Plastics Europe has published new data for the year 2023 that show a marked drop in European plastics manufacturing and a decline in recycled plastics - in particular, mechanically recycled plastics - production for the first time.
Compared to 2022, EU plastics production plunged 8.3% to a total of 54 million tonnes. The production of mechanically recycled post-consumer plastics decreased by 7.8%, to 7.1 million tonnes. By contrast, global plastics production rose by 3.4%, which means Europe’s global market share has shrunk further, to 12%. Although Europe maintains a positive trade balance in value, it became a net importer of plastic resins and finished goods, with resin exports dropping 25.4% from 2020 to 2023.
Deteriorating competitiveness is a threat to the EU's circular plastics ambitions. Plastics are vital for Europe's economy, supporting industries like healthcare, automotive, and packaging. The value chain, comprising over 1.5 million jobs across 51,700 companies and generating over €365 billion in 2023, risks losing its global leadership in sustainable plastics without a robust competitive framework.
Marco ten Bruggencate, president of Plastics Europe and president of Dow EMEAI, warned: “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. 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.”
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. Challenging as this situation is, it is compounded by the high energy and production costs, inflation, and limited circular feedstock availability that Europe's plastics manufacturers are currently facing, together with poor European growth and recession in some key European economies and sectors.
A supportive EU policy and regulatory framework should include ambitious mandatory recycled content targets, acceptance of innovative recycling methods -mass balance and chemical recycling - as well as simplified permitting for low-carbon circular industrial installations, and monitoring and certification schemes to ensure that imports meet EU standards. Fiscal and economic measures should be put in place to make circular plastics production in Europe competitive.
Despite leading with 14.8% circular plastics relative to total production, Europe's growth has slowed to 0.7% since 2022, falling short of 'Plastics Transition' roadmap targets. In addition to a decline in mechanical recycling production, only 0.12 Mt of chemically recycled plastic was produced in Europe in 2023, while bio-based and bio-attributed plastics production slightly increased to reach 0.8 Mt.
“To avoid a worrying slowdown in Europe’s transition we need 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 our international competitors,” said Virginia Janssens, managing director of Plastics Europe. “Despite the challenges, we remain fully committed to progress towards the circularity and net zero ambitions of our ‘Plastics Transition’ roadmap. 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.”
Plastics Europe welcomes the Draghi report on competitiveness and its acknowledgement of the potential of circularity. The association is also encouraged by Ursula von der Leyen’s proposal for a new industry-focused Green Deal following the Antwerp Declaration.