Plastic recycling is contracting when it needs to grow

The plastics recycling industry is urging regulatory reform to reverse its contraction across Europe and the US. Over the past few years there’s been a steady stream of closures, all rooted in what’s being described as market failure.

While there are different policy impacts in different jurisdictions, recyclers say they’re caught in a perfect storm: large capacity expansion in China means an influx of virgin plastic that’s much cheaper than recycled material. That price differential has lowered demand for recycled materials, which has also been impacted by policy uncertainty as the sector moves from voluntary to mandated targets.