Plastics and Circularity – Caught between Necessity and Potential
K 2025 from 8 to 15 October 2025 in Düsseldorf (Germany) – according to the organizers “the world’s No. 1 trade fair for the plastics and rubber industry” – has set itself the goal of addressing the central issues of our times. One of its three “Hot Topics” reads “Shaping the Circular Economy”. For the exhibition team, this was reason enough to shed some light on the current state of affairs in terms of circularity ahead of this international event.
The world is experiencing a raw material crisis: more than 100 billion tons of raw materials are consumed annually but over 90 percent of the raw materials used are not recycled. An alarming ratio flagged up by the European Investment Bank (EIB). Rising CO2 costs, volatile raw material prices, and geopolitical insecurities put additional pressure on companies to manage resources more carefully.
Circularity is considered the decisive lever for achieving a sustainable future. An analysis by management consultancy Material Economics shows that Europe could save 450 million tons of CO2 equivalents through closed material cycles by 2030 – this corresponds to eight percent of the current emissions. In the long term, the Ellen MacArthur Foundation forecasts that up to 45 percent of emissions could be avoided by a closed-loop circular economy.
This transformation also holds enormous economic potential: according to estimates by consulting group EY, the use of secondary raw materials reduces energy consumption by 20 to 90 percent, saves large amounts of water, and could save European firms up to 465 billion Euro in material costs per year. The International Labour Organisation (ILO) also expects seven to eight million new jobs to be created worldwide by the transition to a circular economy by 2030. More and more use cases show that circularity makes not only ecological but also economic sense. For instance, the German Cabka Group annually produces pallets and crates from some 150,000 tons of recycled plastics by their accounts – proving thereby how waste can be turned into valuable products.
Plastics industry: A key sector with catching up to do
The plastics industry plays a pivotal role in this transformation. In 2023, 413.8 million tons of plastics were produced worldwide, according to Plastics Europe, but the share of recycled materials continues to be low: only 8.7 percent of plastics were recycled – most of them by mechanical recycling – whereas the lion’s share was incinerated or landfilled. This is happening even though recyclates hold enormous potential. Their production requires markedly less energy than producing new products from fossil raw materials, thereby substantially reducing CO₂ emissions. On top of this, their use increases supply security – a factor of rising importance in times of geopolitical crises.
However, recycling is technically demanding – and often more expensive than producing new plastics. After all, post-consumer plastics have to be sorted, cleaned, and prepared with great effort. In addition, the legal requirements are strict, high-quality recyclates are scarce and many processes are energy-intensive – all resulting in higher production costs compared to new plastics. “But nobody wants to pay higher costs,” stresses Ulrich Reifenhäuser, Chairman of the K Advisory Board. “Plastics are so successful because they are so much better than other materials. But the transition to the circular economy costs money. This cost issue will not be overcome without regulatory requirements.” However, the responses to the question of how the transition to a functioning circular economy will work vary by country.
Europe looks to regulation
While other nations focus on voluntary commitments and market-oriented solutions, Europe regulates by law. Strategies such as the “Circular Economy Action Plan” (CEAP) and regulations such as the Packaging and Packaging Waste Regulation (PPWR) and the Single-Use Packaging Directive (SUPD) drive the transition to circularity using recycling rate, mandatory recyclate content, and Extended Producer Responsibility (EPR). The PPWR shows how this works: since 2025 single-use PET bottles have to contain a minimum of 25 percent recycled plastic and this percentage will go up 30 percent by 2030. For manufacturers such as Coca-Cola or Nestlé, this means rebuilding their supply chains, sourcing high-quality recyclates, and adapting production – otherwise, they run the risk of a sales ban. The SUPD is also having an impact: in Lithuania the return rate of PET bottles shot up from 34 percent to 92 percent after introducing a deposit system – all within just two years”. Companies face major challenges in the process: the limited availability of high-quality recyclates, the technical complexity of changing over to a recycling-friendly design – and the short deadlines set for complying with these often-complex requirements.
Chemical ingredients are also increasingly moving into the focus of the EU. The handling of PFAS is especially disputed since a ban could make recycling considerably more difficult – because plenty of waste plastics would then be classified as contaminated and eliminated from the circular economy. Wolfgang Große Entrup, Director General of the Association of the Chemical Industry e. V. (VCI), therefore warns against a blanket ban: “With each individual substance banned in the EU the risk grows that more of our industry players move to less regulated regions. This, however, does not solve the original problem.”
Asia: Between advances and structural deficits
Accounting for 53 percent of global plastics production Asia is the main player and source of plastic waste. While some countries pursue ambitious recycling strategies, others lack the basic infrastructure.
China’s circularity offensive: centrally controlled, consistently implemented
For a long time, China was the biggest importer of plastic waste, and now the country is recharging its course. By adopting its “National Sword Policy”, the country has stopped the imports of unsorted plastic waste and is now driving the expansion of its recycling structures. The 14th five-year plan focuses on modern collection and sorting systems and promotes both mechanical and chemical recycling. By 2035, the industry aims to be largely decarbonised and have transitioned to closed material cycles. This strategy is accompanied by the “Circular Economy Promotion Law”, which obliges companies to take back and safely dispose of specific products and the establishment of the state-owned “China Resources Recycling Group” to centrally control the transformation.
