The European plastics recycling sector is sliding into one of its deepest crises to date. By the end of 2025, Europe will have lost nearly one million tonnes of recycling capacity since 2023. Alarming figures show that in the first 7 months of 2025 alone, almost as much capacity disappeared as during the whole of 2024 – and by year’s end, closures will have tripled compared to 2023.
With forecasts pointing to zero net growth in 2025, Europe’s recycling capacity is at a standstill after years of steady expansion. At current pace, Europe risks falling irreversibly behind on its environmental ambitions, as the plastic recycling capacity would need to double by 2030 if the recycled content targets are to be achieved.
The decrease in Europe’s industrial facilities translates into reduced strategic and resources independence, as well as accumulating difficulty in competing at the global level. Yet the current crisis, alarming as it already is, is the exposed face of a much larger iceberg.
Beneath the surface lie far-reaching issues that have been eroding the industry for the last years – an increase in unverified and low-priced imports of recycled plastics, a decrease in the demand for European recyclates, mounting economic pressures, lack of enforcement of existing regulation and excessive red tape.
The plastics recycling sector has sounded the alarm time and again, but action has fallen short. Although important pieces of legislation aim at advancing plastics circularity – such as the PPWR, the SUP Directive or the ongoing revision of the ELV Directive – they have failed to address the competitiveness crisis hitting the plastics recycling industry. Even legislation designed to safeguard citizens, such as food contact applications of recycled plastics, is left unenforced.
Uncovering the iceberg: the issues fueling Europe’s competitiveness & plastic recycling crisis
One of the most pressing challenges currently facing the European plastics recycling value chain is the increase in unverified imports of plastics. Paired with the lack of enforcement mechanisms, these imports do not undergo verification to determine whether the material is recycled, and if it is, whether it meets the same regulatory requirements as materials produced in Europe. The additional advantage of cheaper production costs in these countries makes it virtually impossible to remain competitive for European plastics recyclers, while the non-compliant imported plastics gain a free pass into the Single Market, posing a risk to the environment and consumers.
The recent announcement of US tariffs to be imposed on PET imports could lead to an added influx of materials to European markets, coming from South and South-East Asian countries – further exacerbating existing market distortions.
Mounting economic pressures – including some of the highest energy prices worldwide – accrue to the burden for European recyclers. This consequently leaves them at great disadvantage in a global market which is increasingly competitive and fierce. These factors are resulting in market distortions, which are driving down demand for plastic recyclates produced in Europe. The global overcapacity for polymer production will further aggravate the situation, driving production away from Europe.
With oil prices softening, virgin plastics have become cheaper, luring converters away from recyclates. Buyers are once again turning to fossil-based feedstock, leaving recyclers with unsold volumes.
Besides the external factors, European plastics recyclers face mountains of paperwork and lengthy waits to obtain and renew recycling permits. Together with regulatory inconsistencies and lack of proper enforcement of existing legislation, these have created a hostile environment for investments. This not only puts at serious risk the millions of euros that have been dedicated to advancing circularity and improving recycling practices in the last decades but also obstructs future developments and innovations in the sector, undermining progress towards a circular economy in Europe.
Immediate action needed to reach safe waters
Europe’s recyclers are not failing from lack of ambition or technology. They are being outcompeted, undercut, and overregulated in their home market. To steer clear of the collapse of the European plastics recycling sector, action must be swift and coordinated. Reviving demand for recyclates produced in Europe, preventing further closures, and ensuring continued innovation require a comprehensive response. Trade defence tools are essential to shield the sector from non-compliant imports that do not meet the EU’s standards. These must include robust mirror clauses, stronger third-party verification, tariff adjustment mechanisms for recycled plastics and products with recycled content, and reinforced customs controls backed by harmonised penalties and certification rules.
At the same time, European plastics recyclers need urgent access to affordable, clean energy and targeted fiscal relief through subsidies and incentives. Harmonised Extended Producer Responsibility (EPR) schemes across Member States would contribute to strengthening local sourcing of recyclates and providing stability to the plastics recycling value chain. Tackling raw material price volatility, accelerating and simplifying permitting processes, and streamlining reporting obligations would encourage the much-needed investments in the sector.
Enhanced consistency in the implementation and enforcement of existing EU legislation is also vital. Recycled content targets contained in key pieces of legislation – such as the PPWR or the SUPD – must be upheld through third-party certification, legal clarity, and uniform implementation. Only a transparent, predictable, and fair regulatory environment can de-risk investments, restore competitiveness, and allow the European plastics recycling value chain to continue innovating.
Plastics recycling is not a niche industry. It is a strategic sector for Europe’s autonomy, and a prerequisite for reaching climate and circular economy goals. Europe’s capacity to respond to the current crisis will determine its ability to remain at the forefront of the global transition to a sustainable future, to regain competitiveness in an increasingly challenging market, and to uphold the values on which its policies are built. With immediate, coordinated, and forward-looking action, Europe can successfully navigate this iceberg and enable its plastics recycling sector to emerge from the crisis stronger and more resilient.
Ton Emans, Plastics Recyclers Europe
