Recycling capacity decline – European plastics recycling industry faces unprecedented collapse as capacity shrinks, production falls and urgent policy intervention becomes crucial to salvage circular economy foundations 14-11-2025
Recycling capacity decline – Introduction
The plastics recycling sector in Europe is undergoing a deeply troubling downturn. According to Plastics Recyclers Europe (PRE) the industry recorded its sharpest decline in 2024. This decline threatens the region’s circular economy and raises serious questions about industrial resilience and future sustainability.
Capacity and output losses
In 2024 Europe’s total installed plastics recycling capacity stood at 13.5 million tonnes—a level that remains well below the 6 % annual growth required under the upcoming Packaging and Packaging Waste Regulation (PPWR). Plastics Recyclers Europe+1 Over the year, recycling facilities with a combined annual capacity of around 300 kilotonnes were closed—representing the largest contraction ever recorded by PRE. Recycling capacity decline
Preliminary 2025 figures suggest the crisis is deepening. Facility closures are up by 50 %, and nearly one million tonnes of capacity loss are projected across just three years.
Materials and regional impact
The hardest-hit materials were polyolefin films and polyethylene terephthalate (PET), each accounting for roughly 25 % of capacity closures between 2023 and 2024. Regionally, the Netherlands and the United Kingdom together accounted for about half of the total capacity lost. UK facility closures extended into 2025 with major plants shutting down. letsrecycle.com
Financial and production metrics
For the first time in over a decade both input volumes and recyclate output declined year-on-year. Recyclate production dipped from 7.7 million tonnes in 2023 to approximately 7.5 million tonnes in 2024—driven by lower demand, reduced utilisation, and widespread closures. Recycling capacity decline
Similarly, industry turnover fell for the second straight year, falling from €9.1 billion in 2023 to €8.6 billion in 2024—a 5.5 % drop.
Underlying pressures
The downturn stems from multiple pressures. Recyclers are wrestling with elevated production and energy costs, weakening demand for recyclates, and a surge in low-priced, unregulated plastic imports that undermine domestic competitiveness. Plastics Recyclers Europe+1 These forces create a precarious business environment for the sector and erode its ability to expand capacity in line with regulatory targets. Recycling capacity decline
Call for action
Plastics Recyclers Europe has urged policymakers to act urgently. Their priority action list includes:
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Enforcing fair and transparent market regulations across the EU.
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Implementing stronger controls on imports of non-compliant recycled plastics.
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Reducing energy and production costs for recyclers. Recycling capacity decline
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Harmonising reporting and certification systems via independent third-party verification. Plastics Recyclers Europe
PRE President Ton Emans emphasised that the sector must stand united: the time to act is now, to protect jobs, businesses and Europe’s environmental and technological progress. letsrecycle.com+1
Implications for the circular economy
This decline is more than a downturn in one sector—it signals a threat to the broader circular economy. Plastics recycling plays a vital role in closing material loops, reducing reliance on virgin feedstocks and supporting sustainable manufacturing. With the sector now contracting, Europe’s ability to meet ambitious recycling and reuse targets becomes increasingly uncertain.
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What’s next for stakeholders
For industry stakeholders, this is a critical moment. Manufacturers, recyclers, policymakers and investors must acknowledge the scale and severity of the challenge. Without swift intervention, further closures and capacity loss could become inevitable.
Companies should monitor how policy evolves around the PPWR, energy cost relief measures, and import controls. Recyclers may need to explore alternative business models, diversification, or higher-value applications of recyclates to remain viable.
Governments and regulators must recognise that plastics recycling is not a marginal activity—it underpins industrial resilience, sustainability goals and job growth. Strategic support is required if the sector is to recover and grow.
