Plastics, BCG: EU made strides in recycling, but warns of third-country imports

Brussels – Progress in the treatment of plastic waste is not enough: the European Union must pay more attention to imports of low-cost recycled plastics from third countries because there is a risk of destabilizing the market and, above all, causing a key sector in the transition to a circular economy and climate neutrality to suffer. This is the finding of the latest analysis by Boston Consulting Group (BCG), a strategy consulting firm with more than 90 offices in 50 countries and 22,000 professionals, which underlines how Europe has already achieved promising results. Not only do circular plastics currently comprise 13.5 per cent of new product and component content, up 37% in the last four years, but “by 2030, 25 per cent of European demand is expected to be met by circular plastics, rising to 65 per cent by 2050. This figure profoundly affects greenhouse gas emissions within the plastics system, leading to a 28 per cent reduction by 2030 and thus helping to achieve carbon neutrality by 2050,” BCG pointed out. On the regulatory side, the news also looks rosy: “The European Single-Use Plastic Directive pushes to achieve at least 25 per cent recycled content in plastic (PET) bottles by 2025 and 30 per cent by 2030.”

Yet, according to BCG, it is not enough and the EU is called upon to adopt “decisive and bold” policies. As Giulia Scerrato, Project Leader Energy Practice BCG, pointed out, like many other industries, “even recycling is not immune to surrounding economic uncertainties and the ongoing inflationary crisis. The recent growth of cheap recycled plastic imports from non-EU countries has destabilized the European market, reducing recycled material prices and threatening established recycling targets,” she explained. “To promote the circularity of plastic waste and the development of this industry, decisive and bold policy measures need to be taken to support a key sector in the transition to a circular economy and the achievement of carbon neutrality,” she further highlighted.

The problem, according to BCG’s analysis, emerges from the fact that incineration still accounts for 50 per cent of post-consumer plastic waste treatment, up 15 per cent in the past four years, followed by recycling (27 per cent) and landfilling (24 per cent)—while 50 per cent of plastics collected for recycling are exported outside the EU, thus missing the opportunity to turn waste into new resources within the EU economy. “The European recycled plastics market experienced significant destabilization in 2023, with recycled material prices falling by more than 50 per cent. This is mainly due to the increasing rate of low-cost recycled plastic imports from non-EU countries, which do not adopt circularity policies, use materials that do not meet European standards, and benefit from lower labour costs,” BCG illustrated, reporting Eurostat data showing that in 2022, the value of these imports (40 per cent of which come from China, Turkey, India, Indonesia, Egypt, and Vietnam) reached €39.4 billion, a 40 per cent growth over the past three years.

Moreover, according to Plastics Europe’s 2023 report, Europe’s share of global plastics production has dropped from 22 per cent in 2006 to 14 per cent in 2022, while China, North America, the Middle East and Africa account for 32 per cent, 17 per cent, and 9 per cent, respectively. “Without proper controls, therefore, the increase of recycled plastic imports from non-EU countries could destabilize the market,” BCG added. So, “it is crucial” that Europe continues its efforts “by increasing recycled content, incentivizing active collaboration, innovative policies, and adopting policy measures to support and accelerate this progress, such as adopting binding recycled content targets for imports as well and implementing verification and traceability mechanisms for recycled polymers. Just as market and fiscal incentives, including producer subsidies and reduced VAT rates for recycled products, are equally crucial,” BCG specified.