Achieving the European Union’s (EU) vision of a circular plastics economy requires an additional €20 billion in investments, legislative change and commitments to use more recycled plastic.

The EU is on a trajectory to underperform against its own plastics recycling goals.

Just 11 percent of used plastics are currently recycled, and most of that is into low-value applications like shopping bags or food wrappings.

The picture is especially grim for the polyolefins that package most goods, with roughly 60 percent of all waste incinerated or landfilled.  

Which begs the question as to how the EU can meet its increasingly ambitious recycling targets, including 55 percent recycling for plastic packaging by 2030, along with other bold goals.

A new paper entitled From waste to commodity: Delivering on the EU’s vision of a circular plastics economy from KPMG in the Netherlands and ESG charity the Minderoo Foundation discusses the scale of the problem and outlines ways to help overcome barriers to progress.

What’s holding back the plastics recycling revolution?

There are three main reasons why the current approach to recycling is not working, slowing the progress to a circular EU economy and causing continued environmental damage:

  1. Only half of post-consumer plastic waste is collected for recycling
    Although most EU countries collect plastic separately, about 50 percent ends up as ordinary trash in mixed waste. Even in countries with more advanced collection schemes — like Germany — a significant amount is not sorted and goes into waste.

  2. Even when it’s sorted, it’s often not recycled
    Two-thirds of the plastic waste that is collected and sorted is not actually recycled in Europe; it’s either incinerated, landfilled, or exported to countries where there’s limited transparency on its eventual use.

  3. And the plastic that is recycled is usually limited in both quantity and quality
    The EU is well behind on its plan to recycle between 15 to 30 percent of all its plastic by 2030. Improving this figure is made harder by the fragmented recycling sector and large amounts of investment needed.

The good news is that recent exciting recycling technology breakthroughs — along with new models for recycling — have the potential to overcome these challenges.

Unblocking the circular plastics chain

With an EU target of increasing advanced mechanical and chemical recycling from 1 million to 7 million metric tons by the end of the decade, things need to move fast.  

Firstly, recycling capacity must be dramatically increased, more specifically the sorting of plastics from mixed waste, preventing plastic waste from escaping the recycling system.

Secondly, the quality of sorted plastics needs to improve, which would in turn raise the quality of recycled plastic and enable its use across a wider range of products. This is about focusing on quality, including through advanced mechanical recycling, and calls for higher regulatory standards for recycled plastic.

And thirdly, there should be mandatory recycled content targets to strengthen demand — especially for polyolefins — which would help drive investment into the sector.

To do all of this, an estimated €20 billion of commercial investment is needed to upgrade and expand infrastructure across all steps of the waste-to-recycling chain, building capacity, quality, and expertise.

How is it possible to attract such large amounts? The answer is through targeted regulatory interventions and clarifying how plastics buyers will contribute to the cost through levies on the use of plastic. These are known as extended producer responsibility (EPR) fees and have already been successfully used in Denmark and the Netherlands.

Such policies make it more commercially viable to invest in improvements to quality and capacity.

Given their expertise and deep pockets, large petrochemical companies are well-positioned to invest in chemical recycling. Brand owners and retailers also have a role to play by committing today to buying significant quantities of future recycled plastics — at a premium — which should encourage investors and recyclers to scale capacity, which in turn can help bring down prices in the longer term.

Hundreds have already committed to reduce their reliance on virgin plastic and increase the proportion of recycled plastic content in their products and packaging. This number needs to rise.

Accelerating circularity

Plastic is one of history’s most successful inventions that has enhanced people’s lives in many different ways — not just in the household, but also in areas like healthcare and technology.

But there’s an urgent need to change how plastics are produced and used, and how plastic materials are managed after use, reducing the dependency on virgin plastic and re-imagining plastic “waste” as a valuable commodity.

Improving the way in which plastic is produced and disposed of can help save natural resources, reduce ocean pollution and landfills, and ensure cleaner air.

If businesses can work together and policymakers can set clear legislative frameworks, it’s possible to stimulate necessary changes in both producer and consumer behavior and create a thriving circular plastics economy.

All figures sourced from:
From waste to commodity: Delivering on the EU’s vision of a circular plastics economy