New Study Highlights Global Impact of EU Circularity Regulation on Recycled Plastics Demand
New Study Highlights Global Impact of EU Circularity Regulation on Recycled Plastics Demand
On October 22, 2025, ICIS, a prominent provider of commodity intelligence, alongside the China Petroleum and Chemical Industry Federation (CPCIF), unveiled findings from an extensive study on the European Union's (EU) circularity regulation. This report outlines the profound impact these regulations are expected to have on the global demand for recycled plastics, particularly focusing on the shifts within China's petrochemical sector.
Overview of Key Findings
The study reveals a robust forecast for recycled plastic demand stemming from the implementation of the EU Packaging and Packaging Waste Regulation (PPWR) and forthcoming legislation across various sectors. It particularly emphasizes a notable spike in the necessity for recycled polyethylene (rPE), polypropylene (rPP), and polyethylene terephthalate (rPET), which will become critical for manufacturers in the EU by specific targets set for 2030 and subsequently for 2040.
Demand Projections
By 2030, manufacturers within the EU will require an estimated 5.4 million tonnes of rPE, rPP, and rPET to adhere to defined minimum recycled content obligations. This number is projected to exceed 11.5 million tonnes per year by 2040, largely propelled by regulations covering key sectors like packaging, automotive, and textiles.
Importance of Chemical Recycling
As mechanical recycling faces challenges, particularly for applications that emphasize food safety or performance, chemical recycling emerges as a crucial method in fulfilling the demand for recycled plastics. This approach is set to become essential to meet the required volumes, especially for polyolefins utilized in packaging.
Ripple Effects on Global Supply Chains
The EU's regulatory measures possess a cascading effect on international trade dynamics. As exporters target the EU market, they are compelled to meet recycled content requirements, thereby influencing sourcing strategies and amplifying the necessity for certified recycled materials on a worldwide scale.
China's Strategic Position
In the context of this global shift, China’s role within the EU supply chain is highlighted. By 2040, China is projected to export over 1 million tonnes of recycled plastics per year to fulfill requirements for export-bound finished products. While this export volume represents a fraction of China's vast market, its significance is pronounced as it drives investments in research and development, encourages alignment of standards, and prompts transformations in value chains.
Compliance as a Competitive Edge
The study draws attention to a strategic pivot among Chinese exporters moving from merely aiming for compliance to seeking a competitive advantage. Investments in certified recycled and bio-based materials are becoming vital as firms aim to utilize regulatory mandates to distinguish themselves in the market.
Emerging Market Opportunities
Despite anticipated short-term challenges such as increased operational costs tied to redesigns and new supplier partnerships, the study points out emerging opportunities for high-performance, EU-compliant recycled plastics. Companies are advised to standardize packaging across different markets, which will facilitate compliance and operational efficiency.
A Catalyst for Domestic Change
The regulation from the EU is not just changing external compliance standards; it's also acting as a catalyst for reforming domestic recycling operations in China. The result could be a boost in the local demand for recycled materials and improved tracking and quality of material processes.
Conclusion
Helen McGeough, Global Analyst Team Lead at ICIS, states, “This study indicates that the EU circularity regulation is evolving beyond a regional policy into a global market force that is shaping industrial strategies and supply chains worldwide.” The increasing regulatory momentum suggests that both businesses and policymakers should view compliance not solely as a challenge but as an opportunity to foster innovation, secure market access, and lead globally in the circular economy.
To dive deeper into these findings, the full report can be accessed via ICIS's official portal.
Topics Consumer Products & Retail）
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