The move came as EU plastics recyclers face what the Commission described as a “perfect storm” of challenges, including fragmented markets for recycled materials, high energy costs, volatile virgin plastic prices and competition from cheaper imports from third countries.
These pressures have already resulted in reduced capacity utilisation and financial losses across the sector, with Plastics Recyclers Europe (PRE) warning last year that the sector is facing “imminent collapse.”
According to evidence from the Commission’s Joint Research Centre, scaling up circular solutions could cut climate-related emissions in the sector by 45%, significantly decarbonise energy use and improve the EU’s trade balance by €18bn per year by 2050.
Circular Economy Act scheduled for 2026
The package follows a two-step approach.
In the first phase, the Commission is rolling out a set of pilot actions designed to ease immediate pressure on circular economy sectors and encourage investment and innovation, particularly in plastics recycling.
In the second phase, the Commission confirmed that it will bring forward a Circular Economy Act in 2026.
This legislation is expected to introduce further structural measures to improve the functioning of the Single Market for secondary raw materials.
Tackling market fragmentation
A central element of the package was an implementing act to establish EU-wide end-of-waste criteria for plastics under the Waste Framework Directive.
The Commission said harmonised criteria are a “key step” in creating a genuine Single Market for recycled plastics.
By setting common rules on when plastic waste ceases to be waste and becomes a reusable material, the measure aimed to simplify administrative procedures for recyclers while ensuring a stable supply of high-quality recyclates across the EU.
The draft implementing act has been published for public feedback, with consultation open until 26 January 2026, ahead of final adoption.
The Commission is also creating separate customs codes for virgin and recycled plastics to improve transparency in trade flows and support fair competition between EU-produced and imported plastics.
Support for chemical recycling
The Commission is presenting for vote by Member States an implementing act on recycled content requirements for PET single-use plastic beverage bottles under the Single-Use Plastics Directive.
Under the proposed rules, chemically recycled plastics could count towards EU recycled content and recycling targets, subject to certain conditions.
The Commission said this approach would ensure that chemical recycling complements, rather than replaces, mechanical recycling, while creating new opportunities for investment in advanced recycling technologies.
Financial levers
Alongside regulatory initiatives, the Commission also signalled an expansion of financial and institutional support for circular projects.
It confirmed plans to step up support for circular economy projects by leveraging cooperation with national banks and the European Investment Bank, with the aim of crowding in private investment.
The Commission also planned to relaunch and strengthen the Circular Plastics Alliance, positioning it as a more structured and inclusive platform for cooperation across the plastics value chain.
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