Japan and South Korea: Driving technology systematically
Japan and South Korea are among the pioneers in the circular economy – not least due to clear political objectives and early-adopted legislation. In Japan, the “Container and Packaging Recycling Act” has already obliged companies since the 1990s to participate in return and recycling systems. This is supported by the “Plastic Resource Circulation Act” adopted in 2022, which promotes recyclate use and prescribes detailed recycling plans for plastic products.
South Korea pursues a systemic, technology-driven approach via its new “Act for Promotion of Transition to a Circular Economy Society” (APTCES): binding recycling rates, clear requirements for sustainable product design as well as targeted regulation for hard-to-recycle products. In addition, companies wanting to place new recycling technologies on the market are temporarily exempted from restrictions.
Unlike Europe, these two countries are banking on clear responsibilities, hands-on implementation, and targeted innovation funding rather than detailed regulation. This approach is supported by high social acceptance and responsibility assumed across the board when it comes to waste separation and saving resources, for example.
From India to Indonesia: Why the circular economy is faltering
In India, the “Plastic Waste Management Rules” (PWMR) oblige companies to take back plastic waste. Despite this important step insufficient infrastructure and the varying regional applications of the rules remain a major challenge for a nation-wide implementation. Similar problems exist in Vietnam, where an EPR law was introduced in 2022. It holds manufacturers and importers accountable for seeing to the recyclability of their products.
In Thailand, the “Plastic Waste Management Roadmap 2030” pursues the aim of recycling or energetically using 100 percent of plastic waste by 2027. There are local initiatives in Indonesia but there is no comprehensive national strategy. One objective is to reduce drastically the plastic waste that ends up in the sea by 2040. Despite the progress made in these countries the regional fragmentation of waste management and the lack of infrastructure continue to pose a major challenge. Raising people’s awareness and stronger industry involvement will make or break the success of these measures.
North America: A patchwork of strategies
In North America, circularity strategies are heavily fragmented. The USA is pursuing an approach comprising state initiatives and private business measures. 33 US states have established EPR programs, which oblige manufacturers of single-use packaging to participate financially in waste management. By 2032, 100 percent of packaging will be recyclable or compostable, and 65 percent of one-way packaging be recycled. Other states, however, lag behind. There is also another reason why plastic recycling in the USA only has a low uptake compared to the rest of the world, despite modern recycling technologies: “There is neither a national nor a state-wide recycling program that would cover at least a complete federal state. Instead, individual cities and municipalities decide whether, how, and which waste they collect and sort,” explains the German federal economic promotion agency, Germany Trade & Invest (GTAI).
Canada pursues a more comprehensive approach to promoting the circular economy. The government has introduced the “Federal Plastics Registry”, a national registry for plastics to collect data about the production, use, and disposal of plastics. It is designed to increase transparency and make for more effective plastic management. The “Action Plan on Zero Plastic Waste” aims to reduce plastic waste and establish a circular economy for plastics. It includes measures for reducing single-use plastics and promoting reuse and recycling. Beyond this, a gradual approach is pursued to reduce plastic waste by banning single-use plastic products and introducing EPR.
South America has a long way to go
In South America, the circular economy is still in its infancy – some 90 percent of waste ends up at landfills, and recycling is only of secondary importance. Chile, Colombia, and Brazil have national return and circularity schemes such as Chile’s “Ley REP”, Colombia’s “Basura Cero” initiative, or voluntary industry solutions in Brazil. Uruguay relies on consistent waste management with its Integrated Waste Management Act (Ley 19.829) and promotes packaging recycling. Despite various advances and initiatives, however, infrastructure remains insufficient in many South American regions and success will depend on further state investment, international cooperation, and stronger awareness raising among the population.
Summary & Outlook
The circular economy is both an obligation and an opportunity alike for the plastics industry. Europe pursues a strictly regulatory approach; Asia combines state regulations with technology offensives, while in the Americas the spectrum ranges from ambitious requirements to a patchwork of isolated measures or confidence in the invisible hand of the market.
However, every circular economy model has its pitfalls: regulation creates clear rules but can lead to excessive bureaucracy and lack of investment – a risk that becomes increasingly perceivable in Europe. “To avoid a slowing down of the transformation we urgently need measures to make investment in the production of circularity-ready plastics more attractive, reduce red tape caused by excessively long approval procedures to name but one, and return to a level-playing field with our international competitors,” warns Virginia Janssens, Managing Director of Plastics Europe.
Market-based approaches promote innovations but do not guarantee nationwide implementation. Centrally controlled strategies produce fast progress but can become inefficient. One thing is clear: without higher recycling rates and more recyclates, circular economy remains a patchwork. Learning from each other can combine strengths and compensate for weaknesses.
(Published in GLOBAL RECYCLING Magazine 2/2025, Page 32, Photo: Messe Düsseldorf / tillmann)
