Europe Plastic Recycling Market Outlook, 2030

Europe’s plastics recycling landscape sits at the centre of an intense policy-driven transition from linear production to circular use, shaped by decades of mechanical recycling expertise, rising regulatory pressure, and growing investment in advanced processes. The basic recycling chain follows a straightforward path of collection, sorting at materials recovery facilities, washing and shredding, and finally reprocessing into flakes or pellets or converting via chemical routes.

Packaging is the largest source of plastic waste in the EU and remains the primary feedstock for recyclers, while complex multi-layer flexible films and laminates are widely regarded as the toughest materials to recycle because their mixed polymer layers and adhesives defeat optical sorters and contaminate melt streams. The region produced around 54 million tonnes of plastics in 2023, with PlasticsEurope reporting about 7 million tonnes of post-consumer recycled output, which highlights that while progress has been made, recycled content is still far from closing the loop.

The European Parliament and Council have introduced ambitious rules under the Packaging and Packaging Waste Regulation that mandate higher recycled content, stricter eco-design measures, and separate collection targets, all of which drive demand for high-purity recyclates and bottle-to-bottle solutions. Industrial activity mirrors this policy push, with Veolia launching PlastiLoop to offer ready-to-use recycled resins across PET, PP, HDPE and other polymers, and Loop Industries with SUEZ and SK Geo Centric planning a plant in France to produce virgin-quality PET entirely from recycled inputs.

At the same time, CARBIOS has demonstrated enzymatic depolymerisation of PET to monomers suitable for food-grade packaging. Associations such as PlasticsEurope, EuRIC and the Association of Plastic Recyclers collaborate with regulators to harmonize standards and ensure certification through systems like ISCC Plus for chemical recycling and EN compliance for food-contact safety.

According to the research report, "Europe Plastic Recycling Market Outlook, 2030,", the Europe Plastic Recycling market is anticipated to add to more than USD 7.86 Billion by 2025-30. The European market today reflects a combination of strong regulatory pressure, technological innovation, and industrial consolidation.

On one hand, the Packaging and Packaging Waste Regulation has created a powerful demand signal for recyclates, while recyclers simultaneously face price pressure, rising energy costs, and competition from low-cost virgin imports, which have contributed to plant closures and delays in expansion projects. Despite these hurdles, investment in advanced solutions has accelerated.

Sorting technologies enhanced by artificial intelligence, improved washing lines, and new preparation centres have pushed the quality of recyclates closer to virgin standards. Plastipak has established a facility in Spain producing food-grade rPET pellets, LyondellBasell has expanded closed-loop preparation capacity in Germany to recover high-value feedstocks for automotive and durable goods, and Loop Industries with SUEZ and SK Geo Centric have selected France for a major PET recycling plant that will use 100 percent recycled content. Large corporates and waste operators are heavily involved.

Veolia’s PlastiLoop offers certified recycled resins to global markets, BASF’s ChemCycling produces ISCC certified feedstocks from waste, and retailers along with consumer goods companies such as Nestlé and Coca-Cola are tying their packaging strategies directly to recycled content commitments. Civil society and research institutes are contributing by validating new technologies, while certification systems give end users confidence in safety and quality. Opportunities in the region are visible in expanding bottle-to-bottle and tray-to-tray systems, developing chemical and enzymatic pathways for difficult-to-recycle streams, and building regional hubs to streamline feedstock preparation.

Market Drivers

• Strict EU regulations on recycled content: The European Union has introduced some of the world’s toughest recycling rules, such as the Single-Use Plastics Directive, which requires PET bottles to contain 25% recycled content by 2025 and 30% by 2030. The new Packaging and Packaging Waste Regulation (PPWR) adopted in 2024 will expand these targets across food and non-food packaging. These policies force producers to secure recycled material, ensuring long-term demand and driving investments in advanced collection, sorting, and recycling capacity across Europe.
• Well-developed collection and deposit systems: Europe benefits from strong waste collection and deposit return schemes, particularly in countries like Germany, the Netherlands, and the Nordic states. These systems achieve high recovery rates for PET bottles and other packaging, providing recyclers with relatively clean and consistent feedstock. This infrastructure enables closed-loop recycling, with PET bottles reprocessed into new bottles and trays. The reliability of collection systems makes Europe one of the most advanced regions in terms of recycling efficiency and circularity.

