The European Commission is accelerating the circular transition of the plastics recycling sector

The European Commission has presented a package of measures aimed at to accelerate the European Union’s transition towards a circular economy. These changes will initially affect the plastics manufacturing and recycling sector. The documents, published at the end of 2025, constitute pilot project ahead of the planned Circular Economy Act, which is intended to comprehensively regulate the market for waste and recyclable materials in the EU.

The Circular Economy is a cornerstone of the EU’s plastic recycling sector’s competitiveness

On 23 December 2025, a communication was published on the European Commission’s website regarding the acceleration of Europe’s transition to a circular economy, which announces taking swift and decisive action to support the plastics industry. According to the Commission, the situation in the European plastics recycling sector has become critical. In the EU Around 58 million tonnes of plastics are produced each year, of which:

• only around 50% is collected and sorted,
• as little as Approx. 13% is sent for material recycling.

In recent years The rate of growth in recycling capacity in the EU has clearly slowed from 17% in 2021 to 10% in 2022 and 6% in 2023. By the end of 2025, the EU’s total recycling capacity is set to fall by a further 1 million tonnes, bringing The EU’s ambitious climate targets are in doubt. Furthermore, between 2010 and 2024, the rate of secondary material use in the EU rose only from 10.7% to 12.2%, which means that doubling circularity by 2030 may be beyond the reach of Member States.

Having analysed this and much more data, the Commission concluded that without swift intervention The EU will not be able to meet its mandatory recycling targets, arising, amongst other things, from the legislation on packaging, single-use plastics and end-of-life vehicles. At the same time, the Commission emphasises that the circular economy is not only a tool for achieving the EU’s environmental objectives, but also a key element of economic security and industrial competitiveness. Increasing circularity is intended to reduce the EU’s dependence on imports of virgin raw materials, cut emissions and strengthen the resilience of the European economy in the global market.

Why is the European Commission focusing on the plastics sector?

The decision to take immediate action specifically in the plastics sector was no coincidence. The European Commission emphasises that its aim is to remove barriers to the circularity of all materials, whilst at the same time recognising that the European plastics recycling industry is struggling with rising energy costs, price pressure from cheap raw materials and competition from imports, often based on false claims regarding the recycled content.

The Commission also points out that the development of circular solutions in the plastics sector could not only strengthen the European recycling and innovation industry, but also reduce CO₂ emissions by around 80 million tonnes per year and improve the EU’s trade balance by around EUR 18 billion by 2050.

Pilot scheme ahead of the Circular Economy Act – what does the European Commission plan to implement in the coming months?

The press release outlined a set of short-term measures designed to stabilise the market and pave the way for future systemic reform. The European Commission has explicitly stated that this package is pilot and transitional in nature, but it clearly sets out the direction of change. The planned Circular Economy Act is intended to create a single EU market for waste and secondary raw materials in the future, increase demand for recycled materials, remove regulatory barriers and strengthen the EU’s strategic autonomy in the field of raw materials.

Uniform „end-of-waste” criteria for recycled plastics

One element of the EC package is a draft implementing regulation from the European Commission, which introduces criteria that are uniform across the EU specifying when plastic waste ceases to be waste and becomes a secondary raw material.

The provisions of the Regulation relate primarily to thermoplastics (including PE, PET, PP and PS), as these are the most common fractions found in waste streams. Provided that certain quality and process requirements are met, recycled material from these plastics:

• will no longer be treated as waste,
• will be able to circulate freely within the EU’s single market,
• it will become a fully-fledged raw material for industry.

The Commission emphasises that The lack of common end-of-waste criteria has so far resulted in additional costs of around EUR 120 million annually. Recyclers most often experienced these in the form of administrative and logistical barriers.

YES to recycled material from chemical recycling

The package proposed by the European Commission confirms that Chemical recycling is part of the EU’s circular economy strategy, provided that it delivers better environmental outcomes than incineration or landfill. The Commission is proposing, for the first time, the introduction of common rules on mass balance (mass balance), which will enable counting recycled material derived from chemical recycling towards the mandatory recycled content targets, e.g. in PET bottles.

Read also: The European Commission gives the green light to chemical recycling >>

In the recycling sector, this means the green light for the development of chemical recycling technologies and increased investment in new facilities, as well as greater opportunities for processing plastic waste that is unsuitable for mechanical recycling. Businesses will not only gain greater investment certainty, but also by introducing consistent EU-wide rules on reporting the recycled content of packaging and products.

Find out about Interzero’s chemical recycling initiatives >>

New obligations for plastics recyclers

Under the new regulations, operators of plastic recycling facilities will be required, amongst other things, to:

• implementations a certified quality management system that will confirm compliance with the end-of-waste criteria,
• carrying out regular tests on the composition of the recycled material,
• compliance with the content limit foreign matter amounting to less than 1.9% of the mass recycled material,
• issuing electronic declarations of conformity for each consignment of secondary raw materials and their delivery to recipients of recycled materials; a template for such a declaration is set out in the Annex to the Regulation.

Importantly, The same requirements will apply to importers of recycled materials originating from outside the EU. This is intended to level the playing field between local recyclers and recycling companies from third countries, and to prevent EU environmental regulations from being circumvented, for example through the use of false quality declarations.

Protecting the EU market from unfair imports

In its communication, the Commission explicitly states that one of the main problems facing the EU plastics market is the massive volume of imports cheap plastics from third countries and cases where virgin plastics are sold as recycled plastics. To eliminate unfair practices and ensure a level playing field for EU and non-EU operators, the Commission proposes to introduce:

• new customs codes distinguishing between virgin materials and recycled materials,
• stricter checks on recycled materials intended for contact with food,
• audits of recycling facilities in third countries that produce recycled materials imported into the EU,
• further anti-dumping and anti-subsidy proceedings.

These measures are intended to directly strengthen the position of European recyclers, who have so far been competing with importers of recycled materials that do not meet comparable quality standards.

Investment and innovation as a prerequisite for the success of the European Commission’s plan

One of the main reasons for the decline in circularity indicators is insufficient investment in the circular economy. As stated in the press release, the public sector currently covers only 7% of the total costs associated with the circular transition. Although this figure is likely to rise in the coming years (partly due to the proposed multiannual financial framework), the majority of funding will still need to come from the private sector. According to the Commission’s estimates, the investment gap in the circular economy stands at €82 billion per year, and incentives for private investors are needed to bridge this gap. To this end, the European Commission plans, amongst other things, to:

• a pilot scheme for trans-regional circularity hubs,
• strengthening the role of the European Investment Bank, including by continuing the Joint Initiative on the Circular Economy (JICE),
• continued support for research and development projects under the Horizon Europe programme,
• simplifying environmental procedures for recycling projects.

You can read more about the planned measures and changes in the plastics recycling sector in the European Commission’s communication of 23 December 2025.

Sources:

1. Questions and answers on the Circular Plastics Package, https://ec.europa.eu/commission/presscorner/detail/es/qanda_25_3152
2. Information about the initiative, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14848-Odpady-tworzyw-sztucznych-ogolnounijne-kryteria-zniesienia-statusu-odpadu_pl
3. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, https://environment.ec.europa.eu/document/download/60277c52-77f0-4860-b6cc-cdaf6665e336_en?filename=COM_2025_805_1_EN_ACT_part1_v3.pdf