A unique circular economy value chain supports the recycling of label waste from UPM Raflatac, ensures the availability of PET raw material for Inosence Polyol, and increases the share of recycled materials used in the production of Finnfoam’s insulation products.

During the innovative chemical recycling process, the recycled PET plastic, silicone included, is melted using a glycolysis process at a high temperature until it becomes fluid. Following the various distillation and processing stages, PET plastic is transformed into a liquid raw material used for plastic. Finnfoam utilizes the material in the production of its effective FF-PIR insulation products, thus replacing virgin plastic materials with a recycled alternative. Inosence Polyol chemist Jacob Veldmeijer can be seen in the above photograph.

UPM Raflatac Oy, Inosence Polyol Oy,  Finnfoam Oy have created an innovative cooperation model that further improves resource efficiency. Under the concept, UPM Raflatac collects PET process waste that has traditionally been difficult to reuse from its customers, which is then processed into polyol using the process developed by Inosence Polyol.

Finnfoam utilizes the resulting polyol in its production as one of the two main materials used in the production of polyisocyanurate, i.e., FF-PIR insulation products. Starting last spring, Finnfoam has begun to increase the share of recycled polyol used in the manufacturing of its FF-PIR insulation products, and by autumn, virgin plastic should be completely replaced with a recycled alternative.

As a whole, the recycling of PET plastic, such as beverage containers, is already relatively effective on the European level. In Finland for example, more than 90 percent of PET plastic bottles are recycled. The method developed by the trio of Finnish companies is thus focused specifically on PET waste that is difficult to recycle, and for which traditional mechanical recycling methods have been unsuitable. The recycling process has even managed to increase the processing value of the material.


Approximately 80 percent of the backing material used for adhesive labels consists of paper, and established recycling processes exist for such materials. Challenges have been posed by the remaining 20 percent, which has, until now, formed a significant waste stream.

This fifth of the backing material for adhesive labels consists of PET-based films that consist of plastic coated with an extremely thin layer of silicone. The silicone coating allows the label to be detached evenly from the backing. These fractions have been difficult to sort separately, which is why PET backing films have previously been disposed of through incineration.

“Recycled PET plastic is often used for disposable or non-durable products. In our solution, the recycled material is used in the production of insulation products, which are durable goods that bind carbon dioxide for decades. Our value chain also withstands critical examination, and we have managed to slightly improve sustainability in the label industry as well through our work”, says Juha Virmavirta, who is in charge of the RafCycle™ recycling service at UPM Raflatac.

UPM Raflatac recovers PET-based label film from its customers, some of which is then used by Inosence Polyol in the production of polyol. The material stream consisting of PET film collected by UPM Raflatac ensures the availability of raw material for polyol production that is consistent in terms of both quality and volume.


PET plastic provides the tensile strength required by the high-speed manufacturing process of backing materials for adhesive labels. This also allows for very thin backing film with a thickness of just 20–30 microns, i.e., millionths of a millimeter.

Minimal thickness is essential to the manufacturing process: thinner material takes up less room on a roll of labels and thus reduces the need to replace empty rolls. However, the extremely thin material is difficult to process during recycling.

“When the PET backing strip is crushed at the beginning of the recycling process, the resulting lightweight plastic medley is hard to process. The development of the sorting process took us two years”, explains Sami Häkkinen, CEO at Inosence Polyol.


In addition to processing the finely shredded PET, another challenge that needed tackling was the separation of silicone from PET plastic, which cannot be achieved through mechanical methods. Thus, Inosence’s process is based on glycolysis, where the recycled PET plastic, silicone included, is melted under a high temperature until it becomes fluid.

Following the various distillation and processing stages, PET plastic is transformed into a liquid raw material used for plastic. As polyol and silicone differ significantly from each other in terms of density, they can be filtered and separated during the process.

“Filtration during the process is extremely precise on the whole. Fine-grained impurities are removed from the material with a tolerance of up to one micron.

Inosence Polyol’s production plant is located in Salo, approximately one kilometer from the site of Finnfoam’s plants. The technical production capacity of the plant is up to 10 000 tons of polyol per year.


Finnfoam’s plant in Salo manufactures popular FF-PIR insulation products, which offer the best insulation performance on the market. In addition to MDI or isocyanate, polyol is one of the two main raw materials used for FF-PIR insulation products.

“Our solution provides a fine example of the possibilities offered by chemical recycling. It allows us to separate and recycle many materials that have traditionally been difficult to process separately. New cost effective and environmentally friendly recycling methods will also affect legislation, leading to a further increase in recycling obligations and reducing the amount of waste disposed through incineration, which is of course a good thing”, says Finnfoam CEO Henri Nieminen.

With a decades-long history of investment in recycling and circular economy solutions, Finnfoam is currently building a chemical recycling plant for polystyrene in Salo.

“It has been my personal view for decades that there are no waste materials, only raw materials. We just have to figure out how to utilize those materials”, Nieminen sums up.

Additional information:

Juha Virmavirta, Director, RafCycle Solutions, UPM Raflatac Oy, tel. +358 40 504 7899

Henri Nieminen, CEO, Finnfoam Oy, tel. +358 400 636 992

Sami Häkkinen, CEO, Inosence Polyol Oy, tel. +358 400 733 475


UPM Raflatac is a pioneer in innovative, smart, and sustainable adhesive label materials and services. We offer high-quality label materials for branding and advertisement labels, informational labels, and functional labeling. We have a global network of plants, distribution terminals, and sales companies. We have approximately 3 000 employees, and our revenue in 2021 was 1.7 billion euros. UPM Raflatac is part of the UPM group. We develop innovative, sustainable, and smart label solutions for the future to offer an alternative to products made from fossil raw materials. Read more at


With 40 years of experience, Finnish family business Finnfoam develops and offers the most advanced solutions for structural energy-efficiency that can be used to reduce the carbon footprint of a building during both its construction and use. Finnfoam Group is a well-known trailblazer in ecological construction, and Finnfoam’s innovative development activities have made it a leading manufacturer of plastic-based thermal insulation products in the Baltic Sea region. Our expertise, high-quality production, and customer-oriented approach ensure safe solutions for all insulation needs. Today, the company’s range comprises all hard and mold-proof thermal insulation products used commonly around the world, including FINNFOAM (XPS), FF-EPS and FF-PIR, and Tulppa wet room panels. Finnfoam has plants in Finland, Sweden, Estonia, Lithuania, and Spain. The company’s head office and research and development unit are located in Salo, Finland.


Inosence Polyol Oy is a Finnish-Dutch chemical company founded in 2016. Since 2019, Inosence has produced polyester polyol and ethylene glycol based on recycled PET plastic at its plant in Salo. Inosence has developed its own polyester polyols and a unique manufacturing process, which comprises a high-precision filtration system that produces genuinely pure end products.

Inosence has acquired robust knowledge of polyurethane applications, and one of its strengths is the option to produce customized polyol solutions for the end users of polyurethane.