Pyrolysis oil is the primary product resulting from the thermal conversion of organic solid wastes, such as waste plastics and discarded tires. Historically, its pricing was predominantly pegged to traditional petrochemical products, lacking an independent, standardized benchmark. However, with the global scaling of the circular economy and the chemical recycling industry, the establishment of independent price indices is driving the transformation of pyrolysis oil from a non-standard byproduct into a green commodity. Consequently, its price formation mechanism is shifting from passive correlation to independent market-based pricing.
In the early stages of the industry’s development (prior to 2020), the global pyrolysis oil sector was characterized by small-scale production, non-standardization, and strong regionality. During this period, pyrolysis oil served primarily as a “low-grade alternative fuel,” with its supply predominantly directed to brickworks, ceramics factories, and small-scale industrial boilers. The pricing mechanism exhibited heavy dependence on the petrochemical market:
2023 marked a pivotal shift in the pyrolysis oil pricing system. Driven by the scaling of chemical recycling capacity and surging demand from downstream refineries and petrochemical enterprises, pyrolysis oil is transitioning from a functional fuel to a high-value petrochemical feedstock. Against this backdrop, independent pyrolysis oil price indices come into being as needed. It aims to establish a distinct pricing mechanism decoupled from the traditional petrochemical pricing system.
In October 2023, ICIS—a leading global authority on commodity intelligence—officially launched the Pyrolysis Oil Pricing Index. Covering the European market for pyrolysis oil derived from mixed plastics, this index stands as the world’s first independent, transparent, third-party price benchmark for pyrolysis oil.
Following ICIS’s lead, other global authorities in petrochemical commodity pricing—such as Argus and Platts—have successively followed suit. This collective effort is gradually establishing a comprehensive system of independent, trade-grade pyrolysis oil price assessments that span various geographic regions, feedstock types, and quality grades:
Current pricing for pyrolysis oil no longer hinges solely on “calorific value,” but places increasing emphasis on its “green attributes”:
Expert Observation
“In the future, pyrolysis oil will no longer be merely an inferior substitute for petroleum. With the maturation of independent price indices, it will evolve into a distinct commodity class in its own right. Its price dynamics will be driven less by the simple fluctuations of crude oil prices, and more by factors such as packaging recycling regulations, carbon tariffs, and the scale of ESG investment.”
The pyrolysis oil industry is currently at a critical juncture, transitioning from rudimentary, “homemade” refining methods toward advanced circular economy models. The emergence of independent price indices marks the industry’s entry into a new phase characterized by transparency and standardization. For investors and industry practitioners alike, monitoring the real-time weekly reports published by authoritative institution has become even more important than simply tracking crude oil candlestick charts.