Plastics Recycling in 2026: Further Capacity Losses Loom

Outlook: Plastic Recycling in 2026 Further capacity losses are looming

2026-01-13 From Peter Jetzer | Translated by AI 3 min Reading Time

Europe's plastics recycling sector is coming under increasing pressure: Capacity is already being lost, while demand continues to rise. Recycario and Prognostica have jointly developed three scenarios showing how this could lead to significant bottlenecks by 2026.

(Bild: Nataliia - stock.adobe.com/KI-generier)

The European plastics recycling industry has been in the midst of a deep structural crisis since 2023. In the space of three years, approximately one million metric tons of capacity have been lost. Given the approximately 13 million metric tons of installed input capacity across more than 850 companies, this represents a significant structural shift.

Unless binding recycling quotas for new packaging are implemented more quickly and across the entire EU, this wave of closures is likely to continue. If the requirements that have already been adopted continue to have no effect, another 300,000 metric tons of capacity could be lost in 2026 as well.

Three Scenarios for Europe's Markets

Without expanding input capacity, Europe is highly likely to face a supply shortage by 2030, while mandatory recycling quotas are set to rise significantly. For Germany, a shortfall of approximately one million metric tons of post-consumer regranulate is expected. Across Europe, according to the BKV, the shortfall could exceed three million metric tons. A “break” in capacity expansion looms—and this during a period of increasing regulatory requirements.

Against this backdrop, Recycario and Prognostica have developed three scenarios in the new “Recycario Dashboard powered by Prognostica.” These scenarios do not represent precise price forecasts, but rather model-based risk indicators. They are based on the correlations between the OECD business climate, bale prices (film waste), and rLDPE quotations.

Input Flows Under Pressure

The structural stress scenario is the most critical. It combines the Europe-wide decline in capacity with a specific situation in Italy: Assorimap, which represents about 90% of Italy’s private recyclers, has announced that it will temporarily shut down facilities. This affects an annual capacity of about one million metric tons.

Stressszenario: Bei einer schleichenden Schließungswelle sowie struktureller Unterversorgung könnten die rLDPE-Notierung, transparent („Forecast-Custom“, orange Linie) bis April 2026 auf rund 1.595 EUR/t – rund 240 EUR/t über dem Ausgangsniveau Oktober 2025 ansteigen. — (Source: Recycario Dashboard – powered by Prognostica)

Amid a gradual wave of plant closures and structural undersupply, the rLDPE price—as shown in the “Forecast-Custom” orange line) could rise to around 1,595 EUR/t by April 2026—about 240 EUR/t above the October 2025 baseline.

In the model, this additional shock leads to a shortfall of approximately 830,000 metric tons of regranulate in the first half of 2026. The industry cannot make up for these shortfalls; input flows come under pressure, and market sentiment abruptly turns positive.

In the worst-case scenario, bale prices will rise by about 125 EUR/t within six months to just under 525 EUR/t. The rLDPE price will climb to about 1,595 EUR/t by April 2026—roughly 240 EUR/t more than in October 2025. By comparison: The annual average prices for LDPE regranulates were 1,328 EUR/t in 2023, 1,303 EUR/t in 2024, and 1,345 EUR/t in 2025 (January through November).

Conclusion

Europe’s supply of regranulate is significantly more fragile than the 13 million metric tons of installed recycling capacity would suggest. Without reliable collection systems, clear recycling targets, and appropriate policy instruments, there is a risk of a period of structural undersupply—with highly volatile prices.

INFO

Author

Peter Jetzer is the director of the Recycario Data Science Institute for Economic Plastics Recycling.

Partnership

The Recycario Data Science Institute for Economic Plastics Recycling is an independent, entrepreneur-led research institute. Since mid-2023, it has been working with Prognostica GmbH to develop a forecasting methodology for plastics recycling based on broad data analysis.

Service

Recycario also publishes a detailed monthly report on the regranulate market, including six-month price forecasts. This report is available by subscription to professionals in the recycling industry and the plastics processing sector, as well as to interested parties in the packaging sector and the business community.

For more information, visit www.recyrion.com

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