The European Union is reconsidering how recycled plastic content is calculated in beverage bottles, a move that could significantly reshape compliance with the bloc’s circular economy rules. A new proposal from the European Commission would allow companies to count chemically recycled plastics toward mandatory recycled content targets, even if those materials are blended with virgin plastic. Supporters argue the change could unlock investment and stabilise Europe’s struggling recycling sector. Critics warn it risks weakening environmental standards and confusing consumers.

Rethinking What Counts as Recycled Plastic

Under current EU rules, plastic beverage bottles must contain at least 25 percent recycled material, rising to 30 percent by 2030. Until now, only mechanically recycled plastics, produced by grinding and reprocessing waste, have counted toward these targets. The Commission’s new proposal would expand eligibility to include chemical recycling, a technology that breaks plastic waste down into its chemical building blocks to produce new polymers and other by products. Chemical recycling often relies on a mix of consumer waste and virgin fossil based plastics as feedstock. This has made it controversial among environmental groups and mechanical recyclers, who argue that allowing it to qualify as recycled content could amount to greenwashing. Despite these concerns, the Commission has said the change would create new opportunities for chemical recyclers and provide legal certainty needed to attract investment across Europe.

The Mass Balance Method and Its Implications

At the heart of the proposal is the use of the mass balance approach. Under this method, manufacturers would calculate how much consumer plastic waste enters their overall production system and then allocate that recycled content across different products, rather than tracing it directly into each individual bottle. In practice, this means a company could label a plastic bottle as containing 30 percent recycled material even if that specific bottle contains less, as long as the average across its production meets the requirement. Fuels are excluded from this flexibility, but most other outputs would be eligible. Supporters say mass balance is essential for scaling chemical recycling, which operates across complex production systems. Critics counter that it dilutes transparency and undermines the credibility of recycled content claims made to consumers.

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Economic Pressures Driving the Shift

The Commission has framed the proposal as a response to mounting economic stress within Europe’s plastics recycling sector. According to the policy package, reduced capacity utilisation, financial losses, and even bankruptcies are already affecting recyclers. Expanding the definition of recycled content is seen as a way to stimulate demand, support investment, and help Europe compete globally as it transitions toward a circular economy. This is not the first attempt to push the reform. A similar proposal failed to gain backing from Members of the European Parliament in 2024. Since then, the Commission has adjusted its approach and is now seeking approval from member states, with a vote expected in the coming year.

Industry Support and Environmental Pushback

Chemical industry players have broadly welcomed the proposal. Companies such as Vopak have argued that meeting Europe’s plastic waste challenge requires all available technologies, including chemical recycling, and that excluding it would slow progress toward climate and circularity goals. Mechanical recyclers and environmental organisations remain unconvinced. They argue that blending virgin plastic into chemically recycled feedstock blurs the line between recycling and new plastic production, potentially allowing higher fossil fuel use to be masked behind recycled content labels. French recycling firm Veolia has criticised the Commission’s wider response as insufficient, warning that the economic, industrial, and social stakes for European recyclers are too high to ignore. From their perspective, allowing imports of recycled plastic from outside the EU to count toward obligations further weakens the case for domestic recycling investment.

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Trade Controls and Market Oversight

Alongside the recycling rule changes, the Commission has proposed new trade measures to better monitor imports of virgin and recycled plastics. New customs codes would distinguish between the two, and recycling plants both inside and outside the EU could be audited to ensure compliance with EU standards. Officials have said these steps are intended to improve the business case for recycled plastics within the bloc. However, some industry players argue that without stronger protections against cheap imports, European recyclers will continue to struggle.

End of Waste Rules and the Circular Economy Debate

The Commission is also seeking feedback on new end of waste criteria for plastics. These standards would determine when recycled plastics are no longer legally classified as waste and can circulate freely across all 27 member states. If adopted, the criteria could simplify cross border trade in recycled materials and support scale across the single market. Together, the measures reflect a broader tension within EU climate and industrial policy. On one hand, Brussels wants to accelerate investment and shore up a struggling recycling sector. On the other, it faces growing scrutiny over whether flexibility in accounting methods undermines the environmental integrity of its circular economy goals. As member states prepare to vote, the outcome will signal how far the EU is willing to bend its sustainability rules to address economic pressures, and whether chemical recycling will become a central pillar of Europe’s plastics strategy or remain a deeply contested compromise.

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