“There is a huge crisis in the European chemical sector, which is the mother of all industries”
The CEC working group “Innovation for a More Competitive EU” is conducting a series of interviews with top European managers. The goal is to understand their approach to innovation and determine how Europe can better support them. By analysing what is working and what is not, the initiative maintains a constructive approach to strengthening the EU’s competitive edge.
We interviewed Giulio Bonazzi, the CEO of Aquafil, an Italian listed company on Euronext, with more than 500 M in turnover, a perfect example of integrating innovation and sustainability in a chemical company.
Aquafil is a global leader in the circular economy that manufactures synthetic fibers, primarily Polyamide 6, for the flooring and apparel industries. They are best known for their proprietary ECONYL® regeneration system, which transforms nylon waste—such as fishing nets and textile scraps—back into high-quality, virgin-equivalent raw material.
Aquafil is often perceived as a chemical textile company, but in reality, it is a recycling technology platform that combines sustainability and innovation. The success of Econyl is linked to the reduction of Scope 3 emissions. Can you explain your model?
We produce synthetic fibers, mainly nylon 6 or polyamide 6, and we have always been very innovative both in the production process and in product development, to the point that we have tens of thousands of product codes.
Over the course of our company’s life, we have seen that the market began to demand our products in a more sustainable or circular form, and from that point, we started to develop a new process.
In our case, we started from an existing process—the depolymerization of our raw material, nylon 6—and developed it in such a way as to be able to recycle waste that mainly comes from post-use, so not so much clean waste that is easy to recycle, but very complex waste to recycle.
This is our flagship product and what we are very well known for.
Success is also linked to reducing CO2 emissions in terms of sustainability.
But be careful, these things do not come from nowhere; you cannot suddenly decide to develop something like this. This is a journey, a path that continues to be nurtured as one faces increasingly technologically challenging problems.
What has been the most difficult obstacle for you to overcome? The chemical challenge of depolymerization or creating a recovery logistics for fishing nets and carpets?
It’s a combination of things. Unfortunately, the chemical part is relatively easy if I can feed clean waste to the reactors. It’s much more complicated if I feed waste containing many non-nylon-6 components into the reactor.
At the beginning, we focused a lot on the chemical part, in the mistaken belief that it would be relatively easy to find the waste. Then over time we realised, as the process grew in scale, that one thing is finding 5,000 tons per year of waste, another thing is finding half a million tons (there are really very few clean nylon 6 wastes).
It is clear that at this point there is a need to develop technologies capable of accepting many more materials.
The hardest thing for Aquafil was not Econyl, but rather transitioning many years ago from being a company that followed market leaders, who dictated the technology, to being the market leader ourselves, proposing innovative products and processes.
Today, the difficulty is maintaining leadership. Econyl is part of this effort.
In a commodity market, how are you protecting your positioning against competitors who use mechanical recycling?
Chemical recycling and mechanical recycling are a world apart: mechanical recycling degrades the material, so it never produces a product that is perfectly substitutable for the original.
Instead, with our type of chemical recycling, we produce a material that is perfectly substitutable for the one derived from oil, without limitations in performance or aesthetics.
Are you premium priced?
Yes, we are premium. But on the statement that we produce commodities, the answer is yes and no.
What we produce from chemical recycling is a monomer and, therefore, a commodity, and it is more difficult to differentiate.
But what I often sell is a yarn. Just to give a quantitative order of magnitude, the monomer might be worth €1.50–1.60, while the yarn might be worth €5–7. So it is obvious that the ability to create specialization in the yarn is much broader than in the monomer. Then there’s Prada, which even sells my material per kilo at a price a thousand times higher.
I would like to delve deeper into the issues related to the circularity of products. In the end, is this circular economy more economical or do you still have to pay a price for it?
From our 15 years of experience, at the beginning it is not more economical, but it can become so.
In polyamide 6, it was definitely a more expensive process at the start; today it still is depending on the type of waste we manage to source; moreover, the competitive comparison is changing, because if once we competed with European producers, today we compete with Chinese producers, with very different prices.
But it can become more competitive if a system designed for the circular economy is implemented, so products developed from start to finish can be collected and recycled; today, it is not like that.
This is the problem: looking at the fishing net, one thing is if today I simply optimize its production cost without considering its disposal or recycling, another thing is if I incorporate into the initial cost also the responsibility for the product’s end-of-life, so maybe I can make a fishing net that is a bit more expensive at the beginning because instead of putting polyolefin material ropes, I put them in nylon, making the final recycling much less expensive because I don’t have to waste time separating.
