Recycling capacity in Europe must be scaling up to satisfy the demands of approaching EU guidelines around raising the amount of recycled plastic in packaging, auto parts and other products. Instead, the industry has seen a wave of recycling plant closures: over 300,000 tons/year of recycling capability closed in 2024, and at least as much again in 2025.
Numerous aspects have merged to form considerable challenges for recyclers. Sustained global overcapacity in ethylene manufacturing has decreased virgin polymer prices, while high energy prices have driven up recycling costs in Europe. Meanwhile, authorities guidelines supposed to offset some of the price premium and inspire producers to integrate more recycled material of their packaging have not kept pace with the price differentials, making it cost-effective to simply use virgin polymer and pay the penalties. There are also guidelines from within the industry that some virgin polymer imports are being fraudulently came about as recycled material, in addition undercutting domestic recyclers.
The story is similar in the US, wherein latest boosts in recycling capacity, assisted by state policies and their clients’ commitments to the usage of recycled material in packaging, have foundered after brands walked lower back on the ones commitments as recyclers struggled to compete with low virgin polymer prices. World leaders’ lack of ability to agree a plastics treaty – and to commit to capping virgin polymer manufacture in main– in addition prolongs pressure on recyclers.
Low demand for most recycled material means firms can’t justify investing in new facilities – and in a few cases even continuing to operate their existing ones. But there are also problems with deliver of plastic waste for recycling. In the UK, corporations have numerous alternatives for managing their plastic packaging waste, along with incineration for energy generation, or exporting it for recycling elsewhere. The UK exports half of its plastic waste, increasingly to non-OECD nations together with Indonesia. Because of concerns across the fate of exported waste, the EU has now banned exports to non-OECD nations.
Decreasing exports ought to offer more steady feedstock supplies for domestic recyclers – despite the fact that at the same time there may be a need to reduce the contamination in waste supply streams. Food residues, inks, labels and improperly sorted materials all make the recycling process more challenging (and consequently costly) as well as making it tougher to produce higher grades of plastic which are most in demand, such as for food packaging.
In the United Kingdom and Europe, there are policy measures under discussion that may go some way to addressing some of these aspects, but whether they can be implemented soon to stimulate a reversal in recyclers’ fortunes is unclear.
