Europe’s €8B Gamble on Chemical Recycling

Plastics Europe commits €8B to chemical recycling, chasing EU mandates and a steadier supply of high quality recycled plastics 

16 Feb 2026

Europe’s plastics industry has decided it cannot wait.

Facing tighter rules and rising pressure from global brands, leading producers have pledged €8 billion to expand chemical recycling capacity by 2030. The commitment, announced by Plastics Europe, more than triples earlier investment plans and signals a sharp change in strategy.

At the heart of the shift is the EU’s Packaging and Packaging Waste Regulation, or PPWR. The law requires more recycled content in plastic packaging, pushing companies to secure reliable supplies of high quality recycled material. Mechanical recycling, long the workhorse of the sector, cannot always meet the performance standards demanded by food packaging and consumer goods.

Chemical recycling promises to fill that gap.

Instead of simply melting plastic down, the process breaks waste into its molecular components. The result can be near virgin polymers suitable for food grade packaging and other high performance uses. For brands under pressure to meet climate pledges, that distinction matters.

Plastics Europe members say they aim to produce 3.4 million metric tons of chemically recycled plastics each year by the end of the decade. Hitting that mark will take more than cash. Companies are calling for clear certification systems and harmonized rules under PPWR to reduce regulatory risk and unlock long term investment.

Some firms are already moving. BASF and Covestro have begun feeding recycled inputs into existing production lines. Early adopters see an opportunity to secure waste streams, lock in technology partners, and stay ahead of compliance deadlines.

The effects could ripple well beyond petrochemical plants. Waste management companies may find new value in plastics once destined for landfill or incineration. Consumer brands could gain steadier access to certified recycled material.

Still, the hurdles are real. Chemical recycling plants are capital intensive, and steady waste supply is not guaranteed. Questions also linger over cost competitiveness and scale.

The next few years will test whether ambition matches execution. If Europe can build infrastructure quickly and provide regulatory clarity, it may anchor a new chapter in circular plastics. What once seemed experimental is edging toward the mainstream.