The plastic recycling industry is facing an unprecedented crisis, with widespread plant closures and canceled projects across Europe and the United States threatening to undermine environmental sustainability and economic stability. Driven by high costs and competition from cheaper virgin plastic imports, the sector urgently requires policy interventions to avoid collapse and maintain progress toward a circular economy.
In recent months, numerous recycling facilities have shuttered, including Biffa’s Sunderland plant in the UK and Viridor’s operations in Avonmouth and Skelmersdale, while Veolia plans to close two German plants this year. Additionally, major companies like Borealis, Dow, and Nester have abandoned plans to build new recycling plants in Europe, resulting in a loss of nearly one million tonnes of plastic recycling capacity since 2023. Industry experts warn that without immediate action, Europe risks replacing its recycling infrastructure with dependency on unsustainable imports, exacerbating waste management challenges.
The primary factors behind this decline include soaring energy and labor costs in Europe, which make it difficult for recyclers to compete with Asian producers offering cheaper virgin and recycled plastic. James McLeary, managing director of Biffa’s polymers division, explains that many plants are operating at a loss or facing closure decisions, as sourcing materials from Asia is currently more economical than using European recycled plastic. This economic pressure is compounded by loopholes in UK legislation that incentivize plastic waste exports over domestic processing, with the country shipping around 600,000 tonnes abroad last year.
This crisis disrupts the circular economy model, where materials are kept in use for as long as possible, as manufacturers often opt for cheaper virgin plastic and pay associated taxes rather than investing in recycled materials. Ahmed Detta, CEO of recycler Enviroo, highlights the lack of alignment among brands, noting that economic benefits are not distributed evenly across the supply chain. Steve Morgan of RECOUP cautions that the UK is witnessing the potential demise of plastic recycling without interventions, as commercial viability remains elusive despite technological advancements.
In response, the UK government has outlined packaging reforms, a £10 billion investment in new sorting and processing facilities, and a Deposit Return Scheme set to launch in 2027 to improve material quality. A spokesperson from the Department for Environment, Food and Rural Affairs emphasized that these measures aim to reduce waste exports and support domestic recycling. However, critics argue that more urgent actions are needed, as current regulations have benefited foreign markets more than the UK.
Across Europe, concerns are mounting that investment shifts abroad could set back environmental goals. Virginia Janssens, managing director of Plastics Europe, warns that if large production plans are built elsewhere, Europe may face increased reliance on incineration and landfill, reversing decades of progress. Despite these challenges, some positive developments offer hope, such as Biffa’s acquisition of bottle manufacturer Esterform and Enviroo’s £58 million funding for a new PET recycling plant in northwest England.
Enviroo’s facility, expected to be operational by 2026, will process up to 35,000 tonnes of plastic annually, converting drink bottles into recycled granulate for food packaging. Similarly, Plastic Energy is successfully using pyrolysis technology to transform plastic waste into oil for making food and medical grade plastics, with plants in Spain, France, and the Netherlands. CEO Ian Temperton anticipates benefiting from future under-supply as recycled content targets tighten across Europe.
Looking ahead, the industry’s survival depends on policy reforms, such as RECOUP’s proposal for a single plastic recycling certification scheme to reduce exports and encourage recycled material use. With a UK government consultation underway this year, there is optimism for changes that could stabilize the sector. However, without swift and decisive action, the plastic recycling industry may continue to decline, jeopardizing global sustainability efforts and increasing environmental pollution.