As plastic recyclers struggle to navigate a persistent downcycle, war-related tailwinds are helping reframe the narrative surrounding PCR adoption, stakeholders said during Pack Expo this week in Chicago.
Particularly for polyolefins, abundant cheap virgin resin has presented a major roadblock for recyclers, whose PCR resin is typically priced at a premium to virgin material. Amid uncertainty surrounding extended producer responsibility (EPR) laws for packaging and PCR content mandates, as well as a patchwork of state regulations and shifting goalposts for brand commitments, recyclers have struggled to compete.
Rapid price spikes for virgin PE and PP during the onset of the US war in Iran gave recycled commodity values a lift in early summer. But the longer-term takeaway is that end users are seeing the value of having reliable domestic feedstock at the ready, executives from Dow and Orbis said during interviews at the show.
Michigan-headquartered Dow is the world’s largest producer of polyethylene. Wisconsin-headquartered Orbis produces reusable packaging products, such as pallets, racks and containers, made of HDPE and PP.
Holly Kennedy, senior business sustainability manager at Dow, said brands that were already working on qualifying PCR realized the added value, beyond compliance with laws set to take effect starting in 2027. Some customers have said the supply constraints and related pricing volatility have changed how they think about procurement, she added.
And while sustainability is important for procurement teams, their top priority is supply security, she said. “So they’re like, ‘Wait, this is another lever that I can pull to make sure that we have material available and we have product on the shelf for our customers.'”
Orbis’ Lynn Hediger, vice president of manufacturing and product engineering, said geopolitical developments were encouraging interest in localizing supply and production. Record-high diesel fuel prices have made transportation prohibitively expensive, while tariffs as high as 50% have sent some prices soaring, particularly for metal products.
“It’s extremely difficult to bring plastic-based products or steel-based fabricated products like racks into the United States” because of the tariffs, he said. So customers are looking inward for economic reasons, “but I think they’re also realizing the length of the supply chain is a little bit easier if it’s not spread out all over the world.”
Policy as a demand pull
While the EU’s Packaging and Packaging Waste Regulation (PPWR) seems a world away, companies operating in Europe are forcing what Hediger called a “global acceptance” of the sweeping program.
Orbis is seeing demand for consistent packaging systems between North American and European operations, particularly with CPG, beverage and other consumer-facing companies. “They want to be able to tell that story globally, and so they’re just forcing those decisions here,” Hediger said.
In the US, California and six other states are implementing packaging EPR laws, and several states, including California, New Jersey and Washington, have PCR content mandates.
In some ways, Hediger said, states are “paying attention to the regulations that are coming out in Europe and adopting a lot of the same features – maybe not called exactly the same, but the spirit of it is very similar. So you do see that that influence is coming.”
And similar to the PPWR effect, when an economy as large as California or New Jersey adopts legislation, it can drive overall demand in the interest of simplicity and efficiency, he said.
For Dow, the three most important aspects of effective EPR are providing financing for managing complex waste streams like packaging, mandating recycled content and addressing non-mechanical recycling processes, said Adwoa Coleman, senior sustainability manager of ecosystems and EPR for Dow North America.
While EPR policy focuses primarily on increasing collection and processing of used packaging, providing feedstock supply, “we need the other side of the equation to work as well,” Coleman said. “So demand that would be ensured by mandates that actually require producers to use PCR is a big deal,” as with the New Jersey PCR requirement.
Dow would “broadly like to see more PCR mandates, more geographies, more application spaces, and just more use where practical, of course, from a technical perspective,” she said.
Dow also believes that to hit the recycling rates set by EPR laws, policy should be technology-agnostic. “It’s very clear that mechanical recycling alone can’t get us to those numbers, and that we need complementary technologies,” Coleman said, such as chemical recycling. The company also wants mass balance accounting methods to accommodate non-mechanical recycling.
Dow bought US mechanical plastic film recycler Circulus in 2024 and previously announced investments and offtake agreements in chemical recycling in Europe and North America. But in August 2025 the company canceled a planned chemical recycling project in Böhlen, Germany.
Coleman also pointed out that Circular Action Alliance (CAA) “has been very bullish about incentivizing the use of PCR.” The producer responsibility organization (PRO) administers packaging EPR programs in six states.
“I think there is a good buzz in the industry, a lot of excitement around what that could do for the market,” Coleman said.
The New Jersey whiplash
Amid the patchwork of new state regulations, as well as lawsuits challenging the legal basis of EPR laws, uncertainty remains for recycling stakeholders.
New Jersey’s three-year extension of exemptions to its mandates for some food-contact applications is the latest example of uncertainty and upheaval. “As you can imagine, folks had built up significant capacity,” Coleman said. She added that many companies had implemented innovative solutions on the expectation of the regulations taking full effect. “So the shift definitely has created a disruption within the plans for the industry.”
Coleman noted that Dow understands the implications of PCR mandates and other regulations for affected companies, and that in some scenarios, delays may occur. But the company feels there should be more open dialogue to ensure that the public and private sectors work in tandem to avoid major disruptions, she said.
Designing for fees
“Honestly, EPR is going to drive packaging design,” Coleman said. “Whether for compliance or even just to reduce costs, it’s going to happen.” As such, Dow continues its work on designing for recycling despite implementation delays and other headwinds such as EPR lawsuits.
“We’re thinking through levers like lightweighting and downgauging. We know that because it’s based on weight, those will help to reduce the fees, but they won’t create a big step change,” Coleman said. “So the next thing that we’re talking about in that case is designing for recycling,” in particular switching from multi-material formats to mono-material.
One-size policy does not fit all
As US policy has emerged, so too has the theme of creating regulations that consider packaging substrates individually rather than as a plastics monolith.
“One of the frustrations that we have being a reusable packaging company is a lot of times the spirit of the regulation ends up affecting us, even though we’re not the target audience,” Hediger said, noting that policy typically seeks to address single-use plastics, rather than products designed to be reused many times.
Speaking more broadly, Dow’s Coleman said EPR “is a great policy instrument if it’s fair, if it’s flexible, and if it actually fixes the problem or accomplishes what it’s meant to.”
