BIR reports highlight global struggles for plastic recyclers

Market reports filed by members of the Plastics Division of the Brussels-based Bureau of International Recycling (BIR) for the fall season discuss a global recycled plastics industry enduring a year of contraction with little relief in sight.

According to Max Craipeau of Hong Kong-based Greencore Resources Ltd., the industry is likely to end this year with an estimated 1 million tons of recycling capacity lost across the United States, Europe and Asia.

An international view

In Craipeau’s view, the driver is clear: cheap virgin resin prices fueled by low oil costs and persistent polymer oversupply rather than trade or imports.

In Europe, in particular, he says recyclers have faced a “severe correction.”

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“Numerous facilities, including high-profile operators, have shut down amid record-low margins and limited demand,” he says. “Despite the EU Single-Use Plastics Directive and upcoming Packaging and Packaging Waste Regulation, enforcement remains weak.”

He says European converters are shifting to virgin material due to the price gap between virgin polyethylene terephthalate (PET) and its recycled counterpart, in particular. Since 2023, Europe has lost almost 1 million tons of installed annual recycling capacity, which Craipeau says undermines the continent’s circular economy ambitions.

He also says Asia is mirroring that downturn.

In India, for example, he says recycled PET (rPET) demand collapsed after the government postponed enforcement of its 30 percent recycled-content mandate, idling about 200,000-250,000 tons of annual capacity. Malaysia’s import ban on U.S. plastic scrap has disrupted regional feedstock flows, while oversupply in China and compliance costs linked to EU traceability rules continue to put pressure on margins.

He says regional capacity losses are estimated to be 300,000-400,000 tons for this year.

Division member Natalia Cruz Cayuela of Ferromolins SL, Spain, similarly describes Europe’s situation as “critical.” In addition to the lost capacity in Europe, she says projected growth is zero, and plans by companies such as Borealis, Dow and Neste to develop large plastic recycling plants have been abandoned.

“There are several factors fueling this crisis,” Cayuela writes. “On the one hand, there is a decline in demand for recycled products manufactured in the EU, growing economic pressures and excessive bureaucracy. Furthermore, there is an abundance of virgin plastic, which is cheaper than recycled plastic.”

Division President Henk Alssema of Netherlands-based Inviplast writes that Europe’s plastics recycling sector is “facing a critical tipping point,” citing the price spread between virgin and recycled resins, virgin oversupply and sluggish economics.

Alssema also points to the latest round of United Nations plastics treaty negotiations, which concluded in August without an agreement.

“For the recycling industry, this is a serious setback,” he writes. “As long as no global commitments are made on virgin production and additives, recyclates remain at a fundamental disadvantage.

“What is essential now is the creation of a level playing field that fully recognizes the environmental value of recyclates. Without clear price signals on virgin resin and enforceable recycled content obligations, further disinvestment is inevitable at a time when global plastic waste volumes are continuing to rise.”

Alssema notes one European bright spot, however.

In France, a new rule taking effect Jan. 1, 2026, will introduce minimum recycled content requirements for certain plastic products and packaging. He says the law also includes financial incentives for producers who exceed these thresholds, as well as provisions to promote recycling within a 1,500-kilometer proximity principle. For example, he says beverage bottles will be required to contain at least 25 percent rPET by 2029 and 30 percent from 2030 onwards.

“While limited to one country, this measure demonstrates how concrete steps can be taken to stimulate the use of recyclates in end products and offers a glimpse of what broader policy action could achieve,” he says.

Difficult year in the US

Board member Sally Houghton of The Plastic Recycling Corp. of California writes that PET has been the most severely affected by the surge in low-priced virgin and recycled imports.

"Its dominance in packaging and widespread use make it particularly vulnerable to global trade fluctuations," she says.

In California, for example, she says reclaimers are “operating at a fraction of their usual throughputs," in many cases below 50 percent capacity, with reduced shifts, workforce cuts and sharp pullbacks in bale purchases becoming the norm.

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“Planned facility expansions and fresh investments have been put on hold as operators shift into ‘survival mode’ as they await market stability,” she says, noting the strain on the industry became more visible recently when a large reclaimer closed, citing unsustainable financial losses and difficulty competing with imported resin.

Houghton does highlight one encouraging trend—a drop in PET bale pricing from 29 cents per pound in May to 10 cents per pound as of early October.

“While temporary, this offers some relief in terms of production costs and may help domestic reclaimers regain their footing,” she says, though she also notes that reclaimers already have endured nearly two years of sluggish demand.

Newly imposed tariffs on both PET and rPET also offer a potential bright spot, according to Houghton, who says the shift in trade policy has already prompted cancellations of export orders, although the full impact is unlikely to be felt until November when quarterly contracts reset.

“For now, importers are holding back on commitments while they reevaluate cost structures,” she writes. “The combination of tariffs and lower bale costs is beginning to tilt conditions slightly back towards U.S. producers—at least in the short term.”

In regard to other recycled resins, natural high-density polyethylene (HDPE) recently has steadied at 45 cents per pound after a steep drop that began in the spring. Mixed-color HDPE, on the other hand, has remained stagnant.

Houghton says U.S.-based polypropylene (PP) producers also are under heavy strain from low-cost imports, with pricing falling to 4 cents per pound amid an uncertain outlook.

“A cooling housing market and tariff adjustments are already dampening demand, leaving little expectation of a near-term rebound," she says.

Looking ahead, Houghton says the plastics industry continues to battle significant headwinds.

“While tariffs are beginning to shift trade patterns, low-priced imports remain a major drag on domestic demand and pricing,” she says. “Unless new policy support emerges or broader market conditions improve, 2026 is shaping up to be another difficult year for reclaimers and recyclers. Thin margins, persistent uncertainty and limited demand will continue to suppress investment in facility upgrades and quality improvements.

“Among all the resins, PET is the most exposed and remains under the greatest pressure.”