The US recycled polymers market enters 2026 under pressure from weak demand, low costs for virgin resin and fragmented policy signals. With no federal recycled-content mandate on the horizon, state programs remain the leading driver of compliance, while a pending Oregon legal challenge adds fresh uncertainty.
The US recycling market lacks unified recycled content requirements, and most of the country is still operating in the absence of less-stringent measures such as extended producer responsibility (EPR) and deposit return schemes (DRS) for plastic packaging. In addition, momentum for a national sustainability initiative has stalled during the administration of President Donald Trump, which has repeatedly shown little interest in — and has even actively eschewed — climate initiatives across the board. With recycling legislation deprioritized, expectations are growing that state-level rules will shape demand in 2026.
Oregon's Plastic Pollution and Recycling Modernization Act, which introduced EPR requirements in 2021, will face a pivotal legal test in early 2026. The National Association of Wholesaler-Distributors (NAW) has requested a preliminary injunction, with a hearing scheduled for 14 January before the US District Court. NAW argues that the law forces producers and distributors to contract with a single entity, violating constitutional limits on interstate business.
The ruling could reshape the national EPR landscape. If NAW prevails, enforcement in Oregon may be delayed, or the program may be redesigned, which would weaken investments in state-led recycling mandates. An unfavorable ruling for Oregon could also encourage opposition to similar programs, jeopardizing Washington's newly adopted ERP law and stalling EPR legislation in New Jersey. But if Oregon's law withstands the challenge, it could secure funding for recycling infrastructure and strengthen momentum for EPR programs nationwide.
Legal uncertainty adds to the structural challenges already weighing on recycled plastics. Many US recyclers have shut down facilities as low-cost imports and oversupplied virgin material weaken margins. Major plants such as rPlanet Earth and Evergreen in California, and the PET recycling affiliate of Alpek in North Carolina, all shuttered in 2025, and WM's Natura location idled its Texas film recycling plant. Market sources say recyclers lack incentives to invest amid weak demand signals.
In addition to a lack of urgency in policy, the recycling industry has seen a rollback in voluntary initiatives from end-users, with several brand owners retreating on their sustainability goals. This year, PepsiCo reduced its previous target of 50pc of recycled content in its plastics by 2030 to 40pc by 2035. PepsiCo's reduced target follows Coca- Cola's shift in 2024 from 50pc recycled content by 2030 to 35-40pc by 2035. The brands will point out — in many cases justifiably — that they are unable to obtain sufficient recycled material to hit their targets, particularly in the case of non-PET food contact packaging where the choice of materials is severely restricted by local safety laws. The additional cost of packaging-quality recyclates, compared with virgin material, is also very likely to be another factor in the current business environment in which many brands are discussing cost-saving initiatives. From the recycling industry's perspective, this illustrates that voluntary commitments alone are not enough to drive investment in the industry. Unless federal action is implemented, state-level uncertainty and voluntary corporate initiatives will leave recycled plastics demand vulnerable through 2026.
The legal outcome in Oregon will set the tone for EPR mandates nationwide. The US recycled plastics market enters 2026 at a crossroads, awaiting legislative clarity that could determine whether sustainability goals will gain the necessary momentum or risk further deterioration.
By Dona Davis
