EU Packaging Rules Force a Rethink on Recycling Investment

Tighter EU packaging rules are accelerating investment, partnerships, and capacity planning as firms prepare for stricter recyclability standards

15 Jan 2026

Europe’s packaging and plastics industry is preparing for a regulatory shift as new EU-wide rules on packaging and waste move closer to implementation, prompting companies to reassess investment plans and supply chains.

The Packaging and Packaging Waste Regulation will require all packaging sold in the EU to meet harmonised standards for recyclability and minimum recycled content. Although the rules are not yet fully in force, executives say their impact is already being felt. For an industry long accustomed to differing national regimes, the regulation offers clarity but also raises the bar on near-term compliance.

The policy change is influencing capital allocation across the sector. Packaging producers, materials suppliers and recyclers are examining potential bottlenecks, with access to high-quality recycled plastics emerging as a central concern as demand is expected to rise sharply.

Some companies have begun to act. Tetra Pak has increased efforts to expand recycling capacity for polyAl, a composite of paperboard and plastic used in cartons, in Europe, combining funding with support for collection and processing infrastructure. The aim, executives say, is to secure compliant materials early and reduce future regulatory risk.

Deal activity has so far been restrained, but interest in partnerships is growing. Advisers and industry analysts point to rising momentum behind joint ventures, selective acquisitions and long-term supply agreements, particularly in sorting and material recovery. As recycled content thresholds increase, control over capacity is becoming a strategic priority.

Waste and resource management groups are also stepping up investment. Veolia and peers have cited clearer EU targets as a trigger for new plants and upgrades to existing facilities. At the same time, packaging designers are working more closely with recyclers at the earliest stages of product development to ensure materials can be recovered at scale.

The pressure extends beyond manufacturers. Consumer goods groups and retailers face growing expectations to demonstrate compliance well ahead of enforcement. Shoppers are likely to encounter simpler, more recyclable packaging, even if costs rise in the short term as supply chains adjust.

Challenges remain, including the risk of shortages in recycled materials. Still, the direction of travel is clear. Companies that invest early and secure partnerships are positioning themselves for a more circular European packaging market.