Report for Asia and Eastern Europe

As of January 1 2025, the EU has mandated the incorporation of a minimum 25% recycled polyethylene terephthalate (rPET) in plastic beverage bottles, in line with the Single-Use Plastics Directive. This regulatory requirement has significantly increased demand for rPET within the EU, decoupling its market dynamics from those of virgin PET. 

But lacking similar legal mandates, other recycled polymers are experiencing substantial pressure from their virgin counterparts. End-users often expect recycled materials to be priced lower than virgin plastics, compelling many recyclers to sell at a loss to maintain operations. This unsustainable pricing model led to multiple bankruptcies among European recyclers in 2024, underscoring the critical need for minimum recycled content mandates accompanied by clear and strict penalties for non-compliance. 

In South East Asia, availability of post-consumer PET bales remains constrained, exacerbated by adverse weather conditions and insufficient collection infrastructure. This situation contrasts with Europe where increased collection during the summer season has led to a higher supply of feedstock. However, the heightened European demand for rPET, driven by new regulatory obligations, could intensify competition for feedstock and potentially impact supplies from Asia.

Maritime freight costs between Asia and Europe have shown signs of stabilisation following a period of volatility. Nevertheless, rates remain elevated compared to historical levels and are continuing to affect the competitiveness of Asian exporters in the European market. Benefitting from lower production and freight costs, Indian producers are maintaining a competitive edge, strengthening their position in both the European and North American markets.

Enforcement of the minimum 25% rPET incorporation requirement in plastic bottles has led to increased demand within the EU. However, divergences remain regarding the actual impact of this measure, with some stakeholders reporting a rise in buyer interest while others are expressing concerns about the availability of high-quality rPET to meet the heightened demand. Ongoing discussions about penalties for non-compliance add a layer of uncertainty for producers and importers.