It’s no secret that recently announced EU legislation on packaging sustainability will have a significant impact on how organisations within the sector operate. However, could a lack of clarity around these proposed new rules negatively affect future investment in crucial areas such as chemical recycling and reuse systems? Matt Tudball, Senior Editor, Recycling at ICIS, drills down into this issue in our latest comment piece.


The European plastics recycling industry is changing dramatically due to regulations from the European Commission, but these regulations have seemingly been drafted without listening to the (increasingly frustrated) voices of those most impacted.

The lack of clarity surrounding legislation targeted at reducing plastic waste and building a circular economy is such that it casts a major shadow over future investment in crucial areas such as chemical recycling and re-use systems across Europe.

The EU has moved uncharacteristically quickly when it comes to passing new regulations around plastics and recycling. The Single Use Plastics Directive (SUPD) was completed within a record 8-9 months, showing how keen EU policy makers are about placing sustainability front and centre.

But speed may be presenting greater challenges to implementation when it comes to revisions of current regulations, giving the industry little time to understand and prepare for some huge changes that will impact it significantly.

Over 240 PET industry players converged on Brussels in early February to hear Commission representatives speak at the annual Petcore conference. They hoped to get some clarity on the Commission’s position regarding new and existing legislation, including the status of chemical recycling.

Those hopes were not realised.

The two main culprits currently causing headaches for Europe’s recycling sectors are:

• The Packaging and Packaging Waste Regulation (PPWR)

• Regulation (EU) 2022/1616 on ‘recycled plastic materials and articles intended to come into contact with foods’

PPWR vs. the packaging sector

Following the revision to the PPWR published on 30 November, there were strongly-worded statements and announcements from industry bodies and associations relating to the proposed changes.

Those posts repeated concerns that Europe just does not have the collection and sorting capacity to meet both existing and proposed recycled content goals, plus the new re-use targets the Commission has thrown into the PPWR.

Even before the PPWR revision, UNESDA, the organisation representing Europe’s soft drinks industry, called for EU action to help members meet the mandatory recycled content targets for PET beverage bottles set out in the SUPD.

The current target is for all PET beverage bottles to contain 25% R-PET by 2025, extending out to all SUP beverage bottles containing 30% recycled content by 2030. The PPWD now adds on a new target of 65% for SUP beverage bottles by 2040.

Many UNESDA members are concerned about access to the required volumes of R-PET, and the price needed to secure it.

Portuguese SME Água de Monchique stated it already finds the price for R-PET too high and is concerned availability will become even more limited closer to the 2025 deadline.

The Slovenian Beverages Association, echoed these concerns, adding that many SMEs are “currently facing a severe crisis due to the rising prices of recycled material and its general unavailability.”

UNESDA asked for the revision to include an introduction of a priority right mechanism – a first right of refusal – for the companies both placing PET bottles on the market and expected to use increasing levels of R-PET in the future.

To date, this request has not been acknowledged.

In a similar move, in September 2022 the European Packaging Value Chain issued a joint statement from more than 60 industry associations across the European packaging chain expressing “serious concerns” over the revision.

As joint statements go, this one did not hold back in voicing its displeasure at the revision, stating the current approach will lead to an unworkable regulatory environment and could cripple multiple sectors of the industry “with significant risks of disruptions in many EU supply chains and for our trade flows”.

It also stated that “by dismissing the key role of recycling to achieve packaging circularity, it would paradoxically serve to make it harder to convert waste into viable, secondary raw materials that can be used in the market, setting back the cause of recycling while jeopardising millions of jobs and billions of euros of investments”.

The reaction to the Commission’s revisions have been quick and direct, showing genuine concern from amongst the packaging and recycling sector that these changes could do serious harm to the ability to invest in sustainable solutions by Europe’s recycling and packaging industry going forward.

Revolt over reuse targets

The PPWR has put an onus on re-use targets for the beverage sector and many are also not clear on, or happy with, what these targets are requesting of the industry.

Article 26 of the lengthy PPWR document set out various reuse targets for a wide range of products, including alcoholic and non-alcoholic (including mineral water and soft drinks) beverages.

Summarised, the re-use targets are 10% of non-alcoholic beverages and 20% of hot and cold take-away beverage container by January 2030, increasing to 25% for non-alcoholic beverages and 80% of hot and cold take-away containers by 2040, and the regulation also makes the manufacturer and final distributor of those products responsible for hitting those targets.

UNESDA expressed concerns that the Commission will not give its members sufficient time to implement the changes laid out in the methodology around re-use to be implemented.

The Commission-drafted methodology will be available in December 2028, giving the sector just one year to invest in technology and make the necessary changes to meet the 2030 target date.

The ALDI SOUTH Group said the proposed re-use targets would mean high investment costs for the discount retailer, as well as giving over a substantial amount of floor space to accommodate the return systems needed at each store – a particular issue for a company that makes every square meter count to deliver lower prices to its customers.

UNESDA’s Director General, Nicholas Hodac, welcomed the regulation as a good step to help accelerate the move to a circular economy but said the regulation did not take into account the diversity in each member state.

The environmental footprint of reuse systems was also raised, querying the impact of such systems in certain applications or markets as no analysis has seemingly been conducted. With overall net zero targets across regulation and industry, it was suggested assessment of the impact of reuse systems such as life cycle analysis is essential to making the right choices for the environment in line with circular economy, rather than potentially in contradiction.

Countries such as Germany already have a well-established re-use system for PET bottles, but for other EU countries, education and communication will be key to get consumer buy-in and ensure they understand how to make the system work.

Make or break for thermoforms

Regulation (EU) 2022/1616 on ‘recycled plastic materials and articles intended to come into contact with foods’ is particularly concerning for R-PET thermoformers, who produce packaging using the A-B-A layer process.

The concern lies around whether the functional barrier which separates the PET (A) layer from the R-PET (B) layer in items like food packaging trays will be classed as a ‘novel technology’ by the Commission.

The decision on the classification of the barrier (which has been a staple across the industry for many years) will be made in July 2023.

If the barrier is classed as a novel technology, companies using these barriers will need to prove to the Commission and the European Food Safety Authority (EFSA) that the barriers prevent migration from the R-PET to the PET layer. This will be done via a two-six-year reporting period, after which the Commission and EFSA will decide if it is a suitable technology.

If the Commission decides the barrier is not a novel technology, then, to put it simply, companies will have to stop using any R-PET material that has not been decontaminated in their thermoform production.

Recyclers and packaging producers are hopeful the Commission will take a pragmatic view on the barrier, and that after the testing period, they can continue with a ‘business as usual’ approach.

Threat to investment

One vital point was not clarified by the Commission at the Petcore conference – the status of chemical recycling.

Attendees were desperate for clarification if chemically recycled material will count towards Europe’s targets, with Marco ten Bruggencate, Commercial Vice President Packaging & Specialty Plastics EMEA at Dow, who was also speaking as the president of Plastics Europe, stating on stage that the lack of legal certitude is a direct threat to future investment in the sector.

Ten Bruggencate said Dow needs to make a final investment decision (FID) on a €300m European plant in September, but that decision will not happen if chemical recycling does not count towards mandatory targets under the PPWR.

2030 might seem far away, but 2025 is just around the corner, and the clock is ticking. The industry wants to hit the Commission’s targets, but without clarity, guidance and investment, there is a possibility it won’t happen.

Additional reporting by Mark Victory, Senior Editor, Recycling, at ICIS & Helen McGeough, Senior Analyst and Global Analyst Team Lead, Plastics Recycling at ICIS.