Recycling by design, right from the start. The redesign of products is crucial to reducing costs on the recycling side.
What are your current challenges, and how do you use innovation to solve them?
Our current challenges are certainly about continuing to make the product more competitive. The other challenge is to introduce circular economy concepts into product design so that, in the end, collecting materials for treatment becomes a simpler process.
When moving from the recycling economy to the circular economy, the big problem that people have not yet understood is that in the recycling economy, a single company in the value chain can operate alone (from raw material to final product); whereas in the circular economy, collaboration of the entire value chain is needed to optimize the overall cost.
I’ll give a concrete example. BMW wants to introduce circular mats in its cars and is launching a market call to select a supplier. At first, it pays a higher cost, obviously helping the market.
But it is clear that besides BMW, the mat producer and Aquafil (producing fibers), there will also need to be someone who collects the mats at the end-of-life of the cars (the workshop, the dealership).
In the circular economy, you involve everyone: it’s not enough for Aquafil to provide recycled and recyclable yarn; the mat must be designed to be recycled, the car producer must adopt it, and someone at the end must collect it and send it back.
In what way do you use innovation to address these challenges?
To solve these kinds of problems, we do two things.
First, we try, within our capabilities, to invest in research and development, because unfortunately, only research helps solve certain problems.
Second, we continue to work with the entire value chain of our industries, whether in textiles, plastics, or textile flooring, to find partnerships with companies interested in developing products that meet the needs of the circular economy.
So, innovation on both the production side and in partnership models across the entire supply chain for secondary raw materials.
What is missing to truly achieve the circular economy?
The first thing missing is legislation that holds every industry responsible for the raw materials it consumes and the waste it generates.
This is easy to say, but very complicated to implement with real procedures and steps.
What is your approach to innovation? Internal R&D, open innovation, acquisition of startups?
It is very pragmatic. Clearly, we are a company with limited investment, research, and development capacity. We cannot spend 50, 100 million or a billion a year on research and development.
We have an internal research and development office, a series of pilot plants on which we have invested, and sometimes we have even managed to get some non-repayable grants, both at the local and European levels.
We continuously collaborate with universities and research centers, depending on the topic, which can be local or foreign, or the National Research Center or Bruno Kessler Foundation. In short, depending on the topic, you go looking for the counterpart that has more expertise and interest in investing.
It has also acquired other companies, for example, those active in waste collection, carpet recycling, or fishing net recycling. Clearly, if there are already things available, you acquire them.
DRIVING INNOVATION
Who drives innovation in your company?
I believe it is a fairly widespread culture in the company. Clearly, the CEO is always a fundamental driver because if there is no CEO pushing and providing resources, it becomes a problem.
In our case, the business managers and often the industrial directors or the engineering office are very involved in this process. Innovation is distributed across the various divisions.
We have both product and process innovation, at the business and plant level; we also have pilot plants.
If we have a raw material that then goes into different businesses, some stages of research on this material can be centralized, with pilot plants that serve that purpose. Innovation costs.
Do you participate in European research and financing programs like Horizon? What are your financing sources?
In the past, it was mostly the Autonomous Province of Trento (in the Northeast of Italy) that had more resources, and therefore, it was relatively simple, fast, and likely to obtain them. Then the Italian Ministry of Research and Development. We have also used European funds, both Horizon 2020 and others.
For example, the latest call we got now, right from the Italian Ministry of Research and Development, is for a project worth over 6 million, in association with us, the University Polytechnic of Turin, plus other companies.
Italy and Slovenia are the two places where we have the most research activities.
Financing sources depend on where and what you want to do. For a research project in Slovenia, obviously, I have to look for something that is either at the Slovenian level or at the European level.
What is the hardest part in carrying out these research projects? Regulations, financing, cross-border collaborations, bureaucracy?
The hardest part is obtaining the funds, but be careful: it is rare for a research project to be born solely because there is funding. Projects start from company interests; then the funds come in: I would do the project anyway, but if you give me funds, I will do it bigger and faster.
Projects, especially those financed by the Italian Ministry of Research and Development, do not cover all expenses anyway.
Research projects, the most interesting ones, start small and end big, so maybe you got 3 million in funding, but in the end you spent much more, because in the meantime you have obtained results.
At CEC Euroean Managers, we are dealing a lot with lifelong training and how to keep managers’ skills updated. Do your managers have the necessary skills to drive innovation? What do you do for their training?
In this period, managers are overwhelmed; our problem is understanding what happens to raw materials, if ships are sailing, oil, gas—you can imagine the chaos we are living.
