EU Rolls Out Pilot Actions to Stabilise Plastic Recycling and Speed Circular Economy Shift

The European Commission has unveiled a package of pilot measures aimed at reinforcing Europe’s plastic recycling industry and accelerating the transition to a circular economy, as rising costs and fragmented markets threaten investment and capacity across the sector, according to Commission statements and policy briefings.

Brussels framed the initiative as both an environmental and industrial response, arguing that more efficient plastics recycling can strengthen the Single Market, improve economic security and reduce dependence on imported raw materials. The move reflects recent economic assessments, including the Draghi report, which identifies circularity and resource efficiency as central to Europe’s industrial competitiveness.

According to reports, the Commission is adopting a two-step strategy. The newly announced measures focus on short-term actions where pressure on recyclers is most acute, particularly in plastics. A broader Circular Economy Act is planned for 2026, with horizontal rules intended to improve the functioning of the Single Market for secondary raw materials.

Research by the Commission’s Joint Research Centre highlights the potential upside. Its analysis shows that circular solutions could cut climate-related emissions from the plastics sector by around 45% by 2050, lower energy-related emissions and improve the EU’s plastics trade balance by about €18 billion a year. Analysts say these projections are increasingly influential as policymakers weigh climate goals against concerns over industrial decline.

Despite policy ambition, progress has lagged. In 2024, recycled materials accounted for just over 12% of total material use in the EU, only marginally higher than a decade earlier. Industry groups point to high energy prices, volatile virgin plastic markets and competition from lower-cost imports as key factors squeezing recyclers’ margins and reducing capacity utilisation.

A central element of the package targets market fragmentation. The Commission has proposed an implementing act to establish EU-wide end-of-waste criteria for plastics under the Waste Framework Directive. The rules would define when recycled plastics cease to be classified as waste, allowing them to circulate more freely across borders. Officials say this could cut administrative burdens, particularly for small and medium-sized recyclers, and help ensure a more stable supply of high-quality recycled material. The draft is open for public feedback until late January 2026.

Another implementing act, submitted for a vote by Member States, would clarify how recycled content in PET single-use beverage bottles is calculated under the Single-Use Plastics Directive. The proposal would allow certain chemically recycled plastics to count toward EU recycling targets under specific conditions, alongside mechanical recycling. Observers note that clearer rules could reduce legal uncertainty and unlock delayed investment in chemical recycling projects.

The Commission also plans to relaunch the Circular Plastics Alliance, strengthening it as a platform for coordination across the plastics value chain. The revamped alliance is expected to focus on demand for recyclates, investment bottlenecks and cost competitiveness, bringing together industry, Member States and EU institutions.

To address concerns over unfair competition, Brussels said it will introduce separate customs codes for virgin and recycled plastics, giving customs and market surveillance authorities clearer tools to enforce EU rules on imports. The Commission will also step up monitoring of EU and global plastics markets, with the findings feeding into possible trade measures. A review of these actions is scheduled for 2026.

On financing, the Commission said it will expand support for circular projects through cooperation with national promotional banks and the European Investment Bank. A pilot Competitiveness Coordination Tool will support Trans-Regional Circularity Hubs, designed to scale up recycling and circular practices through cross-border cooperation and regional specialisation.

At the same time, the Commission has launched a public consultation and call for evidence to evaluate the impact of the Single-Use Plastics Directive. The review will assess how effectively the law has reduced plastic pollution and health risks while supporting innovation and circular business models. Submissions are open until mid-March 2026.

Officials say the pilot measures deliver on commitments made by Commission President Ursula von der Leyen to accelerate the circular economy agenda, while laying the groundwork for the more comprehensive Circular Economy Act expected by the end of 2026.

Source: EU Commission

SUNSHINE Spotlight: The Commission’s pilot package seeks to stabilise Europe’s plastic recycling sector now, while preparing deeper market reforms through a Circular Economy Act in 2026.