Shortly before last Christmas, the European Commission (EC) presented the long-awaited implementing act on mass balance accounting for chemically recycled content would be submitted to the member states for adoption. Meanwhile, the Commission also unveiled a new package of measures to boost circular economy and strengthen Europe's plastic recycling.

The core aim of the move is apparently to protect European domestic recycling industry, following a difficult year for Europe’s recycling sector. Indeed, if domestic recycling capacity continues to decline, meeting these targets becomes more difficult and reliance on imports grows, raising questions about transparency and environmental standards.

Notably, while the proposed drafts and measures are impacting the European circular economy development, their implications for the players in the recycling sector from outside the European Union (EU)  are both profound and protective.

Once implemented, the proposed EU regulations on recycling content for single-use PET beverage bottles will reshape rPET trade flows. (Image generated using AI)

Let Adsale Plastics Network walk you through the key drafts and measures with analysis. 

1. The EC has proposed the first-ever mass balance allocation rules for calculation, verification, and reporting of chemically recycled plastic content in single-use PET beverage bottles for under the Single Use Plastics Directive (SUPD).

The rules determine the share of chemical recycling outputs that can count towards the mandatory recycled content targets, 25% recycled content target for 2025 (and 30% for 2030), set out by the SUPD.

The Commission adopts a fuel-exempt approach, meaning that recycled materials diverted to fuel or energy recovery do not count toward recycled-content targets.

Analysis: The implementing act serves to supplement a decision adopted before, which only covers material from mechanical recycling. The rules will standardize chemical recycling across the EU and help the value chain meet the SUPD’s ambitious targets.

With applications where mechanical recycling isn’t feasible, the EC believes that chemical recycling provides a valuable alternative. According to the Commission, the European plastic industry foresees planning investments of up to €8 billion in chemical recycling over the next few years. A clearer regulatory framework hopefully can incentivize investment and the development of new technology.

The methodology for calculating the rules is based on the “fuel-use excluded” mass balance allocation rule – meaning that waste that is used to produce fuels or energy recovery can’t be counted as recycled content.

2. While the mass balance method allows accounting for chemically recycled content, insider sources unveiled that this proposal would establish a two-year transition period before imported recycled PET (rPET) from outside the EU could be used to fulfill the content targets for single-use beverage bottles until November 21, 2027.

This proposal is currently navigating the closed-door comitology process, and the temporary exclusion of imported recycled plastics was unveiled by sources that have access to the unpublished document.

Analysis: According to Plastics Recyclers Europe, more recycling capacity was lost in 2025 than in any previous year on record. By temporarily excluding recycled plastics produced outside the EU for the next two years, the EC is effectively “shoring up the walls” to trying to establish a level playing field for the struggling European recycling sector.

Indeed, European recycling industry associations have argued in recent months that only post-consumer plastic waste from products placed on the EU market should be eligible for the production of recycled material that can be credited towards EU targets.

The proposal arrives at a critical juncture for European plastic recyclers, who have faced high energy and operational costs and acute pressure from an influx of low-priced imports from North Africa and Southeast Asia.

Meanwhile, the proposed two-year transition period also acts as a “waiting room”, providing the EC with the time required to develop robust auditing mechanisms to ensure third-country facilities meet the standards equivalent to those of the EU.

The EC is trying to establish a level playing field for the European recycling sector.

3. Enhance customs tracking for imported recycled plastics by the introduction of separate customs codes for recycled plastics. Monitor imports of plastic by providing greater support to the newly created Import Surveillance Task Force and the dedicated monitoring system introduced in March 2025 to oversee certain industrial chemicals.

Analysis: Under current customs codes, imported virgin plastics and recycled products are not differentiated in sufficient detail in the EU, and some of the low-priced imported virgin plastics is entering the market mislabeled as recycled.

The result has been falling demand for EU-produced recycled plastics, even as EU regulations increasingly mandate their use in packaging and consumer goods. Additionally, tracking the precise volumes of recycled material entering the EU is difficult.

The EC has acknowledged the issue by introducing distinct customs codes for virgin plastics and recycled plastics. That would allow regulators to build a clearer picture of import patterns and spot misclassification.

4. Conduct audits for recycled materials, particularly for foot contact applications like PET, on the enforcement of recycling installations operating outside the EU and support control laboratories in the distribution of new analytical methods to verify whether material is indeed recycled from plastic waste.

Analysis: The upcoming amendment of is expected to introduce stricter requirements for compliance documentation when companies work with recycled plastics imported into the EU. Recycled plastics produced within the EU or imported from abroad will be held to the same levels of compliance.

These measures would extend enforcement beyond paperwork, addressing long-standing concerns from European recyclers that current checks rely too heavily on declarations rather than physical verification.

Implications for non-EU players

The EU already applies anti-dumping duties on PET from China after determining that imports were being sold at prices that forced European producers to operate at a loss. The EC also launched an anti-dumping investigation in May 2025 into PET imports from Vietnam.

The planned measures in the recycling sector from the EU signal a tightening of access to one of the world’s largest plastics markets, which would definitely reshape the trade flows of recycled plastics.

For Chinese and non-EU producers and brands, the message is clear: in Europe, the path to compliance would possibly paved with European-sourced recycled plastics, at least in the short-term. They have to eye on other markets outside the EU to keep business growing while continuing monitoring the development of the EU regulations.

Critically, while imported rPET may not count toward mandatory targets during the two-year window, its importation remains unhampered for general manufacturing purposes. This strategic pause is not a total retreat from global trade.