- Circular plastics demand growth slows to 4% in 2022-24
- Far East-North Europe freight rates drop 29% by September
Europe’s plastics recycling industry continues to face weak demand, narrow margins and international competition, according to the Bureau of International Recycling’s (BIR) October 2026 quarterly report released on 12 October. Despite rising virgin polymer prices, recyclers have struggled to increase selling prices, highlighting the gap between raw material cost movements and actual demand for recycled plastics.
Capacity closures deepen industry pressure
European plastics recycling capacity declined by approximately 0.3 million tonnes (mnt) in 2024, reflecting the industry’s growing economic challenges. High operating costs, competition from virgin plastics and low-priced imports have contributed to capacity closures, according to industry reports.
The closures underline the difficulty of maintaining recycling operations when sales volumes and margins remain insufficient to support production.
Demand growth slows as import competition persists
According to Plastics Europe, annual growth in European converter demand for circular plastics slowed from 16.2% during 2018-22 to 4% during 2022-24. Circular plastics accounted for 7.9 mnt of European plastics conversion in 2024, with imports meeting 19% of converter demand for circular plastics.
The slowdown indicates that demand for recycled materials continues to grow, but at a substantially weaker pace than in previous years. This limits the industry’s ability to absorb available recyclates and improve margins.
Meanwhile, lower freight costs have strengthened the competitiveness of Asian exporters supplying Europe. By 24 September, spot freight rates from the Far East to North Europe had declined 29% from 1 July levels, while rates to the Mediterranean were down approximately 38%, according to the BIR report.
EU regulation offers longer-term support
The EU Packaging and Packaging Waste Regulation (PPWR), which began applying on 12 August 2026, could support future investment. However, broader recycled-content requirements are scheduled to apply from January 2030 or three years after the relevant implementing rules enter into force, whichever is later.
The BIR report also highlighted restrictions on non-EU recyclates counting towards the EU’s 25% recycled-content target for PET bottles until 21 November 2027.
For now, stronger sales volumes and sustainable margins remain critical to preserving European recycling capacity. Regulatory support could improve future demand visibility, but it has yet to resolve the industry’s immediate commercial pressures.
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