Plastic Recycling : Industry coalition forms as recycling infrastructure faces critical crossroads

As nearly one million tonnes of European recycling capacity has shuttered since 2023 and U.S. facilities face similar pressures, a broad coalition of industry leaders has launched the Recycling Leadership Council to push for urgent policy reforms. The initiative comes at a moment when the gap between recycling ambitions and economic realities has never been wider, threatening the viability of secondary raw materials markets on both sides of the Atlantic.

The plastic recycling industry is experiencing what trade associations are calling an existential crisis. In Europe, facility closures accelerated dramatically through 2024 and 2025, with between January and July 2025 alone eliminating nearly the same recycling capacity as the entire previous year. The Netherlands lost seven plastic recyclers in 2024, while major operations in Germany and the United Kingdom, including Veolia facilities and Viridor's £317 million Avonmouth plant, ceased operations after just two years.

The situation in North America mirrors these challenges. California's Evergreen Recycling shuttered a processing line, rPlanet Earth closed operations, representing approximately four per cent of U.S. PET recycling capacity, and in November 2024, WM closed its Texas film-recycling operations. According to environmental advocates, more plastic recyclers have closed than opened in the United States between 2018 and 2025.

Plastics Recyclers Europe forecasts zero net growth in recycling capacity for 2025, marking a dramatic reversal from the seventeen per cent average annual growth rate the sector enjoyed between 2018 and 2022. This contraction threatens Europe's ability to meet the Packaging and Packaging Waste Regulation targets, which mandate minimum recycled content percentages in plastic packaging by 2030.

Industry experts point to a convergence of factors that have rendered recycled plastic economically unviable for many processors. Rising operational costs, particularly energy expenses that now represent up to seventy per cent of operating costs in some facilities, have collided with a global oversupply of cheap virgin plastic from expanded petrochemical production in Asia.

The price differential between recycled and virgin materials has become untenable. As of February 2025, recycled polyethylene terephthalate costs between $750 and $800 more per tonne than virgin PET. This gap reflects massive capacity expansion in China's state-supported petrochemical sector, which has flooded global markets with inexpensive virgin polymers.

Simultaneously, imports of low-cost recycled materials, often lacking transparency in origin and potentially fraudulent in their sustainability claims, have undercut domestic recyclers. These imports now account for over twenty per cent of EU polymer consumption, while domestic recycling production has declined by five per cent for most polymers.

"These issues are feeding the existing recession on the market - driving many recycling companies out of business in 2023, with further closures happening or planned in the course of 2024," said Mathilde Taveau, Regulatory Affairs Manager at Plastics Recyclers Europe.

Paradoxically, as European recycling capacity contracts, plastic waste exports from the EU to non-OECD countries surged by thirty-six per cent between 2022 and 2024, highlighting a fundamental shift away from domestic circular economy principles.

>>> Europe’s plastic recycling paradox: High performance, low demand

The demand side of the equation has proven equally problematic. Major consumer brands that announced ambitious recycled content targets in the late 2010s have struggled to meet their commitments or quietly scaled back goals as market conditions deteriorated.

Colgate-Palmolive set a 2025 deadline to reduce virgin resin use by thirty-three per cent and incorporate at least twenty-five per cent recycled content. By 2024, the company had achieved twenty-five per cent virgin resin reduction and twenty-one per cent recycled content, but expressed doubts about reaching final targets due to "challenges including the availability, quality and feasibility of recycled content."

Steve Alexander, CEO of the Association of Plastic Recyclers, argues that demand uncertainty lies at the heart of the crisis. "Unless there's a strong demand component by consumer brands using the domestically produced material, there's not going to be a market for all this material that EPR is supposed to generate," he said.

The implementation of Extended Producer Responsibility programs across different U.S. states with varying scopes and timelines has created additional uncertainty. Brands have pulled back from voluntary commitments while waiting to understand mandatory requirements, further destabilising demand for secondary raw materials.

