A new study from commodity intelligence firm ICIS and a Chinese industry association explores the impacts of European regulations on global demand for recycled plastics in packaging, automotive and textile applications.
Implementation of the European Union’s (EU) Packaging and Packaging Waste Regulation (PPWR) and upcoming legislation in other sectors will drive a sharp increase in demand for recycled content, particularly for PE, PP and PET, according to the study from London-based ICIS and CPCIF, which represent China’s petroleum and chemical industry.
The study predicted that the effects of PPWR implementation would include:
- Substantial demand growth: By 2030, EU producers will require approximately 5.4 million metric tons/year of recycled PE, PP and PET to meet minimum recycled content mandates. This figure is expected to more than double to 11.5 million metric tons/year by 2040, driven by regulation across packaging, automotive and fiber applications.
- Increasing importance of chemical recycling: Due to limitations in mechanical recycling, especially for food-safety and performance-sensitive applications, chemical recycling will be essential to meet the required volumes of recycled polyolefins for packaging.
- Global spillover: The interconnected nature of trade means EU regulations will influence global supply chains, as exporters placing goods in the EU market will have to comply with recycled content requirements.
In addition, the study’s authors predicted that China would continue to be an important player in the EU plastics supply chain, driving several trends in Asia.
- China is expected to supply over 1 million metric tons/year of recycled plastics by 2040 to meet demand for finished goods headed for the EU. While this volume is small relative to China’s total market size, it will drive investment in research and development, standards alignment and value chain transformation.
- Chinese exporters are investing in certified recycled and bio-based materials in pursuit of competitive advantage, shifting to proactive compliance rather than reactive.
- Although short-term operational costs related to compliance are expected to rise, the study points to emerging market opportunities for high-performance, EU-compliant recycled plastics, especially with standardized packaging to streamline global compliance.
- PPWR also is acting as a catalyst for China’s domestic recycling reforms, potentially boosting internal demand for recycled content and improving consistency in material traceability and quality.
