INFOGRAPHIC: Setbacks mount for Europe's plastic recycling sector amid regulatory uncertainty

The European plastic recycling industry is facing severe headwinds marked by a series of plant closures in the mechanical recycling segment and shelving of planned investments in the chemical recycling sector.

Industry body Plastics Recyclers Europe, warning of an "imminent collapse" of the industry, estimates that almost 1 million mt/year of existing capacity will have been lost between 2023 and the end of 2025.

A widening pricing gap between recycled and virgin this year continues to divert buying interest away from recycled grades. Higher-cost regions in Europe, including the UK and Northwest European countries like Germany, have been particularly affected by major closures in 2025 so far.

In the UK, investment firm KKR said in August it would sell waste manager Viridor amid the challenges faced by the plastic recycling sector, which resulted in the closure of three plants. The most recent of these was a plant located in Rochester, which closed its doors ahead of the sale announcement. These closures scaled back the country's recycling capacity by 132,000 mt/year for the R-PET, R-PP and R-PE segments.

Also in the UK, another waste manager, Biffa, closed its Sunderland plant earlier in the year due to "challenging conditions for washed high-density polyethylene (HDPE) and polypropylene (PP) flake," following the rapid recovery and short boom post-COVID, the company said. The plant had a 39,000 mt/year recycling capacity, scaling back regional recycling capacity by the same amount for R-HDPE and R-PP.

European waste manager Veolia also closed its Multipet and Multiport subsidiaries in Germany with a total capacity of 70,000 mt/year.

There has also been a wave of announcements shelving investments in the chemical recycling segment, with market players citing a disappointing lack of regulatory push hindering investment decisions and delaying the arrival of mandated demand.

A decision by US energy group and major petrochemical producer ExxonMobil is the latest, putting on hold plans to build two chemical recycling plants in Antwerp, Belgium, and Rotterdam, the Netherlands, citing a lack of clarity on mass balance.