October 23, 2025 16:29

How will environmental regulations like the EU’s Packaging and Packaging Waste Regulation (PPWR) and the Single-Use Plastics (SUP) Directive affect global demand for recycled plastics?

A recent study by market intelligence firm ICIS and the China Petroleum and Chemical Industry Federation (CPCIF), titled Impact of EU recycling regulations on China’s key packaging-intensive export sectors, seeks to answer this question with a focus on the strategic role of China.

European interest in recycled plastic imports from Asia is already substantial and likely to increase, given structural limitations within the EU's own recycling sector. It is therefore no surprise that China is paying close attention to Brussels’ evolving legislation.

The study confirms predictable trends: The PPWR will significantly boost demand for recycled content, particularly in the form of recycled polyethylene (rPE), polypropylene (rPP), and polyethylene terephthalate (rPET).

By 2030, an estimated 5.4 million tonnes per year of these recycled polymers will be required to meet minimum content targets across sectors such as packaging, automotive and textiles. This figure is set to rise to 11.5 million tonnes annually by 2040.
In contrast, current European output of recycled polymers stands at just 3.6 million tonnes per year—highlighting a substantial supply gap.

Due to the technical limitations of mechanical recycling—especially for food-grade and high-performance applications—the report forecasts a growing role for chemical recycling in meeting EU demand for recycled polyolefins. While still in its infancy, chemical recycling is seen as essential to unlock rPE and rPP applications in food packaging and for processing complex waste streams such as multilayer films.
A major unknown remains whether EU policymakers will formally recognize chemical recycling as equivalent to mechanical processes.

The study emphasizes the global reach of EU legislation. Companies wishing to sell packaging in the EU will have to comply with strict recycled content requirements, prompting shifts in procurement strategies and increasing demand for internationally certified recycled materials.

China is expected to retain a key position in this ecosystem. By 2040, Chinese suppliers could deliver more than 1 million tonnes of recycled plastic annually to meet EU-bound demand. The report notes a strategic shift in China’s plastics industry—from reactive compliance to proactive adaptation. Companies are investing in certified recycled and bio-based feedstocks, aiming to turn EU regulations into a competitive edge rather than a barrier to market access.

Although this transformation involves higher short-term operating costs—due to product redesigns, certifications and changes in supply chains—it also opens medium- and long-term opportunities. High-performance, EU-compliant recycled plastics are becoming a valuable market segment, especially for companies adopting standardized packaging formats across multiple markets.

The EU’s regulation is also acting as a catalyst for reform within China, encouraging better traceability and quality control in recycled materials and potentially stimulating domestic demand for recycled content.

“EU circularity regulation is no longer just a regional policy,” said Helen McGeough, global analyst team lead for plastics recycling at ICIS. “It’s becoming a global market force, shaping industrial strategies and supply chains worldwide. China’s proactive response may prove pivotal in narrowing the gap between domestic and international standards and accelerating the global transition to a circular economy.”

For more information: Impact of EU recycling regulations on China’s key packaging-intensive export sectors (PDF)

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