Recycled content requirements are welcome, but the transition period must not go to waste

 

Guest expert blog

Jaakko Tuomainen
Sustainability Manager, Borouge International

Jaakko Tuomainen is a member of Sumi’s Board of Directors and works at Borouge International to promote the circular economy for plastics.

 

Recycled plastic needs a functioning market

The EU’s new Packaging and Packaging Waste Regulation (PPWR) introduces mandatory recycled content requirements for plastic packaging, marking an important step towards a more effective circular economy for plastics. In practice, this means that a certain proportion of the raw material used to manufacture packaging will have to be recycled plastic. A similar approach is already used for transport fuels, where the share of renewable fuels has been gradually increased through blending mandates.

I see this requirement to boost demand as a very welcome development. After all, plastic recycling depends not only on collection and recycling technologies but also on demand for recycled materials. It is this demand that will determine how quickly new investments in plastic recycling are made in Europe.

The past few years have been difficult for the recycled plastics industry. Although many voluntary commitments have been made to promote the use of recycled plastic, demand has not grown as expected. As a result, several recycling companies have faced financial difficulties, production has been reduced and investments have been postponed. At the same time, Europe is preparing for targets that will require significantly larger volumes of recycled plastic than are currently available.

The transition period should be used to prepare

In this situation, it is interesting to look at what Germany is doing. In recent years, Germany has sought to speed up the transition to a circular economy through national measures even before EU requirements take effect. Under legislative reforms adopted in Germany, rules on mandatory recycled content are expected to take effect as early as 2027, three years ahead of the EU-wide requirements. Whether Germany will meet this timetable remains to be seen. However, its active role shows that Member States can lead the way even before common EU requirements are fully implemented.

In any case, I strongly support taking action early. A gradual transition gives companies time to develop their supply chains, test the use of recycled materials in their products and build their expertise step by step. At the same time, recycling companies get a clearer picture of future demand, making investment decisions easier.

Incentives could accelerate the use of recycled plastic

I see a risk that too many companies will simply wait for the mandatory requirements to take effect. The targets coming into force in 2030 will not be met if a significant part of the market only starts buying recycled plastic just before the deadline. A sudden increase in demand could lead to higher prices and supply challenges. High-quality recycled raw materials suitable for demanding applications may become particularly scarce. That is why I would encourage companies to start taking action now.

Financial incentives could also be introduced for companies that act early. One option could be a system where the use of recycled plastic ahead of schedule counts towards meeting future recycled content requirements. Another option would be to include the use of recycled plastic in packaging in eco-modulation, reducing producer responsibility fees, as is already done in the Netherlands, for example. Such incentives would give companies a clear financial reason to increase their use of recycled plastic now, rather than waiting until they are required to do so.