Covestro and Fraunhofer Launch Smart Pyrolysis Project to Turn Plastic Waste into Valuable Chemicals
Published: 20 Mar 2026
Author: Precedence Research
From Waste to High Value Chemicals
In March 2026, Covestro and Fraunhofer UMSICHT are teaming up to tackle one of the biggest challenges in recycling, turning complex plastic waste into something useful again with strategic collaboration. They have signed an agreement to build a pilot plant that will test a new process called smart pyrolysis, which can break down tough plastic materials that are normally hard to recycle.
The focus is on rigid polyurethane foam, the kind of foam used in refrigerators, furniture, and building insulation in the current period. Usually, this foam ends up as waste because its chemical structure makes it difficult to reuse. With this new plant, the companies aim to recover valuable chemicals from it, instead of letting it go to landfills or be burned.
From Old Foam to New Insulation
The main goals of the project are to produce high-purity recycled aniline, a chemical that is a key ingredient in making MDI, which in turn is used to produce new polyurethane products like insulation panels. Also, by recovering aniline from old foam, the plant can reduce the need for fresh raw materials. This is a big step toward making manufacturing more sustainable while keeping product quality high.
The pilot plant is planned to start operating by 2028 and will process about 2 kilotons of foam waste per year. The smart pyrolysis process is designed to be precise, so the chemicals it produces are very pure, almost as good as new material. This means manufacturers can use the recycled aniline without compromising the quality of their products.
According to Towards Chem&Materials, the aniline market size accounted for USD 10.85 billion in 2025 and is predicted to increase from USD 11.45 billion in 2026 to approximately USD 18.62 billion by 2035, expanding at a CAGR of 4.95% from 2026 to 2035, due to the increased focus on recycling and sustainability.
Furthermore, the important advantage is environmental impact. By using recycled chemicals instead of producing them from scratch, the process can significantly reduce carbon emissions and overall energy use. This makes it a promising example of how industry can move toward a circular economy, where materials are reused instead of thrown away.
Also, this project is about turning waste into a resource in the current period. Also, old foam that would normally be discarded will instead be transformed into valuable chemicals, which can then go back into making new products. Both Covestro and Fraunhofer UMSICHT see this as a step forward for the future of sustainable manufacturing. If successful, it could pave the way for larger-scale recycling projects, reducing plastic waste, saving resources, and lowering environmental impact.