Recycling capacity continues to expand worldwide, despite structural challenges in the European market, writes Chloe Kinner
The European virgin PET (vPET) and rPET value chain is facing deep structural challenges, delegates at the Petcore annual conference in Rome heard on 5-6 February. The European commission recognises European plastics producers and recyclers face ongoing pressures from high energy costs and insufficient checks on imported products claiming compliance. But European recyclers are concerned that protective measures will come too late.
In vPET, European producers and recyclers are affected by a global overcapacity crisis, driven by Asian overcapacity, and this is resulting in heightened trade defence activity and tightening European regulation.
Trade was high on the agenda at the conference. Delegates discussed the limited impact anti-dumping investigations are having on safeguarding the market and noted that the EU-India free trade agreement may encourage more competition. Protective action is historically high, with chemicals representing a quarter of all active measures, EU trade defence officials said.
Despite the challenges the European recycling market are facing, recycling capacity continues to expand worldwide, with around 1,600 mechanical recycling plants in operation. Government incentives, pressure from non-governmental organisations and strong investment flows, particularly in Asia, are propelling this growth. But from a European perspective, growth in global recycling capacity is causing aggressive price competition and rising outputs for recycled material from southeast Asia, Turkey and north Africa in particular, putting addition pressure on European rPET prices. Weak demand and well-stocked inventories are also putting downward pressure on European rPET prices, recyclers said.
The industry is waiting on a forthcoming dedicated customs code for rPET, expecting that more accurate reporting of trade volumes will bring clarity to market dynamics and support future protective measures for the European recycling industry. There is also hope that separate HS codes for rPET could help to prevent unregulated material from entering the European market. The European Commission acknowledged that Europe lacks sufficient laboratory capacity for advanced chemical analysis on recycled material at scale. But highlighted that a simple but robust protocol to distinguish rPET from vPET is in development.
Regulatory pressure and advancements were also in focus at the event. The industry will have to navigate a large quantity of EU legislation expected to arrive in 2026–30. Circular economies and competitiveness go hand in hand and maintaining a functioning single market is critical as national initiatives expand, the commission said. Petcore members were urged to strengthen cross-value chain dialogue to support consistent implementation of the Single Use Plastics Directive (SUPD), the Packaging and Packaging Waste Regulation (PPWR) and emerging traceability rules, but participants are concerned that a patchwork of differing legislation will develop in the coming years, making the market more complex and ultimately less competitive on a global level.
The EU drafted the PPWR "in a rush", leaving many operational details unclear, conference participants said. The PPWR targets may be unachievable at scale with current technologies, particularly for plastics and products that currently have low collection and recycling rates, a few speakers said. Trays are especially difficult to make circular because of sorting and recycling costs. Many delegates feel that extended producer responsibility fees and eco-modulation are essential tools for keeping recycling economically viable, particularly for these emerging areas.
An update to the SUPD implementing decision was voted on and passed during the conference. The decision clarifies mass balance rules and the inclusion of chemical recycling, and establishes rules for fuel-exempt mass balance. Recycled PET produced outside the EU market cannot count towards the 25pc recycled content for PET beverage bottles until after 21 November 2027, when imports from OECD countries will be allowed. Imports from non-OECD countries will be allowed to count if an agreement is reached with the EU and the country can prove environmentally sound management of plastic waste. The exclusion of imports towards recycled content targets may give European recyclers some "breathing space", at least in the short term.
