The European Commission is preparing a set of measures designed to protect the EU’s plastics recycling industry from low-priced imports and to make it easier for recycled plastics to circulate inside the single market.
The initiative follows warnings from industry groups and several member states that European recyclers are being undercut by imported material that is cheaper than domestically produced recyclate and, in some cases, may be misdeclared.
Commission documents describe a sector under pressure from high energy costs, volatile prices for virgin plastic linked to oil markets, and weak demand for recycled content in some applications. The Commission says EU installed plastics recycling capacity reached 13.2 million tonnes in 2023, but growth slowed sharply and is expected to turn into a net decline of around one million tonnes by the end of 2025.
The scale of closures has become politically salient in recent weeks. Environment Commissioner Jessika Roswall told the Financial Times the industry was in “deep crisis”, citing roughly one million tonnes of recycling capacity shut across the EU over 18 months, including 10 plants in the Netherlands.
A clampdown on mislabelling and tighter border controls
A central concern for Brussels is the integrity of imports marketed as recycled. The Commission and several national governments suspect that some virgin plastic may be entering the EU supply chain as “recycled” material, allowing it to compete directly with European recyclate while meeting corporate purchasing requirements for recycled content.
To address this, the Commission has announced the creation of separate customs codes for virgin and recycled plastics, intended to improve traceability and enforcement by customs and market surveillance authorities. Reuters says the Commission also plans audits of recycling plants, including outside the EU, and support for laboratory testing to verify whether shipments are genuinely recycled. The Commission will take stock of these measures during 2026, alongside monitoring of EU and global markets that could inform possible trade measures.
The measures target exporters that have benefited from the price gap between virgin and recycled polymers. China is repeatedly cited in industry and media coverage as a major source of low-priced polymer imports into Europe, reflecting both overcapacity and aggressive export pricing.
A single market for recycled plastics
Alongside import controls, the Commission is trying to reduce internal barriers that make it difficult to move plastic waste and recyclate across borders inside the EU. It has published a draft implementing act under the Waste Framework Directive to establish EU-wide “end-of-waste” criteria for mechanically recycled plastics. The objective is to define when a recycled plastic output stops being legally treated as “waste” and becomes a product that can circulate more easily across the Union.
The Commission has put the draft act out for public feedback until 26 January 2026. In its accompanying communication, it cites industry estimates that the absence of harmonised end-of-waste criteria costs the EU plastics recycling sector about €120 million a year in additional administrative and compliance burdens.
Chemical recycling: new counting rules for recycled content targets
The third strand is regulatory clarity for chemical recycling. The Commission is proposing “mass balance allocation rules” that would determine how outputs from chemical recycling can count towards recycled content requirements under the Single-Use Plastics Directive. The first application is linked to the directive’s targets for recycled content in beverage bottles: 25 per cent recycled content in PET bottles by 2025 and 30 per cent in all beverage bottles by 2030.
For investors, the Commission argues that harmonised calculation, verification and reporting rules could reduce uncertainty and unlock capital. It says the European plastics industry is planning investments of up to €8 billion in chemical recycling in the coming years, contingent on a workable regulatory framework.
Who stands to lose, and who gains
The countries most exposed on the export side are those supplying low-cost polymers and recyclate-like materials to the EU market. China is the principal focus in current reporting, though the Commission’s measures are framed as non-discriminatory enforcement tools rather than China-specific restrictions.
Inside the EU, beneficiaries include recyclers facing immediate price pressure, laboratories and inspection bodies involved in verification, and chemical recycling firms whose outputs may qualify for mandated recycled-content quotas. Brand owners and packaging manufacturers could face higher compliance costs if cheaper imported inputs are challenged or reclassified, particularly where supply chains rely on imported “recycled” polymers.
The wider trade context is relevant. The EU already imposes anti-dumping duties on certain PET plastics from China, with definitive measures adopted in 2024 for a five-year period.
The link to industrial competitiveness and carbon costs
The plastics package is landing alongside broader efforts to cushion energy-intensive industry from EU carbon-related electricity costs. On 23 December 2025, Reuters reported that the Commission expanded ETS-related state-aid guidance by adding 20 sectors eligible for compensation for indirect emission costs, including parts of chemicals, ceramics, glass and batteries.
