Addressing the many challenges facing plastic recyclers requires a comprehensive slate of solutions, both within industry and from a legislative perspective, according to panelists during a session on the rapidly shifting trade landscape during the 2026 Plastics Recycling Conference in San Diego.
In North America, the well-known challenges include abundant cheap imported PET resin, a lack of clarity on the scope of the import issue, global oversupply of virgin PE and fragmented state-level regulations in the US.
Meanwhile, the EU’s newly implemented Packaging and Packaging Waste Regulation (PPWR) is often held up as the gold standard for reducing plastic waste. But this transition is far more nuanced, said panelist Fabrizio di Gregorio, technical director at industry association Plastics Recyclers Europe.
“Having nice targets in the legislation is not enough,” he said during the Feb. 24 discussion, adding that if legislators do not understand the markets and trading dynamics, eventually a loophole forms. “And today in Europe, we are living this loophole with recycling capacity shutting down instead of increasing.”
Europe’s emerging PCR content requirements have resulted in a flood of imported resin, di Gregorio said. The region has lost about 1 million tons of plastic recycling capacity in the uncompetitive environment, and he expects these conditions to continue in Europe for the next couple years, with “many more” plants closing that are already struggling.
Moderator Kate Bailey, senior policy director at the Association of Plastic Recyclers (APR), pointed out that recycled content targets in California have similarly been met with a flood of imports that displace domestic material, compounding existing structural issues. APR owns Resource Recycling, Inc., publisher of Plastics Recycling Update and organizer of the conference.
But establishing PCR content mandates is not the only way to increase circularity, di Gregorio said.
Panelist Nick Laneville, counsel at Hogan Lovells US LLP, agreed. “If you’re aware of the possible solutions that are available to you and you have a sense of the path forward, you can have success even in an environment that’s as volatile as this one.” He added that a number of measures are still available, but noted that any solution must be tailored to suit its purpose.
Laneville said this is the most volatile period in the history of trade, as buyers and sellers cope with unpredictable trade policy and shifting trade alliances.
One of the main contributing factors to this volatility is the ever-changing tariff landscape. “It’s hard to know what somebody’s going to pay if they bring product in tomorrow or the next day.”
While the US is structurally dependent on imports to meet PET requirements, the influx in the past two years of imports from Asia has made domestic recyclers unable to compete economically.
And because the US does not have separate trade codes for virgin and recycled plastics, quantifying the problem – the first step in finding a remedy – is impossible.
Quantify, identify, rectify
Determining the best defense requires data, the panelists agreed, both on the federal level and from stakeholders.
As outside counsel for APR, Laneville has helped pursue means to quantify the scope of the impact of imports in US. A 2025 proposal to differentiate trade codes was deemed “unadministrable,” but he and other stakeholders are working on another angle that US Customs could effectively enforce, and that data ultimately can inform US policy.
“Once we’ve diagnosed the issue by defining the countries that are potentially problematic with the products that are potentially problematic, then we can fit the potential remedy to that issue.”
Di Gregorio concurred, noting that the EU only recently provided differentiated codes for virgin and recycled resin – along with other measures in its winter package – to start providing much-needed insight.
The benefits of providing data extend to individual companies as well. When Ontario’s EPR scheme began in Canada, processors in the US balked at the information requirements, for fear of disclosing proprietary data, said Baltej Gill, vice president of data management and program delivery at Circular Materials. The producer responsibility organization (PRO) administers several provincial EPR programs in Canada.
The companies’ refusal to cooperate resulted in a loss of end markets, which ultimately decreased PCR demand, she said. But collaboration is key, and providing data is among the most important steps to create a widespread effect. “Until we get regulation at scale and volume, it will be hard for one small provincial program or five provincial programs to make a change.”
‘Stop the bleeding’
While the industry faces myriad issues, some are more pressing than others, the panelists said.
Bailey said that although the industry has “a fundamental lack of data, these things are going to take some time, and time feels like something we don’t have.”
Gill noted that reviewing contracting procedures is an immediate priority. And although in the longer term establishing consistent PCR demand is vital, “that’s not going to stop the bleeding that’s happening today.”
Panelist Sandeep Bangaru, vice president of Eastman’s circular platform, acknowledged that while the fragmented nature of North American EPR legislation poses challenges, “there are opportunities coming in and how PROs might think about incentivizing more regional supply.”
