Europe’s plastics recycling industry is warning of an accelerating crisis as plant closures and investment shortfalls erode its ability to support the EU’s circular economy targets.
In a letter to European Commission president Ursula von der Leyen, major trade bodies including EuRIC and Plastics Recyclers Europe cautioned that soaring energy costs, regulatory fragmentation, and intensifying global competition are pushing the sector into recession.
The warnings come against stark production data. EU plastics output contracted by 13.3% between 2018 and 2022 and fell another 8.3% in 2023, leaving annual production at 54 million tonnes. At the current trajectory, volumes could soon return to levels last seen at the turn of the millennium, despite continued growth in polymer demand.
The collapse is not limited to production figures. Recycling businesses are exiting the market at an accelerating pace, with capacity lost in the first seven months of 2025 almost matching the total capacity lost in the entirety of 2024. The contraction threatens Europe’s ability to meet recycled content targets under the Packaging and Packaging Waste Regulation (PPWR) and undermines progress on broader decarbonization goals.
Industry representatives argue that a combination of structural and policy failures is undermining competitiveness. Energy-intensive recyclers face higher electricity costs than global rivals, with limited relief from EU mechanisms. Imports of virgin and recycled plastics from outside the bloc, often produced under less stringent environmental standards, add further pressure to domestic operators.
The joint letter sets out six priority areas for intervention. First, the industry calls for “mirror measures” on imports to level the playing field for domestic producers. Second, it seeks greater access to affordable energy schemes, tax relief, and the redirection of EU Emissions Trading System (ETS) revenues toward plastics circularity projects. Enforcement is another concern: industry groups want stronger customs checks and harmonized verification systems to address inconsistent recycled content claims.
Regulatory inconsistency across member states is flagged as a critical bottleneck. Differing approaches to recycled content targets, permitting processes, and End-of-Waste criteria have created what industry groups describe as a patchwork of rules that discourages investment. They urge the Commission to enforce consistent EU-wide implementation.
On the technical side, improving collection systems and scaling advanced sorting and separation technologies are seen as essential to closing the supply gap. Industry leaders caution that without prioritization of the most sustainable recycling pathways, investment could drift toward less efficient or transitional solutions.
Finally, the letter calls for reform of Extended Producer Responsibility (EPR) schemes. Current variations across member states result in unequal costs and obligations, undermining the single market. Harmonized, transparent rules are seen as critical to stabilizing recycling revenues and enabling long-term investment.
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