Over the past six years, from the upheaval of Covid to the war in Ukraine and the impact of tariffs, we have faced a succession of extraordinary crises that keep us in a constant state of reaction, making it difficult to step back, regain perspective, and look ahead.
In terms of our managers’ skills, we are not doing badly compared to the competition; I, however, am a person who is never satisfied, I always see the glass half empty and never half full, but this is also, in my opinion, how the CEO’s approach to work should be: if you simply stop to look at the results achieved and the successes, you don’t look at what went wrong and you never move the company forward.
I’m also a manager of the old generation, so I definitely have a lot of expertise on the traditional business of my company, but much less on new technologies, Artificial Intelligence, or other things.
I obviously try to be interested: I read, I go to conferences, I try to interact, but one thing is being an expert in these technologies; another is being someone who tries to understand where they are applicable.
Do you have specific programs for your people or do you hire from outside someone with the right skills?
Hiring from outside is very rare, but not impossible. It is rare to find someone from outside with the right skills, because our sector has very few players.
While once, when Aquafil was small, but there were Snia or DuPont, I could go look for a manager from those companies. Today, those companies no longer exist, so you have to train your own people internally.
If, however, you need a person very strong in chemical process management, you can go look for a manager who has experience in other chemical processes, with an open mind and a willingness to learn.
We train people both on the job, as well as by rotating them.
A job we try to do, which my managers from competitors say we do a hundred times better, is to circulate information as widely as possible between one plant and another.
We have working groups made up of people from all over the world, a decided approach also to stimulate knowledge sharing and participation from management.
Otherwise, the risk is that everyone goes their own way, and you don’t know what the US plant is doing from the one in China; you study the same problem in two and arrive at two different solutions. But synergies are very easy and nice to write on paper, but much more complex to realize in reality.
In America we achieved the first patent for separating a mixed nylon and elastomer fabric, with work done with Georgia Tech.
At Georgia Tech you don’t graduate if you don’t do a research project, even more so if you do a PhD; so every now and then with them we do projects and sometimes we try to hire those who worked with us. This is somewhat part of this learning chain.
PROPOSALS FOR EUROPEAN RULES
Let’s broaden the view. The recent simplifications of the Omnibus package (CSRD/CSDDD) reduce bureaucratic burdens for many companies, but Aquafil remains in the scope. What do you think of this “simplification”?
I believe, and I hope, that over time this kind of activity will become more and more refined, because as I saw it, it is very bureaucratic and very little effective from a reporting point of view.
Unfortunately, in Europe, we often create over-regulation because we first adopt a directive voted on by the European Parliament, then each member state has flexibility in its application, and we end up with 27 different pieces of legislation. In short, better regulations than directives.
So those who work in multiple European countries end up with a series of quite complicated forms to fill out. But once you learn to do it, you have a competitive advantage; before the competitor gets there, they suffer the pains of hell!
Now there is a lot of discussion in Europe about the DNSH principle, Do Not Significant Harm, and Confindustria (Italian enterprises federation) has also strongly criticized the principle saying it blocks all funding to sectors that must make a transition from brown to green.
I am already making the transition! My greatest interest is to understand how this will reverberate on finished products.
I see what is happening in other parts of the world. In China, they started ten years after us but, they’ll arrive ten years before us, because they are faster and more efficient, and this will be another business opportunity that we will probably lose.
Even in terms of recycling?
Yes. For example, when the European Community was studying the end-of-life vehicle directive in a circular perspective, we had requests to visit us from Japanese and Korean companies, none from European companies.
One might think that maybe the European company has already made an agreement with BASF. But we are ten years ahead of BASF. This means that the Japanese have done a reconnaissance of what the market offers.
I had a Honda delegation visit, where there was the worldwide head of sustainability of Honda, who came here from Japan with 20 people. Another 20 were on videoconference and we are already at the third meeting.
I have seen zero Europeans.
But why?
Because if I am in China and the Chinese government issues a law, I comply immediately.
The problem is that in Europe, we start from the idea that, anyway, in the end, the law will be reduced or postponed.
The Japanese, the Korean prepare in time, start planning. For the Chinese, then, the government does the planning!
So, to summarize, Asia’s advantage is that there is certainty of regulations and their compliance, and in China, there is the will and capacity to plan.
The new End-of-Life Vehicles Regulation will require producers to use 15% plastic from post-consumer waste. Toyota is already opening a plant in Europe to dismantle cars, centralizing the activity.
This is obviously only the first step, because now they start designing cars so that in the end they are dismantled more economically; probably in a few years, they will be the ones supplying recycled products from the automotive sector to car producers.
