In Conversation: Intensified Collaboration with Chinese Recycler Ausell
Covestro is strengthening its collaboration with Chinese plastics recycling specialist Ausell through a new initiative aimed at establishing a closed-loop system for automotive plastics recycling in China. As the world’s largest auto market, China is projected to generate 2.3 million tons of plastic waste annually from end-of-life vehicles by 2027. We spoke to Lily Wang, Head of Engineering Plastics at Covestro, and Xia Wenjun, CEO of Ausell, about how this initiative works and why it matters.
How did this cooperation begin, and why did you choose each other?
Wang: We’ve been working with Ausell on a successful recycling project since 2020. This initiative has allowed us to annually recycle a significant amount of polycarbonate materials, transforming them into high-performance post-consumer recycled (PCR) materials that find new applications in electronics, home appliances and automotive industries.
Our partnership has provided us with extensive expertise and experience in PCR solutions, including product and application development and quality control. This solid foundation allows us to deepen our partnership with Ausell, specifically focusing on recycling plastics from end-of-life vehicles.
Xia: Ausell was one of the early players in polycarbonate recycling in China, which is now the world’s largest auto market. Covestro, as the inventor of polycarbonate, aims to be fully circular and has a strong presence in China – this makes us ideal partners in advancing plastics recycling from end-of-life vehicles. We believe this collaboration can accelerate recycling in the auto industry, and there is significant demand for such recycled products from the auto industry.
What is the current state of car-to-car plastic recycling in China?
Xia: With China’s continued growth as the largest auto market, the number of end-of-life vehicles is rising each year – from around 4.6 million vehicles scrapped per government regulations in 2023 to an estimated 7 million in 2024, driven by the government initiatives encouraging the replacement of older vehicles. By 2027, these scrapped vehicles are expected to generate 2.3 million tons of plastic waste annually, providing a stable source for recycling initiatives like ours.
However, car-to-car plastic recycling in China is still in its early stages, facing challenges in efficient collection, sorting and cleaning, as well as in integrating recycled materials into new car components.
Wang: With China’s leadership in automotive manufacturing and its commitment to sustainability, the country is expected to follow Europe’s lead in introducing stricter regulations for end-of-life vehicles, including requirements for recycled content in new cars. We believe demand for such products will grow, driven not only by these potential regulatory changes but also by automotive OEMs’ own sustainability goals. In fact, we’re seeing OEMs increasingly work with value chain partners to explore low-carbon and circular materials, aiming to achieve their sustainability targets.
What are the main obstacles to scaling up this new initiative?
Wang: As Mr. Xia mentioned, efficient recycling is certainly a challenge, along with the high cost of PCR materials. We need more like-minded partners to join forces in building a robust market that all partners in the value chain—especially car OEMs—are committed to and can benefit from. I believe our partnership will play a crucial role in accelerating development by advancing recycling technologies and finding practical applications for recycled automotive plastics. This collaboration is a promising step toward a sustainable automotive value chain in China.
Why start with headlamps?
Xia: Plastics are used in various parts of cars, but headlamps are typically made entirely from polycarbonate as a mono-material, making them highly valuable from a recycling and reuse point of view.
How will this initiative work?
Wang: Ausell will handle the collection, sorting and shredding of polycarbonate headlamps, then clean and pelletize them before sending them to Covestro. Covestro will process them into high-quality PCR materials for various automotive engineering applications.
What would you like to achieve out of this strengthened partnership?
Wang: Through our collaboration with Ausell, Covestro aims to gain valuable insights and practical experience to further support the automotive industry’s green transition. This partnership will help us drive greater adoption of circular materials, ultimately facilitating a more sustainable approach across the automotive value chain.
Xia: This initiative brings together a full spectrum of value chain players—from end-of-life vehicle recyclers and dismantling companies to shredding and cleaning specialists, compounders, automotive parts suppliers, and even OEMs. United under China’s dual-carbon goals of achieving peak emissions by 2030 and carbon neutrality by 2060, we’re building a new business model that supports low-carbon development with full traceability for recycled materials.