BP Consultants has prepared a comprehensive status report on behalf of Interzero on the increasing PCR shortage under the requirements of the PPWR. We present the key findings in this article. We highlight the central role of PCR (post-consumer recyclates) in the EU agenda, provide a status update on the current use of recyclates, examine the causes of the PCR shortage, discuss mechanical and chemical recycling, and offer specific recommendations for action for brand owners and the plastics industry. We also provide links to our white paper for Interzero and our presentation on the topic at the recent Future Resources Conference.
Basis of the report
The comprehensive status report is based on two key studies by BP Consultants:
- The modeling of a material flow scenario for plastic packaging in 2030 and
- a qualitative stakeholder survey in the form of expert interviews to determine a well-founded picture of opinions and sentiments regarding the current
and future PCR availability. The survey included brand owners, plastic packaging manufacturers, experts from the recycling industry, and NGOs.
Executive Summary
The new Packaging and Packaging Waste Regulation (PPWR) requires all distributors of packaging in the EU to use defined minimum proportions of post-consumer recycled materials from 2030 onwards. However, high-quality PCR is already scarce and expensive today. The fact is:
- Mechanically recycled material is barely sufficient to meet existing targets, and chemical recycling is still in its infancy.
- The existing gap is growing. Even by optimistic estimates, there will be a shortfall of over 1 million tons of PCR in 2030 to meet the PPWR requirements.
- Playing for time and waiting for omnibus regulations will not be a solution. 80 per cent of market participants expect the PPWR recycling rates to be implemented unchanged.
The consequence: action is now imperative.
- Without early investment in recyclable design, partnerships, and procurement, there is a risk of supply bottlenecks, price spikes, and compliance risks.
- Companies that want to ensure circular packaging solutions by 2030 must set a strategic course now – from design for recycling to direct access to PCR sources.
The central role of PCR
The Packaging and Packaging Waste Regulation (PPWR), which came into force at the beginning of 2025, requires all packaging distributors in the EU to use defined minimum proportions of post-consumer recycled material (PCR) from 2030 onwards. The use of PCR is a central aspect of the regulation.
The PPWR, in turn, is a central component of the European Green Deal and the EU Circular Economy Action Plan. Both pursue the goal of permanently decoupling resource consumption and economic growth. Packaging, especially plastic packaging, is at the center of this because it offers great potential for conserving resources, reducing CO₂ emissions, and securing raw materials.
Where we stand today in terms of recycled material use
The market for PCR materials is already tight today. This is particularly true for single-type, food-grade plastics.
- More than two-thirds of market participants rate the current availability of mechanical PCR as “scarce” or “insufficient.”
- Even optimistic calculation models show that by 2030, more PCR will be needed for packaging in Europe than will be available.
By 2030, there will be a shortfall of over 1 million tons of PCR. This corresponds to the output of ten new large-scale plants. The situation is particularly critical for:
- polypropylene (PP): high demand in food and cosmetics, but low supply of food contact material,
- LDPE & multilayer from household waste streams: technically difficult to recycle, hardly any high-quality PCR available,
- food-grade PCR (all polymers): under-regulated, under-certified, under-produced
Causes of the PCR shortage
The shortage of PCR is not a temporary phenomenon, but the result of structural bottlenecks along the entire value chain.
- Design barriers: Many packaging materials consist of multilayers, colors, or additives that make recycling technically and/or economically difficult.
- Sorting quality: Not all packaging is disposed of correctly or can be reliably separated by type.
- Limited recycling capacities: The supply is particularly limited for food-grade materials.
- Price competition with virgin materials: Virgin plastics are often cheaper than PCR due to volatile oil prices.
- Cross-industry competition: The automotive, construction, as well as electrical and electronics industries are also increasingly turning to PCR. As a result, recyclates from used packaging are more often used in other target markets and are then not available for packaging.
The shortage is even more pronounced in contact-sensitive applications that require a special quality of recycled material.
Digression: Mechanical and chemical recycling
Both mechanical and chemical recycling of plastics play a central role in achieving the PPWR targets. The processes differ fundamentally in terms of technology, market maturity, range of applications, and availability.
Mechanical recycling
- This is currently the dominant process for producing PCR. It has been established for decades and is the mainstay of the plastics recycling industry.
- It is based on the sorting, processing, and melting of plastic waste.
- Its strengths include efficiency, cost-effectiveness, and proven experience.
- Its limitations include quality losses and limited suitability for contact-sensitive applications.
Chemical recycling (e.g., pyrolysis, depolymerization)
- Technologically capable of breaking down even complex plastic structures into their basic molecular components, which can theoretically be reprocessed like virgin material.
- Has the potential to tap into new fractions such as multilayers and to produce materials with virgin quality, even for food contact.
- Depending on the technology, it has high energy requirements and/or a high Co2-footprint, is often still in the development or pilot phase, and is not currently included in the recycling rate in Germany.
- Despite large pilot projects, 88 percent of the stakeholders we surveyed do not expect chemically recycled plastics to account for a substantially higher proportion of recycled plastics by 2030.
What needs to be done: Brand owners
The PCR quotas under the PPWR have been set and are likely to remain in place. Despite all the challenges, the packaging value chain should therefore see them as a driver and catalyst for circular transformation – and tackle them head-on.
Because one thing is also clear: the challenge is not only technical, but above all economic in nature. Those who do not position themselves now will pay significantly more from 2030 onwards – or fail to meet the quota.
Opportunities and risks for brand manufacturers
The central guideline for brand manufacturers should be: ensure compliance and leverage differentiation. It is important to take advantage of the strategic turning point in the packaging industry.
- Compliance risk: Failure to meet legal quotas will result in fines and damage to reputation.
- Supply risk: Lack of access to PCR jeopardizes production security and delivery capability.
- Cost risk: Resource scarcity increases price volatility and margin pressure.
- Competitive advantage: Early action secures price advantages and strengthens brand positioning.
What to do: Plastics industry
Given the required PCR quotas and the simultaneous shortage of suitable PCR, the plastics industry runs the risk of customers switching to innovative fiber-based solutions. However, there are also challenges on the fiber side, for example with regard to necessary barriers. So, the question is: Who can do their homework first, plastics or paper?
Investments in plastic recycling plants can secure future viability here. Innovation is also an important factor, because the circular economy is not least a competition between different plastics.
Further details and information
For further information and insights into the results of our status report and the qualitative stakeholder survey, we offer you the white paper published by Interzero, based on our work, as well as the presentation of our lecture at the Future Resources Conference of Interzero in Cologne on November 5, 2025.
In addition, we are of course also available to provide you with further information in person. We would be happy to discuss with you which strategies and options are best for your company.
