This article is adapted from Circular Weekly, runnning Fridays. Subscribe here.

There’s been a noticeable uptick lately in buzz around chemical recycling, and the promise of technologies that can fix the broken recycling system. However, the technologies, terminology and applications can be confusing and are not widely understood.

Last week, the Center for the Circular Economy at Closed Loop Partners released a report (PDF) clarifying the state of the art and highlighting its potential to turn waste plastics back into new materials, decrease reliance on fossil fuels and curb the flow of plastics into marine environments.

Spurred by the growing number of commitments by brands, retailers and other stakeholders to close the loop on plastics — most notably the New Plastics Economy Global Commitment and Alliance to End Plastic Waste — the demand for recycled plastics is quickly increasing. Unilever, Procter & Gamble, PepsiCo and Danone are among those that have set ambitious goals to ensure all plastic packaging is reusable, recyclable or compostable.

The problem: Demand for recycled plastics is rapidly outpacing supply.

In the United States and Canada alone, today’s supply of post-consumer recycled plastics can meet only 6 percent of demand, which is projected to grow from 2.5 million metric tons to as much as 7.5 million metric tons by 2030. That means plastics supply chains will need to shift from lines to loops.

The problem: Demand for recycled plastics is rapidly outpacing supply. Enter chemical recycling. The current approach to recycling just won’t cut it. While traditional "chop-and-wash" mechanical recycling works well for PET and HDPE (think: water bottles and milk jugs), it cannot effectively manage the complex stream of films, chip bags, synthetic fibers and other plastics that enter the waste stream every day.

Enter chemical recycling.

According to the Closed Loop report, if the class of technologies that purify, decompose or convert waste plastics into like-new materials could help meet the growing demand for plastics and petrochemicals, it could unlock potential revenue opportunities of $120 billion just in the United States and Canada.

Here’s what else you need to know about the chemical recycling landscape:

1. Not all chemical recycling is alike. The term refers to a diversity of processes and technologies that transform waste plastics into like-new materials. The report identified three types: purification; decomposition; and conversion. (I encourage you to read the full report for a breakdown of each type.)

2. It has a couple of names. The term "chemical recycling" itself is not unanimously accepted. The report encourages referring to this umbrella of tools as "transformational technologies" to avoid confusion, but calls for efforts to create common frameworks and definitions to enable broader understanding of how these technologies can apply to different supply chains and waste streams.

3. Brands are beginning to invest in these technologies. Large brands including adidas, Unilever, P&G, Danone and Interface have signed offtake agreements with a number of chemical recycling start-ups to support their growth, and to ensure access the limited supply of recycled plastics. Plastics manufacturers Indorama and SABIC also have made strategic investments in Plastic Energy, Loop Industries and Ioniqa, and chemicals companies including BASF, Eastman Chemicals and LyondellBasell have integrated chemical recycling technologies in their own manufacturing and supply chains.

4. The technologies are slow to scale. On average, these technologies take 17 years to move from concept to growth. Given that many brand commitments to incorporate higher percentages of recycled content by 2025, the industry needs investment to accelerate growth.

5. Technology alone won’t fix recycling. "The challenges of accessing quality feedstock, reducing contamination and getting the volumes they need are all the same challenges that we see in existing mechanical recycling," said Ellen Martin, VP of Impact and Strategic Initiatives at Closed Loop Partners. "We still have to solve the system challenges that we face overall with waste plastics."

To effectively close the loop on plastics supply chains, the industry needs not only technical breakthroughs, but also scalable business models, flexible technology platforms that can evolve over time and market incentives driven by public and private policies.

That’s the formula for chemical recycling success.