ICIS and CPCIF Unveil New Study Revealing Wide-Ranging Impacts of EU Circularity Regulation on Global Recycled Plastics Demand

London and Beijing, 22 October 2025 – ICIS, a leading source of commodity intelligence, and CPCIF, the leading national organization for China’s petroleum and chemical industry,  today released a new study shedding light on the impacts of the European Union’s circularity regulation on global demand for recycled plastics, generally and China’s chemical industries, in particular, with key implications across packaging, automotive, and textiles.

Driven by the implementation of the EU Packaging and Packaging Waste Regulation (PPWR) and upcoming legislation in other sectors, the study forecasts a sharp increase in demand for recycled content, particularly for polyethylene (rPE), polypropylene (rPP), and polyethylene terephthalate (rPET).

Key Findings Include:

• Substantial Demand Growth: By 2030, EU producers will require approximately 5.4 million tonnes/year of rPE, rPP, and rPET to meet mandated minimum recycled content targets. This figure is expected to more than double to 11.5 million tonnes/year by 2040, driven by regulation across packaging, automotive, and fiber applications.
• Critical Role of Chemical Recycling: Due to limitations in mechanical recycling—especially for food-safety and performance-sensitive applications—chemical recycling will be essential to meet the required volumes of recycled polyolefins for packaging.
• Global Spillover Effects: The interconnected nature of trade means EU regulations will influence global supply chains. Exporters placing goods in the EU market must comply with recycled content requirements, impacting sourcing strategies and boosting demand for certified recycled materials globally.

China will continue to play an important role in the EU’s plastics supply chain:

• China’s Strategic Response: As a major EU trade partner, China is expected to supply over 1 million tonnes/year of recycled plastics by 2040 to meet demand for export-bound finished goods. While this volume is small relative to China's total market size, the strategic impact is significant, driving investment in R&D, standards alignment, and value chain transformation.
• Compliance as Competitive Advantage: The study highlights a shift among Chinese exporters from reactive compliance to proactive positioning. Firms are investing in certified recycled and bio-based materials, aiming to turn regulatory requirements into sources of competitive differentiation.
• Market Opportunities and Challenges: Although short-term operational costs are expected to rise due to redesigns, certification procurement, and supplier changes, the study points to emerging market opportunities for high-performance, EU-compliant recycled plastics—especially where companies standardize packaging across markets to streamline compliance.
• Catalyst for Domestic Reform in China: The EU’s regulation is also acting as a catalyst for China’s domestic recycling reforms, potentially boosting internal demand for recycled content and improving consistency in material traceability and quality.

“This study shows that EU circularity regulation is no longer just a regional policy; it's becoming a global market force, shaping industrial strategies and supply chains worldwide,” said Helen McGeough, Global Analyst Team Lead, Plastics Recycling, ICIS. “China’s proactive response may prove pivotal in narrowing the gap between domestic and international standards and accelerating the global transition to a circular economy.”

As regulatory momentum builds, businesses and policymakers alike are encouraged to recognize compliance not just as a challenge, but as an opportunity to drive innovation, secure market access, and lead in the global circular economy.

To read the full report, please visit here.