He pointed to French incentives that quickly spurred recycling investment, including bonuses for sourcing material locally. “The outcome remains to be seen, but the alternative is not having available infrastructure for plastic streams,” he said.
That said, Bangaru noted that in the next 10 years, the industry will shift from voluntary targets driving PCR demand to a policy-driven environment. Shut-down production can restart, he said. “It takes some time and some effort, but it’s certainly faster than building all new.”
The long game
APR’s Bailey noted that longer-term economic levers “can help level out that uncertainty over a long period of time, because probably this is not the last bump in the road we might have.”
In Canada, a key conversation for stakeholders is how to more evenly distribute the risks associated with recycling investment, Gill said.
Canada’s EPR programs are in various stages of development and implementation, with Alberta, Nova Scotia and Quebec starting in 2025, Ontario in 2023, still more provinces working toward implementation, and British Columbia’s packaging legislation implemented more than a decade ago.
In general EPR focuses on establishing a supply chain – collection, sorting and recycling of the material – to meet ambitious targets, including those for using the recycled material in a new product or packaging. “This means that our job as a PRO doesn’t stop at sorting and baling the material,” Gill said.
As for imports, Quebec’s EPR scheme emphasizes local sourcing. Gill said that although Ontario’s and Alberta’s programs do not yet have similar requirements, the EPR programs take a Canada-first approach to investment. “North America is second for us” on the priority list, she said.
And changes in trade flow that have shifted demand and impacted costs. “Avoiding any sort of international movement of plastics is going to be a big conversation shift for us as well,” including between the US and Canada, she said.
In general, the Canadian approach is meant to address longer-term structural issues, by considering shared risk and contract structures, rather than to solve a shorter-term crisis like geopolitical tensions, Gill said.
Circular Materials is developing the Material Access Program, to help guarantee demand for PCR by returning recycled material directly back to producers, to be used in new products and packaging to create a closed-loop supply chain. Producers requested the program, Gill said.
In addition to the emerging PCR mandates, large producers in particular have sustainability strategies that require stability in both pricing and availability of PCR, Gill said.
As an example, some Canadian recyclers are remaining viable despite the dire market conditions because they secured guaranteed offtake agreements or end markets, Gill said.
“The downside of that is when the market is picking up, they don’t reap the benefits. But I think they’ve taken that risk-and-reward model as well.”
And although material access will take time to mature, “if we can start with some guaranteed offtake, we just have to determine how to manage that and design” along with how to create stable pricing. Circular Materials is exploring how this sort of system can develop, and how to partner with other PROs, to create “kind of a stabilized regulation per se” that also complies with provincial regulations.
Bringing infrastructure to scale
In addition to keeping existing recycling businesses alive, providing predictable, reliable demand is vital to scale up recycling infrastructure, Bangaru said, noting that both mechanical and non-mechanical recycling capacity needs to grow “pretty dramatically in both the US and in Europe in a complementary way to get anywhere close to the rates and quality of PCR needed.”
Infrastructure investments are long-term and costly, so having a view of long-term demand is vital.
PCR requirements are not intended to simply “check a box” for regulations, Bangaru said, but rather “to create a demand-side pull for the supply-side requirements.” He said the right incentive and policy structures would help significantly work from the policy side, but he also commended some brand owners and value chains that are taking initiative to “move the whole system in the right direction.”
What gives you hope?
Despite the myriad issues facing the industry, there’s reason for hope, the panelists said. For example, Gill said, the Canadian PROs are working together, “because you can’t do the circular economy without a partnership across the board” to share information as well as diffuse the risk.
On the technical side, di Gregorio sees promise in the emerging global emphasis on design for recycling. Such standards as RecyClass’ Design for Recycling Guidelines in the EU and the APR Design Guide help to both create demand for recycled content and increase available PCR supply, which ultimately would make collection, sorting and recycling affordable, he said.
Although PCR content requirements and brand-owner claims are “nice to have,” he said, “the design is the driver for making the change effectively on the market.”
Bailey noted that perhaps the current market struggles would eventually serve as a landmark in recycling history. “Can we take this opportunity, in hitting bottom, to finally fix and stabilize things in the longer term through policy measures, through different contracting approaches with the PROs, through federal trade measures, through better design, all of these tools in our toolbox?”
