Structural Transitions and Challenges in the EU Plastics Industry

I. Market Share Halved: A Significant Global Decline

The EU’s share of global plastic production has plummeted from 22% in 2006 to just 12% in 2024. This decline is not due to a shrinking global market, but rather the EU’s inability to keep pace with global capacity expansion.

• Global vs. Regional Growth Gap: In 2024, global plastic production grew by 4.1%, a cumulative increase of over 16% since 2018. Asia now accounts for 57.2% of global production, with China alone producing 34.5%—nearly triple the output of the entire European Union.

• Contraction in EU Output and Revenue: EU plastic production fell by 7.6% in 2023. While 2024 saw a marginal recovery of 0.4% to 54.6 million tonnes, this remains significantly below the 2017 peak of 64.4 million tonnes. Financially, the industry’s total turnover in 2024 was €398 billion, a 13% decrease from €457 billion in 2022.

II. Shifting Trade Dynamics: Three Years of Foreign Supply Dependence

For the third consecutive year, the EU has remained a net importer of plastic materials, with net imports reaching 1.6 million tonnes in 2024, signaling an increasing reliance on external supply.

• Market Concentration: The United States has become the EU’s largest source of polymer imports, holding an 18.9% market share. In contrast, EU exports to the U.S. account for only 7.7% of its outbound market. This imbalance and concentration of sources highlight potential supply chain risks.

• Regulatory Disparities: Marco ten Bruggencate, President of Plastics Europe, noted: “Europe is deepening its dependence on imported plastics, some of which may not meet EU regulatory standards, while local production bases continue to close.” The industry remains concerned that non-transparent imports are undermining fair market competition.

III. Bottlenecks in Circular Plastics: Bio-based Decline and Recycling Stagnation

Latest data reveals a significant gap between the actual growth of circular plastics in the EU and policy expectations:

• Growth Deceleration: Total circular plastic production in the EU remained stagnant at 8.4 million tonnes in 2024. Mechanical recycling grew slightly to 7.7 million tonnes, while chemical recycling plateaued at 110,000 tonnes. Bio-based plastics plummeted by 25% to 600,000 tonnes, primarily because biofuel subsidies diverted raw materials away from plastic production.

• Interpreting the 15.4% Share: While circular plastics accounted for 15.4% of total EU production in 2024, this percentage increase largely reflects the decline in fossil-based production (down 18.9% since 2018) rather than a substantial increase in circular output.

IV. Asian Expansion: China Outpaces the EU in Circular Production

While EU growth has stalled, the Asian market has rapidly expanded its footprint in the circular sector.

• In 2024, China’s circular plastic production reached 13.4 million tonnes, nearly double that of the EU.

• The same year, global circular plastic production surpassed 43.9 million tonnes, exceeding the 10% threshold of total global plastic production for the first time. This trend shows that Asia’s capacity expansion in circular materials is more flexible and efficient, placing the EU under dual competitive pressure in both traditional and circular markets.

V. Capacity Contraction: Facility Closures and Stagnant Growth

According to the Plastics Recyclers Europe (PRE) 2024 annual report, the European recycling industry is facing a significant contraction:

• Revenue and Capacity Losses: Industry turnover fell by 5.5%, impacting local employment. By the end of 2025, Europe is expected to have lost nearly one million tonnes of cumulative recycling capacity. The loss of new capacity in the first half of 2025 alone nearly equaled the total for the entire year of 2024.

• Impacted Sectors: Polyolefin films and PET have been hardest hit, accounting for 50% of facility closures between 2023 and 2024. High production costs, weak demand, and the influx of low-priced imports continue to squeeze profit margins.

VI. Core Challenges: Structural Factors and Long-term Impact

The decline in the competitiveness of the European plastics industry is rooted in structural shifts in production costs and the market environment:

• European manufacturers face energy costs consistently higher than the international average, coupled with high administrative compliance costs and limited supplies of circular feedstock.

• Imported recycled and virgin polymers now account for over 20% of EU consumption. Meanwhile, EU plastic waste exports increased by 36% in 2024 compared to 2022, indicating a shrinking domestic recycling capacity. If current trends persist, EU plastic production by the end of 2025 could fall back to year-2000 levels, with the consumption gap filled by imports, further increasing the risk of industrial offshoring.

VII. Call for Policy Action

In response to these challenges, Plastics Europe, along with an alliance of 28 companies across the value chain, has proposed six core recommendations to EU policymakers:

1. Implement measures to support energy costs.

2. Strengthen border enforcement to ensure import compliance.

3. Establish a trade observatory for chemicals and plastics.

4. Set mandatory targets for recycled content.

5. Reform EPR (Extended Producer Responsibility) fee structures.

6. Develop investment incentive mechanisms.

Virginia Janssens, Managing Director of Plastics Europe, stated: “The EU plastics industry is at a critical crossroads. European political leadership must evaluate how to maintain local industrial viability while building a circular plastics system and driving decarbonization.”