Europe’s Plastic Rules Reshape Supply Chains

Binding recycled-content targets are pushing firms to secure rPET and rPP, turning sustainability pledges into procurement strategy

19 Feb 2026

In Brussels, what began as an environmental ambition is becoming an industrial fact. The European Union’s recycled-content mandates for packaging are no longer a distant threat. They are reshaping supply chains across the plastics industry.

Under the EU’s Packaging and Packaging Waste Regulation, all packaging placed on the market must meet sustainability standards, including minimum levels of recycled content that vary by product and material. Beverage bottles are the most visible target. But the rules extend far beyond them. Together they create a clear, long-term signal: demand for recycled polymers will rise, whatever the price.

Analysts expect Europe to require millions of additional tonnes of recycled plastic each year before the decade ends. That looming gap between supply and regulation has set off a scramble. Investment in recycled polyethylene terephthalate (rPET) and recycled polypropylene (rPP) is rising. So is dealmaking, as firms seek to secure feedstock and protect margins before compliance deadlines bite.

Large producers are adjusting their strategies. Indorama Ventures is expanding global rPET capacity to prepare for European and similar rules elsewhere. Borealis is increasing its focus on high-quality recycled polypropylene for packaging and cars, aligning its portfolio with customers’ circular pledges. Across the sector, recycling is shifting from a side project to a core business line.

The change is as much commercial as environmental. Clear targets make it easier to justify capital spending. Manufacturers are negotiating multi-year supply agreements to lock in recycled volumes. Procurement teams now treat recycled resin as a strategic input, not a branding exercise.

The effects stretch beyond the bloc. Exporters serving the EU are upgrading certification systems and production standards to meet new requirements. European recyclers, meanwhile, call for strict enforcement to prevent cheaper, non-compliant imports undercutting them.

Obstacles remain. Energy costs are high, virgin resin prices volatile and advanced recycling technologies still scaling up. Yet policy direction is firm, and brand owners face growing pressure to show progress.

Europe’s rules will not solve the plastics problem on their own. But they are altering incentives. Firms that secure reliable feedstock and invest early in quality may find that regulation, often seen as a burden, offers a competitive edge.