For manufacturers represented by the Plastics Europe, the situation appears unequivocal. “It is deeply concerning that, just when Europe should be accelerating the transition to a circular economy, we see a dramatic slowdown,” warns Rob Ingram, Rob Ingram, President of Plastics Europe and CEO of Ineos Olefins & Polymers Europe. “Unless this highly damaging trend is reversed, Europe will not be able to meet its climate ambitions,” he adds.

Transition at a standstill

On Tuesday, May 19, the organization, whose members include BASF, Borealis, ExxonMobil, Ineos, LyondellBasell, Sabic Europe, and TotalEnergies, published a report on the so-called "The Circular Economy for Plastics," which encompasses all plastics recycled (mechanically, chemically, or through enzymatic processes) or obtained from bio-based resources.

According to Plastics Europe, total European production [1] of “circular plastics” reached 8.7 million tonnes in 2024 — the latest year for which data are available — representing 15.8% of overall plastics output. Although this is the highest share worldwide, it largely reflects the weakness of fossil-based plastics production, which “declined by 8.3% between 2022 and 2024 to 43.4 million tonnes,” the organization notes.

European difficulties are largely due to fierce competition from very low-cost virgin and recycled plastic produced in Asia.

At the European level, the plastic recycling rate has risen to 29.6%, according to Plastics Europe. But, in other words, this means that “more than 70% of collected plastic waste is still directed to incineration (16.0 Mt, or 48.9%) and landfill (7.0 Mt, or 21.5%).”

Oil shock

The current conflict in the Middle East has underscored “how vulnerable Europe is to shocks linked to fossil fuels, and that a robust European circular plastics economy is not a ‘bonus’ but a non-negotiable imperative,” stresses Virginia Janssens, Director General of Plastics Europe.

Traditional plastics such as polyethylene are derived directly from petroleum, which is refined into naphtha and then processed into ethylene. The current war’s impact is therefore twofold: first, Gulf countries are typically major exporters of polyethylene; second, Asian petrochemical producers — among the world’s largest — are facing difficulties securing naphtha supplies.

Today’s situation thus contrasts sharply with that described in the Plastics Europe report, when overcapacity led to relatively low prices. For the plastics processing industry, the shock has been severe.

"The increase was very sharp," Christophe Desbrosses, president of the Association of Economic Actors of the Plastics Valley (AEPV), in France, explained to AFP in mid-April. "For some materials, prices have almost doubled."

Nevertheless, existing production capacity and the availability of alternatives offer some reassurance about the risk of shortages, according to Jean-Pierre Masson, Managing Director of consulting firm Inverto France, a subsidiary of the Boston Consulting Group. He points to “increasing plastic exports” in U.S. customs data and notes that the United States, as the world’s leading oil producer, could “position itself as an alternative source of virgin plastics.”

Can recycling benefit from this?

The current situation therefore appears more favourable for Europe’s recycling sector. A windfall effect may emerge, as “it is now cheaper to buy recycled than virgin” materials, and “2026 should be a record year for plastic recycling in Europe,” argues Jean-Yves Daclin, Managing Director of Plastics Europe for France.

“Since April, we have observed a cyclical uptick in demand for recycled plastics,” along with “the return of some customers to our solutions after several months of increased reliance on virgin materials,” according to French environmental services giant Veolia.

However, “this situation should not obscure the structural crisis facing the European recycling sector,” the company cautions. Meanwhile, Plastics Europe maintains that the competitiveness challenges of European production remain unresolved, particularly due to high energy costs.

At the end of 2025, the European Union unveiled proposals to help the European plastic recycling sector, but the plan was perceived as insufficient by the sector.