Pyrolysis and incineration both treat waste with heat, but they are not the same thing. Incineration burns plastic with oxygen and, at best, recovers part of its energy; pyrolysis breaks it down without oxygen and produces oil, gas and char that go back into the economy as feedstock or as an energy product. That difference changes their position in the waste hierarchy, their tax treatment and their business model.
Two thermal processes with opposite logics
From the outside they may look similar: in both cases waste goes in and heat is applied. The difference lies in the chemistry and the purpose.
Incineration: combustion with oxygen
Incineration burns waste in the presence of excess oxygen. The organic matter oxidises and turns into flue gases, mainly CO2 and water vapour, leaving slag and ash behind. EU industrial emissions legislation requires the gases to reach at least 850 °C for a minimum of two seconds to ensure complete combustion.
Its main purpose is to reduce the volume of waste and dispose of it in a controlled way. Many plants recover the heat to produce electricity or steam, but the material disappears: the plastic no longer exists as a resource.
Pyrolysis: decomposition without oxygen
Plastic waste pyrolysis heats the material in an oxygen-free atmosphere. As there is no combustion, the long polymer chains break into shorter molecules. The carbon is not released as CO2 up the chimney but is retained in the products.
The result is three usable outputs: pyrolysis oil, gas and a carbonaceous solid or char. You can see how they are used in detail in what products pyrolysis generates and what they are for.
Comparison table: pyrolysis versus incineration
| Criterion | Incineration | Pyrolysis |
|---|---|---|
| Oxygen | With excess oxygen | Without oxygen |
| Reaction | Combustion (oxidation) | Thermal decomposition (cracking) |
| Main product | Heat, flue gases, slag and ash | Oil, gas and char |
| Fate of the carbon | Emitted as CO2 | Retained in the products |
| Position in the hierarchy | Energy recovery or disposal | Recycling if the product becomes feedstock again; recovery if it is used as fuel |
| Typical scale | Large centralised plants | Modular plants, possible next to the point of generation |
| Revenue | Gate fee and sale of energy | Gate fee, sale of products and environmental credits |
| Spanish state waste tax | Subject to the incineration tax | Does not apply to pyrolysis whose product is used as feedstock |
The waste hierarchy: where each one fits
The Waste Framework Directive, Directive 2008/98/EC, sets out in its Article 4 an order of priority that Member States must apply in their waste policy:
- Prevention.
- Preparing for re-use.
- Recycling.
- Other recovery, for example energy recovery.
- Disposal.
Spain transposes this framework in Law 7/2022 on waste and contaminated soils for a circular economy (Spain’s Waste Law). The key lies in the definition of recycling: any recovery operation by which waste is reprocessed into products, materials or substances, but excluding energy recovery and reprocessing into materials that are to be used as fuels.
Incineration, on the fourth or fifth rung
Incineration only counts as energy recovery, operation R1, if the plant achieves a minimum energy efficiency: 0.60 for installations permitted before 2009 and 0.65 for those permitted afterwards. If it does not, incineration is a disposal operation, the bottom rung.
Pyrolysis can climb to the third rung
Pyrolysis does not occupy a single rung. The part of the product that goes back to the chemical industry as feedstock to make new materials counts as recycling. The part used as fuel is considered recovery. That is why the destination of the oil and its traceability matter so much, and why pyrolysis is one of the routes of chemical recycling of plastics.
Emissions and environmental impact
In incineration, the carbon in plastic, which comes mostly from crude oil, is released into the atmosphere as fossil CO2 at the moment of combustion. In addition, the gases must be cleaned to control pollutants, and the fly ash requires specific management.
In pyrolysis, the absence of oxygen prevents the waste from combusting inside the reactor. The carbon remains in the oil, the gas and the char. If that oil replaces fossil feedstock in the manufacture of new plastic, the extraction of virgin resources is avoided. If it is used as fuel, the carbon will end up being emitted in its end use, albeit displacing a conventional fossil fuel.
The real environmental balance therefore depends on where the products go. That nuance is the same one European legislation applies when deciding what counts as recycling.
