Declining competitiveness of Europe’s industries threatens the transition to a circular plastics economy
Recent data indicates a continued decline in European plastics manufacturing, while recycled plastics production has now dropped for the first time.
Plastics Europe’s latest data on the health of the European plastics system highlights a steeper-than-expected downturn in the production of plastics and, for the first time, in mechanically recycled plastics production in 2023 in Europe.
Compared to 2022, total EU plastics production saw a sharp decline of 8.3%, falling to 54 Mt, while production of mechanically recycled post-consumer plastics also dropped by 7.8%, reaching 7.1 Mt. These figures contrast with a 3.4% global increase in plastics production and mean that Europe’s share of the global market has further declined to 12% (Europe’s share of global plastics production has fallen from 14% in 2022 and 22% in 2006: “The Circular Economy for plastics – A European Analysis”, Plastics Europe 2024 report). While Europe has maintained a positive trade balance in value terms, in tonnage terms it became a net importer of plastics resins in 2022 and plastic finished goods in 2021, and exports of plastics resins fell by 25.4% between 2020 and 2023.
Marco ten Bruggencate, president of Plastics Europe, and president Dow EMEAI said the EU’s transformation to a circular plastics system is in “acute danger” from imported plastics which do not always meet EU standards.
“The hard truth is that we already see EU manufacturing plants being shut down, leading to offshoring of the industry, jobs and sustainable investments,” he noted. “The circularity transition will only be successful if policymakers urgently implement the framework conditions needed to regain our competitiveness and provide an attractive long-term perspective for circularity investments. The window of opportunity is narrow and the time for bold action is now.”
Virginia Janssens, managing director of Plastics Europe said to avoid a worrying slowdown in Europe’s transition there is a need for urgent measures to make investments in circular plastic production more attractive, reduce red tape for instance due to excessively long permitting procedures and create a level playing field with international competitors.
“Despite the challenges, we remain fully committed to progress towards the circularity and net zero ambitions of our ‘Plastics Transition’ roadmap,” Janssens added. “We now need EU and Member State policymakers to send an immediate and unambiguous message to investors and the market that they also remain committed to plastics manufacturing in Europe and our transition journey.”
Input and analysis from Plastics Europe’s members confirm that a sharp increase in imports of plastic resins and finished goods from regions with less stringent environmental standards, caused by global overcapacity in plastics production is undermining the business case for European plastics recycling and the transition to a circular plastics system. It also confirms that, like much of the EU’s industrial base, plastics manufacturers are currently facing high production costs driven by factors such as high energy and feedstock prices, persistent inflation and limited circular feedstock availability. This coincides with poor European growth and recession in some key European economies and sectors.
Despite Europe maintaining the highest share of circular plastics relative to its total production of 14.8%, the increase of 0.7% since 2022 signifies a decelerating trend and falls short of the growth required to meet the ambitions of the Plastics Transition roadmap. In addition to a decline in mechanical recycling production, only 0.12 Mt of chemically recycled plastic (source: Plastics Europe’s ambition is to reach 2.8 Mt chemically recycled plastics produced by 2030) was produced in Europe in 2023, while bio-based and bio-attributed plastics production slightly increased to reach 0.8 Mt.