If Toyota has the factory, it will comply with the regulation, so maybe it doesn’t have to pay the fine. If it can do it economically, it gains a competitive advantage.
What is happening is that the Chinese government studies European directives and holds meetings with Chinese producers to explain, for example, what the cross-border carbon tax is, or the circular economy directive in the sector. I know, because it invites us too.
Chinese companies are starting to prepare to avoid penalties.
But China is also doing something else. The new five-year plan includes a lot of goals on the circular economy of textiles, automotive, etc., and the Chinese five-year plan is a serious matter that must be addressed. The provinces are equipping themselves for waste collection, not like here in Europe, where they say consortia will be created, in fact private entities.
In China, municipal companies are equipped to collect and properly manage waste, so they can achieve economies of scale much faster and make waste available at a more competitive cost than we can here in Europe.
A couple of months ago, I was talking with the Volvo innovation director, who said the same things. Sure, Volvo is owned by a Chinese company!
The Chinese are behind us Europeans, but probably in four or five years they will not only have caught up but also overtaken us. It’s a matter of management, governance, and standardization.
I receive dozens of solicitations a day to go to China to build a chemical recycling plant from various city mayors (who are also party secretaries, because the two roles overlap), who offer to make available everything needed—land, buildings, competitive electricity price—they ask me for indications on how to collect waste, etc.
Here in Europe, no one does anything.
Much of Italian research and innovation today is managed with European-derived funds. Which mechanism do you find most efficient: assigning funds centrally from Europe (EIC/Horizon model) or to individual countries, giving Italy the choice of how to use them?
It would be desirable to bring them back to the national level, so proportionally to the various states. Because, unfortunately, in Europe, there are countries that are more organised than us and get more funds.
The European Union does try to apply geographical correctives to avoid giving all the funds to the Swedes (who are phenomenal!), and to give space to smaller states, trying to apply incentive systems for the various countries and not simply a meritocracy ranking.
The EU Commission launched the Clean Industrial Deal in 2025, designed for energy-intensive industries and the circular economy. In March ’26, the Industrial Acceleration Act was presented to promote low-carbon made in Europe products. How do you rate these measures?
I don’t know, we’ll see what happens, but one thing Europe should have done already ten or fifteen years ago is public procurement, for example, rewarding sustainable and recyclable products with 5%: that would have been a great stimulus.
Instead, it only gave generic indications to favor products with certain characteristics and everyone felt free to do nothing.
Only now are they starting to talk about it seriously.
In what way can the EU help you? Better to focus on legal market protection (tariffs/carbon tax) or direct incentives to companies (facilitated financing)?
There is a huge crisis in the European chemical sector, which is the mother of all industries.
I recently participated in a meeting with European chemical associations, with the European Commissioner who said, “tell me which molecules, sites we need to protect and in three months we’ll give you the money to do it.”
But there are 27 countries and unfortunately it is a scattered distribution, not effective, and there is a risk of squandering one’s treasure also among companies that have no future or are not virtuous.
Often the mere reduction of burdens is the fastest way to reward virtuous companies. Specifically, the cost of energy and the cancellation of ETS in my opinion would be the first action the European Union should take. But it doesn’t because it is a major source of financing for it.
Instead, the EU carries out highly unfair measures, like the cancellation of excess quotas, last year 3 billion.
For example, I make investments to reduce emissions.
Then two things happen. First, that quotas cannot be bought only by those who actually emit, but become an investment tool, so funds speculate on them.
Second, the European Union cancels the quotas. So I need an explanation: you told me to make an investment so I save money, then you do everything in your power to keep the price high and in the end, I haven’t saved anything and I pay more and more.
Maybe my European competitor pays more than me, but my Chinese, American, Indian competitor does not pay EU quotas.
A cross-border carbon tax should be approved: a fantastic law from a philosophical point of view, but utopian, because it will never be possible to apply an effective compensation mechanism.
If you could ask Mrs. von der Leyen for just one initiative, one program, one rule to accelerate innovation, what would you ask for?
Oblige the 27 member countries with sustainability rules in public procurement.
Because it is an enormous expense, so it is a very powerful orientation tool and it is much more likely that we Europeans will benefit from it compared to Chinese or Asian companies, especially when talking about national or local tenders.
For the competitiveness of European companies, do we need more or less Europe? A stronger Europe, with more powers or with less?
We need more Europe, but not a bureaucratic Europe like today’s, but a federal Europe, where some laws are the same in all 27 countries.
The interview was conducted by Silvia Pugi, in collaboration with Gaetano Iaquaniello