Market Challenges

• Rising imports of low-cost virgin plastics: European recyclers face competition from cheaper virgin plastics imported from regions with lower energy and production costs, such as the US and Asia. With electricity prices high in Europe, recyclers struggle to remain cost-competitive, leading to plant closures in 2023. This imbalance threatens the survival of smaller recyclers and discourages further investments, even as EU regulations increase demand for recycled content.
• Quality limitations of recyclates: Although demand for recycled plastics is growing, many recyclates still do not match virgin material in terms of color, strength, or safety for food contact. Packaging and consumer goods producers often find it difficult to replace virgin resins with recycled ones without compromising product quality. This quality gap creates uncertainty for brand owners, especially in premium packaging, and slows the pace of adoption despite strong regulatory pressure.

Market Trends

• Expansion of chemical recycling capacity: Europe is rapidly developing chemical recycling projects to complement mechanical recycling. Companies like Loop Industries, Indorama Ventures, and LyondellBasell are investing in depolymerization and pyrolysis plants in France, Germany, and the Netherlands. Although current capacity is limited, these facilities are expected to process mixed or contaminated plastics that mechanical systems cannot handle. Chemical recycling is increasingly seen as essential for meeting EU circular economy targets and reducing exports of plastic waste.
• Corporate focus on high-quality rPET: European beverage and consumer goods brands are racing to secure high-quality rPET for bottles and food packaging. Coca-Cola, Danone, and Nestlé already sell bottles made entirely from recycled PET in countries like Spain and the UK. The scarcity of food-grade rPET has created a “green premium,” pushing prices higher but also reinforcing investment in new rPET plants. This trend highlights how PET recycling is central to Europe’s circular packaging strategy.PET is the largest focus of plastic recycling in Europe because of its dominant use in beverage bottles and food packaging and the strong collection systems and regulations supporting bottle-to-bottle recycling.

PET has become the backbone of Europe’s recycling sector because it is the most widely collected plastic through deposit return schemes, curbside systems, and producer-led take-back programs. Beverage bottles made from PET are lightweight, transparent, and widely consumed across the continent, creating a consistent and high-quality waste stream that recyclers can transform into rPET. European Union legislation, such as the Single-Use Plastics Directive, requires PET bottles to contain at least 25% recycled content by 2025 and 30% by 2030, creating powerful demand for rPET.

Countries like Germany, Spain, France, and Italy have developed significant PET recycling infrastructure, with facilities producing food-grade rPET pellets that can be used again in new bottles, trays, and packaging films. Companies such as Indorama Ventures, Plastipak, and Loop Industries have invested in large-scale European operations, with new bottle-to-bottle recycling plants being announced or commissioned in places like France and Spain. Brands including Coca-Cola, Danone, and Nestlé are already marketing bottles made entirely from recycled PET, reinforcing consumer acceptance and industry confidence in closed-loop systems.

PET is also versatile beyond bottles, with recycled PET used extensively in textiles, especially polyester fibers for apparel and home furnishings, which strengthens demand for the material across industries. Unlike other polymers, PET recycling has benefitted from years of investment in decontamination technologies that make it suitable for direct food contact applications, something regulators and brand owners prioritize.

Post-industrial plastic waste is significant in Europe because the region’s mature manufacturing and packaging industries generate large volumes of clean, uniform scrap that recyclers depend on.

Europe’s strong industrial base produces significant amounts of post-industrial plastic waste in the form of off-cuts, rejected parts, trimmings, and unused resin, which are much easier to recycle than contaminated household plastics. This waste arises in sectors like automotive manufacturing in Germany, Italy, and Eastern Europe, packaging production across Spain and France, and electronics manufacturing in Central Europe. Because the material is clean, homogeneous, and often segregated by polymer type, it provides recyclers with a reliable feedstock that requires minimal pre-treatment.

For example, rigid polypropylene and polyethylene scrap generated in packaging production can be directly reprocessed into pellets for use in non-food packaging or industrial products. Automotive plants generate high volumes of polypropylene and polyurethane waste during the production of dashboards, trims, and seats, and these streams are increasingly being captured and returned into recycling processes as carmakers seek to demonstrate circularity in their supply chains. Post-industrial scrap also plays a role in helping companies comply with the European Union’s Packaging and Packaging Waste Regulation, since using recycled content from within manufacturing facilities counts toward corporate recycling targets.

Unlike post-consumer waste, which requires complex sorting and cleaning, post-industrial waste is often directly collected at factories, ensuring higher recovery rates. Many European recycling companies rely on a mix of post-industrial and post-consumer feedstock to balance supply, and industries value the consistent quality of post-industrial material. In addition, the push for carbon footprint reduction and resource efficiency has encouraged manufacturers to close the loop on their own production waste, aligning with corporate sustainability goals and the EU’s Green Deal objectives.

Mechanical recycling is the largest process in Europe because it is mature, widely deployed, and supported by decades of infrastructure investment and regulatory acceptance.

