Recycling industry will struggle to survive without urgent action

The plastics recycling market continues to be rooted in a deep decline and prices remain low. Furthermore, the re-election of Donald Trump as US President could apply yet more pressure to the market. Meanwhile, the EU Packaging and Packaging Waste Regulation comes into effect on February 11.

The plastics recycling industry in Europe is still struggling. The market shows no signs of recovery and an increasing number of companies are facing financial difficulties. If this trend continues, a significant proportion of the plastics recycling sector could be wiped out. Nothing short of urgent action is required to save the industry.

The poor economic situation in Europe is largely to blame. Sales of recycled materials remain at a very low level and profit margins have virtually disappeared. Payment terms can no longer be maintained, creating a vicious cycle whereby companies are unable to pay each other, leading to more bankruptcies. This remains a worrying situation for the plastics recycling industry, with more and more capacity disappearing and sustainability goals coming under even greater pressure.

Owing to low demand, prices for recycled HDPE and LDPE remain consistently low, and the same is true for PP, HIPS and ABS. A quick recovery does not appear likely despite attempts by virgin plastic producers to increase their prices. As long as demand remains weak, such an increase is likely to prove unrealistic.

US President Donald Trump’s return to the White House could put further strain on our industry. His administration appears to be placing a lower priority on international climate agreements and stricter environmental regulations. As a result, the gap between environmental policies in the USA and Europe could widen. While Europe focuses on sustainability and a circular economy, a more lenient environmental policy in the USA could enable American producers of prime and recycled plastics to operate at lower costs. This would make it even harder for European recyclers to compete. In summary, the situation for our industry remains very concerning.

The Packaging and Packaging Waste Regulation (PPWR) was published in the Official Journal of the European Union on January 22 and comes into effect on February 11. It introduces binding requirements for packaging design, promotes reusable packaging and establishes rules for waste management. In the long term, the PPWR presents significant opportunities for the plastics recycling industry as it will increase demand for recycled plastics and create better waste streams. In the short term, however, the sector may face challenges, particularly owing to competition with reusable packaging and the high investments required to meet the new regulations.