>>> Plastic recyclers see a 'glimmer of hope' despite a tough market

Against this backdrop, the Recycling Leadership Council launched in January 2026, bringing together organisations from the recycling, manufacturing, packaging, and consumer products sectors. Led by the Consumer Brands Association, the coalition includes the American Chemistry Council, Alliance for Automotive Innovation, Closed Loop Partners, and numerous industry groups representing sectors from toys to lubricants.

"To reduce plastic waste, we must modernise our recycling system. The formation of the Recycling Leadership Council is a pivotal step toward transforming how America manages plastic waste," said John Hewitt, Senior Vice President at the Consumer Brands Association. "Leaders across technology, automotive, consumer goods, toys, and other industries are working together to meaningfully address policies and practices that prohibit plastic recycling at scale."

The coalition's formation acknowledges that current regulatory frameworks fail to recognise emerging recycling technologies and inadequately support the investment needed to modernise ageing infrastructure. The RLC aims to work with Congress to spur recycling innovation and American manufacturing through policy reforms.

"The RLC is united in support of policy frameworks that will unlock the investment and manufacturing innovation needed to modernise America's ageing recycling infrastructure to adequately handle the amount and types of plastic materials discarded today," Hewitt stated.

European and North American recycling associations have outlined specific measures they argue are essential to stabilise the sector and preserve secondary raw materials markets.

Plastics Recyclers Europe calls for mandatory third-party certification for all polymers claiming recycled content, harmonised Extended Producer Responsibility rules across EU member states, and stricter customs controls to prevent non-compliant materials from entering European markets. The organisation also advocates for streamlined permitting processes and faster approval times for intra-EU waste shipments, which currently can take six to twelve months.

Ton Emans, President of Plastics Recyclers Europe, emphasised the urgency: "Now more than ever, decisive action is essential. We urge EU policymakers to take a fast and strong political stance, introducing effective import controls and enforcing existing legislation, including the restriction of importing materials which do not meet equivalent EU sustainability and safety standards. These measures are crucial for the plastic recycling industry's survival, which has already invested €5 billion between 2020 and 2023 just to meet mandatory targets."

In North America, the Association of Plastic Recyclers advocates for incentives that support both recyclers and brands incorporating post-consumer recycled content. The organization emphasizes that penalties alone are insufficient without corresponding support mechanisms to make recycled materials economically competitive.

A March 2025 study revealed that mechanical recyclers in the U.S. and Canada have significant unused processing capacity, capable of processing nearly two billion additional pounds of plastic annually if more material were collected and matched with consistent manufacturing demand. This finding underscores that infrastructure exists but requires stable markets to remain viable.

The consequences of continued recycling sector contraction extend beyond individual companies. Europe's legally binding environmental targets, including the Packaging and Packaging Waste Regulation's recycled content mandates, become increasingly unachievable as capacity disappears. Europe's current installed recycling capacity of 13.2 million tonnes falls well short of PRE's estimated requirement of sixteen million tonnes by 2025.

The erosion of domestic recycling capacity threatens strategic objectives around resource independence, green jobs, and circular economy commitments. If the trend continues, regions may become dependent on imported recycled materials of questionable provenance, while simultaneously exporting their plastic waste to countries with less stringent environmental standards.

Industry stakeholders warn that without recognising plastic recycling as a strategic sector worthy of trade defence mechanisms, the infrastructure built over the past decade could collapse irreversibly. The formation of the Recycling Leadership Council represents an attempt by diverse industry players to present a unified front for policy reforms before that point of no return.

As policymakers on both continents grapple with these challenges, the fundamental question remains: Can regulatory frameworks be modernised quickly enough to preserve the secondary raw materials infrastructure necessary for a circular economy, or will the gap between sustainability ambitions and economic realities continue to widen?

The answer will likely determine whether the investments of the past decade in recycling capacity represent a foundation for future growth or a cautionary tale of well-intentioned policies undermined by market realities.