EU IAA Law: Why a ‘Recycled in Europe’ Mandate is Needed

Brussels – The European Union is poised to implement new regulations compelling increased plastic recycling within its borders, a move expected to reshape global plastic supply chains and significantly increase demand for recycled plastics. The forthcoming legislation, part of the broader Clean Industrial Deal, aims to incentivize the recycling of European plastic waste within Europe, rather than exporting it for processing.

The push for greater self-sufficiency in plastic recycling comes as the EU grapples with mounting plastic waste and seeks to establish a more robust circular economy. According to a recent study by ICIS and the China Petroleum and Chemical Industry Federation (CPCIF), the EU’s Packaging and Packaging Waste Regulation (PPWR), which came into effect in February 2025, is already driving strategies worldwide. The PPWR mandates that all packaging in the EU must be recyclable or reusable by 2030, with binding minimum recycled content targets increasing through 2040.

“This study shows that EU law for the circular economy is no longer a regional environmental policy, but is developing into a global market force that shapes industrial strategies and supply chains worldwide,” said Helen McGeough, Global Analyst Team Lead for Plastic Recycling at ICIS. “A forward-looking reaction from China could play a key role in reducing the gap between national and international standards and accelerating the global transition to a circular economy.”

The regulations stipulate that plastic packaging will need to contain between 10 and 35 percent recycled content by 2030, rising to 25 to 65 percent by 2040, depending on the product group. This increased demand is projected to require over 11 million tons of recycled plastic in Europe by 2040 – a volume that current supply levels are unlikely to meet, according to the ICIS/CPCIF study.

The move to keep plastic waste within the EU is also driven by a forthcoming ban on the export of plastic waste to non-OECD countries, scheduled to take effect in 2026. Previously, significant volumes of European plastic waste were shipped to Asia, often with detrimental environmental and social consequences.

Ursula von der Leyen, President of the European Commission, emphasized the importance of developing robust recycling chains within Europe, stating that “the future of clean technologies lies in Europe. But for that to happen, we must also ensure that our industry here in Europe has the raw materials it needs. And the only answer here is to create a genuine circular economy.”

Even as mechanical recycling – shredding and reprocessing plastic – remains a key component of the EU’s strategy, both mechanical and chemical recycling methods are being promoted. Chemical recycling, which breaks down plastic into its constituent molecules, is seen as a potential solution for processing more complex plastic waste streams. However, concerns remain about the cost-effectiveness and environmental impact of chemical recycling technologies.

The EU is aiming for a 55 percent recycling rate for plastic packaging by 2030, up from approximately 40 percent in 2022. The Circular Economy Act, planned for release in the fourth quarter of 2026, is expected to further solidify these goals and establish a framework for increasing the proportion of circular materials from the current 11.8 percent to 24 percent by 2030.

Despite these ambitious targets, the overall volume of plastic waste generated globally remains a significant challenge. Experts caution that recycling alone will not be sufficient to address the problem, and that reducing plastic consumption and developing alternative materials will also be crucial.