Europe’s plastics recycling industry is contracting at a pace not previously recorded, and Brussels is preparing to intervene.
According to Plastics Recyclers Europe, more recycling capacity was lost across the EU in 2025 than in any prior year, with closures reported in key markets such as the Netherlands. High energy prices, volatile virgin plastic costs tied to oil markets, and a surge of low-cost imports have eroded margins for domestic recyclers, prompting the European Commission to outline a package of stricter controls on plastic imports aimed at stabilizing the sector.
At the center of the Commission’s concern is the mislabeling of virgin plastic as recycled material. Virgin polymers, derived from fossil fuels, are typically cheaper to produce than recycled plastics, particularly in an environment of weak oil prices. When imported material is incorrectly classified as recycled, European producers operating under higher energy and compliance costs face a structural disadvantage. The Commission has explicitly acknowledged that this practice undermines both fair competition and the credibility of EU recycled-content targets.
To address this, Brussels plans to propose legal changes in the first half of 2026 that would introduce more stringent documentation requirements for imported recycled plastics, according to a policy document cited by Reuters. Separate customs codes for virgin and recycled plastics are also under consideration, a move designed to improve traceability and provide customs authorities with clearer tools to identify misdeclared shipments. Without such differentiation, regulators argue, enforcement remains largely reactive and fragmented.
The proposed measures extend beyond paperwork. The Commission intends to introduce audits of recycling facilities, including those located outside the EU, alongside additional support for laboratories tasked with verifying whether imported plastics labeled as recycled meet EU standards. This reflects a broader shift toward verification-based oversight rather than reliance on supplier declarations, a model that has proven vulnerable to abuse in global waste and materials markets.
Trade defenses are also firmly on the table. An EU import surveillance task force will monitor plastic imports throughout 2026, assessing whether further measures are required. This follows recent precedent: the EU has already imposed anti-dumping duties on Chinese PET plastic after concluding that imports were being sold at prices that forced European producers to operate at a loss. Pressure is mounting from within the bloc as well. France, Spain, the Netherlands, and three other member states recently called for stronger action against imports of low-quality recycled plastics sold at steep discounts.
At the same time, Brussels is attempting to clarify internal regulatory ambiguities. The Commission has proposed rules defining how chemically recycled materials can count toward EU recycled-content mandates, an issue that has divided industry stakeholders. Without clear guidance, investment decisions in advanced recycling technologies remain exposed to regulatory risk, further complicating efforts to scale domestic capacity.