Regulatory and tax fit in Spain
Law 7/2022 created a special tax on the landfilling, incineration and co-incineration of waste, in force since 1 January 2023. The state rates published by the Spanish Tax Agency (Agencia Tributaria) for municipal waste are:
- Non-hazardous waste landfill: €40/t for municipal waste and €30/t for municipal waste rejects.
- Incineration with R1 efficiency: €15/t for municipal waste and €10/t for rejects.
- Incineration as disposal (D10): €20/t for municipal waste and €15/t for rejects.
Spain’s autonomous communities (regional governments) can increase these rates in their territory. When pyrolysis oil is used to make new materials and is not burned, the process is neither landfilling nor incineration, which are the activities this tax is levied on. If the pyrolysis products were used as fuel, the installation could indeed be treated as incineration, which is why the destination of the oil is decisive.
On top of this comes the pressure on landfill. Directive (EU) 2018/850, transposed in Spain by Royal Decree 646/2020, limits municipal waste sent to landfill to 10 % of the amount generated by 2035. We analyse the timetable in zero landfill by 2035: what the EU requires.
Finally, Regulation (EU) 2025/40 on packaging and packaging waste sets minimum recycled content targets for plastic packaging for 2030 and 2040. Incineration contributes nothing to those targets. Pyrolysis, with certified mass balance, can.
The economics of each model
An incinerator is a large piece of infrastructure, usually centralised, that needs a high and stable flow of waste for decades to pay for itself. Its revenue comes from the gate fee paid by whoever delivers the waste and from the sale of energy. Once built, it tends to need waste in order to operate, which can clash with reduction and recycling targets.
Pyrolysis allows smaller-scale modular plants, located close to the source of the waste. Its income statement combines several sources:
- The savings or the gate fee for managing waste that would otherwise go to landfill or to taxed incineration.
- The sale of the oil, the gas and the char.
- The environmental credits associated with certified material, for example through ISCC PLUS.
The key risk in pyrolysis is securing the sale of the product over the long term. That is why models with guaranteed offtake and structured financing reduce uncertainty for the developer.
How Nantek solves it
Nantek uses thermal pyrolysis without catalysts, with in-house developed reactive agents, and accepts mixed plastic without prior sorting by type. It has validated its technology since 2022 at its industrial plant in the Port of Bilbao with plastics from a range of sources.
Its range of modular plants runs from 1,500 to 16,000 tonnes a year. Nantek’s model covers the whole cycle: turnkey EPC with fixed scope and price, structured financing of up to 70 %, O&M with remote monitoring and proprietary software, guaranteed offtake of 100 % of the product under long-term contracts and management of environmental credit certification, with part of the net profit passed on to the client. Its website displays the ISCC, ISCC PLUS and CGN certifications, and it is registered with ECHA.
In Córdoba, in 2025 Nantek signed an agreement with Sadeco and the City Council for a first phase of 16,000 t/year, with an investment of €22 million, and a planned expansion to 54,000 t/year and €65 million in total.
Frequently asked questions about pyrolysis and incineration
Is pyrolysis a form of incineration?
No. Incineration burns waste with oxygen. Pyrolysis breaks it down without oxygen, and the waste does not combust in the reactor.
Which ranks higher in the waste hierarchy?
Recycling ranks above energy recovery. Pyrolysis counts as recycling when its product becomes feedstock again; incineration is, at best, energy recovery.
Is incineration taxed in Spain?
Yes. Since 2023, Law 7/2022 has taxed waste incineration at state rates of between €10 and €20/t for municipal waste and its rejects, which the autonomous communities can increase.
Does pyrolysis emit CO2?
The process consumes energy, but the carbon in the plastic remains in the products instead of being emitted up a chimney. The final emissions depend on whether the oil is used as feedstock or as fuel.
What plastic can be treated by pyrolysis?
It depends on the technology. In Nantek’s case, mixed plastic without prior sorting by type, including the rejects that mechanical recycling cannot use.
If you currently pay to incinerate or landfill plastic rejects, we can calculate what changes when you recover them through pyrolysis. Tell us about your case and we will study its viability.
