Europe’s Plastics Dilemma: How the Industry Is Breaking the Cycle—and Where We Go from Here.
Europe’s plastics recycling industry has seen explosive growth over the past decade. Spurred by a global shift away from waste exports and growing sustainability commitments, the sector has expanded, consolidated, and modernized at an impressive pace.
And yet, it is struggling.
Bankruptcies are rising. Profitability is falling. And despite years of investment and innovation, the industry remains heavily dependent on the economics of virgin plastics. At Anchor, we've worked closely with industry participants across the value chain—technology providers, recyclers, corporates, and investors. We've conducted over 120 company analyses, compiled 7,500+ financial data points, and built one of the most comprehensive internal datasets on the sector. This white paper distills our findings and reflects on how the industry can move from hype to performance.
From Boom to Bust: Understanding the Industry’s Cycles
Since 2017, the European mechanical recycling industry has passed through four distinct phases:
Emergence of Platforms (2017–2019) – Driven by M&A activity and early corporate investment.
Covid-19 Disruption (2020) – A brief pause, followed by a strong rebound.
Peak Optimism (2021–2022) – High demand and pricing, leading to platform expansion.
Current Recession (2023–Present) – Lower virgin plastic prices, high energy costs, and import competition have pushed the sector into a slump.
Installed capacity continues to rise, reaching 13.2 million tons in the EU27+3, but financial health has weakened. In 2023 alone, industry revenue declined by 19%, and EBITDA margins compressed significantly.
| “The sector has scaled—but not yet delivered sustainable profitability.”
Breaking the Dependence on Virgin Pricing
One of the most critical challenges facing recyclers is the dependence on virgin plastic prices. When virgin polymer prices drop, cost-sensitive applications shift away from recycled inputs. This cyclical pricing pressure undermines investment, planning, and long-term viability.
However, not all recyclers are impacted equally.
Companies operating at scale, producing high-purity outputs, and securing long-term offtake agreements are showing resilience. The emergence of such models points toward the industry’s future—one that is less vulnerable to market volatility.
The Industry’s Missed Opportunities
Despite impressive growth, most of the sector still services low-value, low-margin applications. High-cost feedstocks, limited sorting capabilities, and underutilized side-streams mean profit potential remains untapped.
Take flexible film recycling—the most profitable segment—yet many recyclers discard valuable components like PP and PET fines due to lack of processing capabilities. Better feedstock management alone could lift gross profits by up to 5%.
Four Levers for Change
To transition from survival to sustained growth, recyclers must move beyond capacity expansion and embrace a deeper operational and strategic transformation. Our analysis points to four key levers:
Feedstock Flexibility – Ability to process lower-grade, contaminated materials for higher returns.
Feedstock Value Maximization – Recovering and monetizing side-streams and discarded materials.
Operational Improvements – Investing in better water systems, energy efficiency, and automation.
New Business Models – Long-term contracts and equipment-as-a-service models that de-risk operations and attract external capital.
Why This Matters Now
The plastics recycling industry is not doomed—it is at a crossroads. The right strategies and partnerships can unlock profitable growth, reduce cyclicality, and accelerate the shift to a circular economy. Our white paper offers detailed insights, benchmarks, and financial performance analysis across:
430+ mechanical recyclers
120+ companies
44M+ tons of global waste processing capacity
Whether you're an operator, investor, policymaker, or supply chain partner, we believe this report will help you navigate what’s next. To truly break the cycle, Europe’s plastics recyclers must shift their mindset—from survivalist to strategist. The future belongs to players who:
Focus on quality and defensibility, not just scale
Partner across the value chain to secure long-term value
Embrace transparency, innovation, and efficiency at every stage
Anchor will continue tracking the market and sharing updates as the industry evolves. We hope this paper supports better decisions, smarter investments, and lasting impact. If this resonates with your work, let’s connect.
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