle, maximizing value at every stage.

Our Waste-to-Value Philosophy

At Covestro, circular economy principles are an integral part of how we innovate for a sustainable future. Through dedicated projects, pilots, and advanced recycling technologies, we explore how waste streams can become valuable resources — creating new possibilities for industries and communities alike. Many discarded materials represent an opportunity to create value, reduce environmental impact and supply chain dependencies, and build a more sustainable future. Our approach identifies value in different waste streams, creating economic and environmental multiplier effects where waste materials are reimagined into higher-value products and applications.

Turning Waste Streams into Value Chains

Advanced Recycling Technologies

Covestro drives forward innovative waste-to-value solutions through three key methods:

• Mechanical recycling: Converting waste plastics, especially polycarbonates, into valuable new products for electronics, automotive and other applications
• Chemolysis: Extracting value from plastic waste by chemical splitting into individual components using solvents, catalysts, heat, or pressure
• Smart pyrolysis: Energy-efficient transformation of plastic waste into valuable building blocks by heating without oxygen, achieving higher yields with fewer process steps and lower CO₂ emissions

From Disposal Costs to Revenue Streams: Real Success Stories

Together with partners in China, we've developed an innovative process where used water bottles made of polycarbonate are transformed from waste into valuable material components for industries like electronics and automotive  — maintaining the quality and purity standards required for sensitive electronic applications while creating significant value from discarded materials.

At one of our US production facilities, we've successfully converted significant volumes of thermoplastic polyurethane (TPU) waste from a disposal cost into a revenue opportunity, achieving substantial cost savings while creating valuable recycled materials for supporting structure parts like bushings for swing sets.

Through our partnership with Neste and Borealis, we're extracting maximum value from discarded tires, transforming them into high-quality polycarbonates for automotive applications — from headlamp components to radiator grilles — demonstrating how low-value waste can become high-performance, high-value materials.

Our "Evocycle CQ Mattress" technology transforms the millions of mattresses that would otherwise end up in European waste incinerators into valuable resources, efficiently recovering polyols and isocyanates that retain their full commercial value for reuse.

Proven Benefits for Businesses

Environmental Impact and Efficiency

Our waste-to-value approach may deliver environmental benefits while optimizing operations. By systematically recycling materials, businesses may achieve a significantly lower carbon footprint compared to traditional production methods while contributing to global sustainability goals.

Companies implementing circular economy initiatives could experience streamlined internal processes that minimize waste generation and maximize resource utilization, creating potential operational advantages with measurable environmental and economic impact.

Economic Advantages and Cost Optimization

Effective waste management systems can deliver both immediate and long-term economic benefits. Our recycling concepts help reduce raw material costs while minimizing waste disposal expenses and supply chain dependencies, converting disposal costs into profit centers through efficient resource utilization.

Companies exploring circular economy initiatives could see reductions in disposal costs while generating new revenue streams from previously discarded materials. By incorporating recycled materials into production, businesses may reduce their dependency on volatile raw material markets — contributing to greater supply chain resilience and long-term cost stability.

Enhanced Brand Value and Performance Assurance

Companies implementing circular economy principles build stronger brand value and demonstrate alignment with globally recognized sustainability frameworks and regulations. Our sustainability claims regarding waste management are developed in line with internationally recognized standards — supporting our customers in strengthening their own environmental positioning.

A strong circularity strategy can build a resilient and forward-thinking brand reputation, positioning a company as a leader in sustainable business practices while meeting increasing customer demands for environmentally responsible products. Depending on the material and application, our recycled content offerings may match virgin material performance — though in some cases, recycled material is blended with virgin raw material to meet required performance specifications. This approach still offers meaningful benefits in terms of carbon footprint reduction, cost advantages, and supply chain resilience.

Designing for Maximum Value Recovery

We are developing materials with end-of-life value creation in mind, ensuring they can be efficiently processed through both mechanical and chemical recycling methods to maximize value recovery. Our approach includes:

• Modular design solutions that make disassembly and value recovery easier
• Digital sampling tools like IMAGIO® CQ to reduce material waste and maximize resource value
• Barrier coatings that unlock value from food packaging previously considered non-recyclable
• Separation technologies for multi-layer packaging materials that preserve component value

We are developing specific products and material grades designed for improved end-of-life processing, providing support to help companies redesign their products for improved recyclability.

Building Value Networks for Scale

Creating value from waste requires collaboration across the entire value chain. A key problem in global recycling is that necessary infrastructure is missing. According to the United Nations, a significant portion of the world's population has no access to regular, industrial-level waste disposal or collection systems.

We actively partner with:

• Industry consortiums like Global Impact Coalition to scale waste-to-value solutions
• Automotive partners through projects like NALYSES to optimize value recovery from headlamp recycling
• Government entities to address infrastructure challenges and create value from waste streams, such as our sewage sludge management project in India
• Chemical industry leaders in R&D hubs for innovative plastic waste-to-value processing

Our Expanding Value-Creation Portfolio

Performance Materials: Standard polymers designed with value recovery at their core, maintaining performance characteristics for demanding applications while incorporating waste-to-value circular economy principles.

Solutions & Specialties: Tailored products for specific waste-to-value applications, including polycarbonates with high recycled content and specialized barrier resins that unlock value from packaging waste streams.

Looking Ahead: The Future of Waste-to-Value

A circular economy that relies on state-of-the-art waste-to-value technologies is the solution for the future. By embracing waste-to-value creation as a guiding principle, we aim to significantly reduce plastic waste released into the environment while creating valuable resources, resilience, and economic opportunities for tomorrow's applications.

From our research facilities to pilot plants, we are committed to exploring and developing waste-to-value opportunities across a growing number of waste streams — because at Covestro, waste isn't the end of the story, it's the beginning of new value creation.

Learn more about our comprehensive waste-to-value initiatives and detailed progress in our annual sustainability report.