EU report calls for stricter legislation as plastics recycling industry enters “recession”

A new European Commission report has found that the EU’s plastics industry and recycling market is undergoing a recession, with investments dropping and imports rising. Experts at Plastics Recyclers Europe (PRE) warn policy implementation gaps and loopholes have left many recyclers struggling to survive in a market increasingly saturated with uncontrolled imports that fail to meet EU standards.

The report, The Future of European Competitiveness, argues that plastics recycling currently lacks a “strong business case” and remains unprofitable for producers. Virgin materials remain cheaper, with carbon pricing factored in, while landfill and waste incineration costs are still low. Additionally, earning a “green premium” for recycled plastics is challenging due to the higher costs and often limited quality of the secondary material. 

According to PRE, the declining demand for Europe-produced recyclates, reduced investment in domestic recycling and rising imports of recyclates from outside the EU have constrained the European plastics recycling industry in recent years.

Ton Emans, PRE’s president, tells Packaging Insights: “Imports of polymers into the EU are negatively affecting the EU’s plastic recycling industry. As the latest figures and market trends show, they lead to a lowering demand for EU recyclates.”

“Whereas EU recyclers must adhere to strict legislation and safety requirements, there are no equivalent conditions currently in place with regard to the EU for imports, which often lack verification.” 

Current challenges

The organization warns that despite efforts by the EU to enhance circularity with the Packaging and Packaging Waste Regulation, many recycling companies went out of business in 2023, with further closures happening or planned in the course of 2024. 

Ton Emans, Plastics Recyclers Europe’s President.“There are no legislative-mandated recycled content targets for food contact applications in exporting countries. This, in turn, makes it extremely challenging for European recyclers to compete with them,” says Emans.

“On top of this, these imports are continuously increasing, putting further pressure on the European market, where we see a surplus of stock. An example of this is the PET sector, where there has been an alarming 60% growth in imports between 2021 and 2023.”

Ensuring a fair market

Emans points out that without the necessary measures, the future of European plastic recycling appears uncertain, making investing unsecured.

“It puts in jeopardy the progress made in the last decade to continuously improve and advance recyclability, quality and sustainability in the sector. To create a level playing field that ensures fairness, all market players must meet the same safety and environmental requirements,” he highlights.

“Independent third-party certifications are one of the solutions. They prove traceability by verifying waste origin, recycling processes, and supply chains. These should follow a chain of custody model and be strictly enforced to prevent greenwashing, ensure consumer safety and meet EU environmental goals.”

“Furthermore, it will be important to favor the principle of true pricing to safeguard the European plastic economy,” he adds.

Strengthening enforcement 

PRE says the European Institutions need to create immediate measures to solve the key issues threatening the existing plastics sorting and recycling infrastructure.PRE points out that it is necessary to enforce core pieces of legislation in a timely and effective manner. It underscores that the current situation “undermines the progress and investments made to improve recycling processes.”

Eman emphasizes the importance of legislation enforcement. He suggests that the existing rules have not been properly checked by authorities, thus leading to uneven implementation across the market.

However, the organization believes the newly elected EU Institutions have the opportunity to take a positive turn, driving progress to the establishment of a “genuine circular single market” for plastic waste and recycling.

“The ambitious targets set by such legislation must be backed up with robust methodologies. With this, creating incentives for the use of recyclates while supporting investments at the EU level will be key to securing the long-term competitiveness and resilience of the EU’s plastic recycling industry,” concludes Eman.