BRUSSELS, Sept 18 (Reuters) - ExxonMobil ( XOM ) is

pausing 100 million euros ($118.4 million) of investment in

European plastic recycling because of draft EU rules that

determine the recycled content in a final product.

The U.S. energy producer has two projects for chemical

recycling at existing plants in Rotterdam and Antwerp to process

80,000 metric tons of plastic waste per year.

However, Senior Vice President Jack Williams told Reuters in

an interview the two projects had now been paused because of the

draft EU rules he said discriminated against using existing

petrochemicals sites versus standalone facilities.

"Everything else is on track. We've had local support," he

said. "We want to make these investments... The only thing

standing between us and doing this project is EU policy."

At issue is a draft law to calculate the recycled content

based on the mass of waste going into the system and the mass of

the output.

ExxonMobil ( XOM ) says it significantly favours standalone

technologies where the path from plastic waste to output is

clearer and penalises more complex integrated facilities into

which fossil feedstocks are fed.

Williams said that, based on the draft law, its facilities

would get less than half of the credits due.

The draft has been the subject of a public consultation that

ended a month ago. Industry groups and companies, including

Finland's Neste, share Exxon's view.

The EU has targets to increase plastic recycling rates, such

as 30% recycled content in plastic bottles by 2030.

The industry says it needs to combine mechanical recycling

that reprocesses waste without changing its chemical structure

and chemical recycling, which can process more complex plastics

by breaking them down into basic chemicals.

Williams also said that although U.S. import tariffs were

not a significant problem for the company, EU regulation was.

He specifically urged the EU to repeal the Corporate

Sustainability Due Diligence Directive (CSDDD) that requires

larger companies to check if their supply chains use forced

labour or cause environmental damage.

Williams said it was complex, bureaucratic, costly, in some

cases unachievable and applied beyond the EU. The EU has already

eased the rules and delayed its implementation.

($1 = 0.8447 euros)