New study discusses impact of EU regulation on global recycled plastics demand

London-based International Commodity Intelligence Services (ICIS) and Beijing-based China Petroleum and Chemical Industry Federation (CPCIF) have released a study on how the European Union's circularity regulation impacts global demand for recycled plastics, generally and for China's chemical industries, with points across the packaging, automotive and textiles industries. 

Driven by the implementation of the EU Packaging and Packaging Waste Regulation (PPWR), a regulation designed to minimize packaging waste, enhance recyclability and promote sustainable practices across packaging, the study predicts a sharp increase in demand for recycled content, particularly for polyethylene (rPE), polypropylene (rPP) and polyethylene terephthalate (rPET). 

Key findings 

The study says by 2030, EU producers will require approximately 5.4 million metric tons per year of rPE, rPP and rPET to meet the mandated minimum recycled content targets. The organizations expect this figure to more than double, requiring 11.5 million metric tons per year by 2040, due to regulations across packaging, automotive and fiber applications. 

The study says chemical recycling will be essential to meet the required volume of recycled polyolefins for packaging due to limitations in mechanical recycling. 

The interconnected nature of trade means EU regulations will influence global supply chains, as exporters placing goods in the EU market must comply with recycled content requirements. The study says this will impact sourcing strategies and boost demand for certified recycled materials globally. 

ICIS and CPCIF say China will continue to play an important role in the EU's plastics supply chain. As a major EU trade partner, the study says China is expected to supply more than 1 million metric tons per year of recycled plastics by 2040 to meet the demand for export-bound finished goods. 

The study highlights a shift among Chinese exporters from reactive compliance to proactive positioning, saying firms are investing in certified recycled and bio-based materials, aiming to turn regulatory requirements into sources of competitive differentiation. 

Although short-term operational costs are expected to rise due to redesigns, certification procurement and supplier changes, the study points to emerging market opportunities for high-performance, EU-compliant recycled plastics—including companies standardizing packaging across markets to streamline compliance. 

The report says the EU's regulation is acting as a catalyst for China's domestic recycling reforms, potentially boosting internal demand for recycled content and improving consistency in material traceability and quality. 

"This study shows that EU circularity regulation is no longer just a regional policy; it's becoming a global market force, shaping industrial strategies and supply chains worldwide," says Helen McGeough, ICIS global analyst team lead for plastics recycling. "China's proactive response may prove pivotal in narrowing the gap between domestic and international standards and accelerating the global transition to a circular economy." 

The full report includes case studies, an overview of China’s regulations on recycled polymers and key trends in the textile, automotive and packaging industries.