Argus spoke to Petcore Europe president Antonello Ciotti this week to discuss the outlook for 2026 and his views on the EU's response to challenges facing the recycling industry ahead of the Petcore Europe conference in Rome on 5-6 February.
After a challenging year in 2025, what progress has been made since the last Petcore conference in terms of the market outlook?
I must feel positive about 2026. We see the first steps for the institutions to be going in the right direction. For me, the worst part should be behind us. There has been recognition of the status of crisis for the industry. The EU institutions are more willing to support the markets and the direction taken so far with the latest Single-Use Plastics Directive (SUPD) draft and Winter Package are introducing corrections in the right direction. So at least a line has been drawn and we move towards more clarity.
At an institutional level, there has been a shift in the understanding of the crisis that the European markets are in. Higher energy costs still remain obstacles to growth in the virgin (vPET) and rPET markets. Higher energy costs and higher collection costs and disparity with regions outside Europe represent a competitive gap that is difficult to be managed by the EU industry. Legislators thought that European industry could survive by compensating lower raw material costs of the importers through more efficient technology. Today, the global technology has now caught up and balanced it out.
For recyclers, the disparity is twofold because they have higher energy costs but also higher collection costs. The cost of collection in Europe can be €450/t plus. When you compare this with the cost of collection in Egypt, India or even China, there is absolutely no parity, and legislators are realising this.
You mentioned an updated implementing decision for the SUPD is currently in discussion with member states, under which recyclates produced in OECD countries would automatically become eligible to count towards recycled content targets from November 2027. Do you think that opening the door to imports is a correct or necessary step?
The SUPD so far has ended up supporting the growth of collection and recycling outside Europe. By 2026, it is important that European capacity of rPET and vPET is not reduced further. The SUPD latest draft clarifies more detail and restricts imports from counting towards recycled content targets until 2027. So we expect that demand will improve for the EU recyclers.
Also, the European Commission is working on new HS trading codes for PET flake and rPET pellets, separate to the one of vPET, and we hope to see this implemented by the end of the first quarter. This will make it much clearer to monitor imports and to check that material complies with the EU standards defined for food grade. These changes are going in the right direction for the industry.
Is this change meaningful, given that imports still need to meet the other requirements for EU food contact applications such as 1616?
It is almost impossible to confirm that the imported PET flakes comply with the strict legislation that European recyclers must comply with — separate collection of the bottles collected and 95pc of the collected containers coming from food application. Reliable certification is key for this, and certification is something Petcore is considering entering the field of.
More and more certifications will be required to protect European consumers as the regulation comes in.
How much does Europe need imports to meet its recycled content goals?
According to our data, there is no need for imported volumes to meet the recycled content levels. There is enough overall European capacity to meet the 2030 requirements. There have been some recyclers forced to shut down, but this capacity is idle and the lines are quite new — 10-15 years old maximum. So this capacity could be easily restored.
Then it depends on how brands move with exceeding these recycled content targets. But we need to remember that back in 2018, the big brands pushed for higher and higher recycled content, well above the EU target, so recyclers invested heavily to match this increasing demand. The price of recycled material jumped a lot. Then, with the fall of vPET prices due to heavy competition, among other things, the brands realised that that amount of recycled content (up to 100pc) did not make economic sense as the end-users were not paying the cost of this higher rPET content in the bottles.
Due to the recent closures and the passage of time, the situation can now equilibrise a bit. If more investment is required, European recyclers are willing and will be able to add new capacity. To start a new recycling plant requires 6-12 months at the most.
Italian recyclers took the step to halt collections from sorting centres in late 2025, to compel their government to provide more regulatory support. Do you see the potential for similar action in other countries, or even across the EU as a whole, if the EU's Winter Package of support measures is not seen to be sufficient?
The commission and the authorities in various EU member states have understood the crisis in the recycling industry, and are taking action. The situation in Italy at the end of last year was a cry for support, and it was well understood by the authorities, because if recyclers stop, it basically stops the whole value chain circularity. It is important that the authorities realise the importance of a strong local industry to reach circularity.
What specific measures are expected to be included in the Circular Economy Act that the EU says it will release in 2026, and what non-negotiables do you want to see?
The fact that Europe needs a strong manufacturing industry, both for vPET and rPET, is non-negotiable.
I wanted to highlight the Critical Chemicals Alliance. I attended the opening session on 13 January in Brussels, where they realised that in Europe in the past couple of years, more than 7mn t of manufacturing capacity has somehow disappeared. This alliance is raising a cry for help to all of the value chain for support for European production. The Covid-19 pandemic proved how important European supply is — otherwise you fall into the hands of importers with prices on a roller coaster and no reliability of supply.
There are four sub-groups to this alliance — one to identity critical molecules and sites, one focusing on trade, one on lead and one on modernisation and investment. Petcore Europe is going to advocate for support across the entire European PET value chain.
