Falling EU Competitiveness Threatens Circular Plastics Transition

New data from Plastics Europe reveals a concerning trend: European plastics manufacturing has faced a steep decline, with total production dropping by 8.3% in 2023. For the first time, mechanically recycled plastics have also seen a 7.8% reduction. These challenges jeopardize Europe’s leadership in sustainable plastics and its transition to a circular economy.

The European plastics industry is facing significant headwinds, with a notable decline in both overall and recycled plastics production. According to Plastics Europe, the EU produced 54 million tonnes (Mt) of plastics in 2023, an 8.3% decrease compared to the previous year. Mechanically recycled plastics dropped to 7.1 Mt, reflecting a 7.8% reduction.

Meanwhile, global plastics production grew by 3.4%, leaving Europe’s share of the market at just 12%, down from 14% in 2022. This shift threatens the viability of a sector that supports over 1.5 million jobs and generates €365 billion in annual turnover.

Despite maintaining a positive trade balance in value terms, the EU became a net importer of plastics resins in 2022 and finished goods in 2021. Between 2020 and 2023, resin exports plummeted by 25.4%.

"The EU's transformation to a circular plastics system is in acute danger from imported plastics which do not always meet EU standards," said Marco ten Bruggencate, President of Plastics Europe. He emphasized the urgency of implementing policies to prevent offshoring and sustain investment in circularity.

Plastics Europe calls for immediate action to enhance the EU's competitiveness and support the transition to circular plastics. Proposed measures include:

• Mandatory recycled content targets for plastics.
• Simplified permitting processes for low-carbon industrial installations.
• Recognition of innovative recycling methods, including chemical recycling.
• Monitoring and certification schemes to ensure imports comply with EU standards.

Virginia Janssens, Managing Director of Plastics Europe, highlighted the need for streamlined regulations: "To avoid a worrying slowdown in Europe's transition we need urgent measures to make investments in circular plastic production more attractive."

Despite the challenges, Europe remains a leader in circular plastics, with 14.8% of total production classified as circular in 2023. However, this represents only a marginal increase of 0.7% from 2022. Bio-based plastics saw slight growth, reaching 0.8 Mt, while chemically recycled plastics remained minimal at 0.12 Mt.

Plastics Europe strongly supports the Draghi report's assessment of the "untapped potential for circularity." As Ten Bruggencate warned, "The window of opportunity is narrow and the time for bold action is now."