Europe has built its recycling market around mechanical processes because they are well-established, cost-efficient, and capable of handling the largest volumes of plastic waste. For decades, countries like Germany, the Netherlands, and Spain have invested in sorting plants, washing lines, and extrusion systems that can turn post-consumer bottles, films, and rigid packaging into recyclates. Mechanical recycling is widely used for PET bottles, HDPE milk jugs, polypropylene tubs, and polyethylene films, all of which make up a large portion of Europe’s plastic packaging waste stream.

The European Union recognizes mechanical recycling as the primary route for meeting recycled content targets set out in legislation, and certification schemes ensure that mechanically recycled plastics can be safely used in packaging, textiles, and industrial products. Companies such as Veolia, Suez, and Plastipak operate dozens of mechanical recycling facilities across Europe, producing rPET and rHDPE pellets for bottle-to-bottle and container-to-container applications. Mechanical recycling also benefits from technological advances in collection and sorting, with AI-based systems like TOMRA’s equipment now able to achieve purity levels of up to 95% in separating PET, HDPE, and PP.

These improvements have enhanced the quality of mechanically recycled outputs, allowing them to replace virgin polymers in more applications. Mechanical recycling has also been scaled more quickly than chemical alternatives because it requires less capital-intensive infrastructure and is already integrated into municipal collection and producer responsibility schemes. While chemical recycling is growing, mechanical processes continue to dominate because they are proven, accepted by regulators for food-contact uses, and already embedded in supply chains.

Automotive is the fastest-growing application for recycled plastics in Europe because carmakers face strict end-of-life vehicle rules and sustainability targets, pushing them to integrate more recycled content.

The automotive sector in Europe is rapidly increasing its use of recycled plastics because regulations and consumer expectations are forcing manufacturers to cut lifecycle emissions and demonstrate circularity in vehicle design. The EU End-of-Life Vehicles Directive requires that 95% of a vehicle by weight be reused or recovered, which has pushed the industry to recycle plastics from old cars and use them in new components. Carmakers such as BMW, Mercedes-Benz, Renault, and Volkswagen are adopting recycled plastics for dashboards, door panels, seat fabrics, and under-the-hood applications, often using polypropylene, ABS, PET, and polyurethane.

Collaborations between suppliers and recyclers are accelerating this shift: Faurecia and Veolia are working together to develop automotive interior modules with 30% recycled content by 2026, while LyondellBasell introduced a recycled polypropylene grade derived from discarded maritime equipment for car interior parts. In Japan, Toyoda Gosei has developed recycling technologies that Europe is also adopting for horizontal recycling of automotive plastics, meaning materials from old car parts can be reused in new vehicles. The shift to electric mobility has also intensified the demand for lightweight recycled plastics, since reducing vehicle weight extends battery range and improves efficiency.

Beyond regulation, automakers are making recycled plastics part of their brand positioning, marketing vehicles as sustainable and environmentally responsible. The scale of Europe’s automotive production, with Germany, France, and Italy among the largest vehicle producers, ensures a significant impact on recycling markets.Advanced waste management infrastructure and strong regulatory frameworks make Germany the recycling leader in Europe.

Germany is the leading nation in European plastic recycling because it has one of the world’s most comprehensive and well-established waste management systems, backed by strict regulatory enforcement and a culture of environmental responsibility. The introduction of the Green Dot system in the 1990s created producer responsibility schemes that required manufacturers to pay for the collection and recycling of packaging, laying the foundation for today’s circular economy practices. Germany currently maintains the largest installed plastics recycling capacity in Europe, between 2 and 2.5 million tonnes annually, covering streams from PET bottles to PVC and polypropylene.

The country also has the largest infrastructure for rigid plastics, with PET, HDPE, and PP accounting for significant shares of its recycling capacity, alongside dedicated facilities for PVC, PS, and even end-of-life vehicle and WEEE plastics. Germany’s recycling sector benefits from large-scale facilities, with average plant capacities being larger than those in most other EU nations, enabling efficiency and economies of scale. Companies like Veolia, Suez, and local players run advanced material recovery facilities equipped with near-infrared sorting, automated lines, and extrusion systems to produce high-quality recyclates.

Germany’s leadership is also tied to its industrial demand: its automotive, packaging, and chemical industries are strong consumers of recycled plastics, using them in bottles, films, interior automotive parts, and construction materials. With the EU Packaging and Packaging Waste Regulation mandating recycled content, Germany is uniquely placed to meet future targets because of its robust infrastructure and proven track record in enforcing recycling norms. Furthermore, public participation in waste segregation is among the highest in the EU, ensuring cleaner feedstock enters recycling streams.

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