Europe’s Recycled Plastics: From Crisis to Competitiveness

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Oskar Lingk, Philipp Werner & Ciara Gumsheimer
December 18, 2025

👋 Welcome

Welcome to this edition of the Supply Chain Tech Newsletter! In this issue, we are tackling a paradox: plastic is the most ubiquitous material in our supply chains, yet our ability to manage its end-of-life remains the single biggest bottleneck to solve. Following the breakdown of global plastic treaty negotiations this year, we dive into the state of the recycling market. Read on to understand why regulation alone won't save the sector - and why technological innovation must take the lead once again. We map the new wave of founders deploying AI, novel processes, and smart marketplaces to rewrite the rules and economics of recycling.

Why This Matters Now

Few inventions have shaped modern life as profoundly as plastic. Without it, global supply chains would break, modern healthcare would fail, and the device you are reading this on wouldn't exist. Yet, the paradox is sharp: the material that defines our modern convenience is now a key driver of our environmental crisis. Derived from petroleum and engineered to last for centuries, plastic becomes more ubiquitous by the day - from the depths of the ocean to our own bloodstreams.

For years, the public and industry hoped for global governance to solve this. That promise evaporated on August 15, 2025, in Geneva. The collapse of the UN plastics-treaty talks means there is no imminent global brake on virgin plastic production. The fallout creates a regulatory vacuum on the global scale. With no agreement on production caps, the 460 million metric tonnes of plastic produced this year will continue to grow unchecked. The OECD now estimates global plastic waste will exceed 1 billion tonnes in 2025, on its way to 1.7 billion by 2060. While the global community stalls, the question becomes: how is the frontrunner Europe doing? Unfortunately, the answer is sobering - and revealing that we can no longer rely on regulation, but once more need to focus on innovation instead.

The European Market is in Crisis

The European plastic recycling sector is facing an unprecedented downturn, marked by the significant decline in the industry’s turnover for the second year in a row, decreasing 5.5% from €9.1 billion in 2023 to €8.6 billion in 2024. For the first time, both the total volume of input plastics material and the recyclates produced decreased in 2024, compared to the previous year. The culprit is a "perfect storm" of high operational costs, driven by persistently high prices of raw materials, rising production and electricity costs, combined with unregulated, cheaper virgin plastic imports. This arbitrage is decimating local industry: waste exports from the EU have surged by 36% since 2022, as for many it becomes cheaper to ship waste abroad than to recycle it at home.

The impact on the European landscape has been devastating. Facility closures doubled in 2024 and the outlook for 2025 offers little relief - while final numbers are pending, expectations remain equally grim for both SMEs and large enterprises.

New Regulations Are Necessary, But Won’t Cut It

On paper, the EU has a plan to stop the downturn. The new Packaging & Packaging Waste Regulation (PPWR) mandates ambitious recycling targets, while the "Mirror Clause" is designed to ensure that imports need meet (“mirror”) EU standards to prevent price undercutting. But writing rules is different from enforcing them. The quality and speed of enforcement remain unclear, while recent rollbacks on sustainability reporting (CSRD) and due diligence (CSDDD) cast doubts on the EU's commitment and capabilities to effectively enforce ESG standards.

The implication for investors and operators is clear: Do not wait for a regulatory rescue. With enforcement uncertain, the burden and the opportunity shift to technological innovation. The equation is simple: the more we can recycle, the less we need to produce. But to seize this opportunity, we first need to understand how plastic recycling actually works.

From Bin to Pellet: The Process and the Players

Despite Europe’s positive reputation as a recycling leader, the vast majority of plastic waste still ends up incinerated. While official "packaging recycling" rates look respectable, the reality for total plastic waste is grim: only 27% of Europe's post-consumer plastic waste is actually recycled. The rest is landfilled or lost to "energy recovery" - a polite way of saying burned. This inefficiency means that despite decades of effort, circular plastics make up just 13.5% of the raw material used in new European products. The performance gap between nations is massive: while according to Eurostat Belgium leads the class with a packaging recycling rate of nearly 60%, major economies like France lag significantly behind at roughly 26%.

The industry relies almost exclusively on mechanical recycling, which accounts for over 99% of the current output. It is a proven, energy-efficient process but is vastly limited by contamination - you cannot mechanically turn a dirty food tray into a pristine bottle. Chemical recycling, often hyped as the solution for mixed waste, remains a pilot-scale promise so far, contributing only around 0.1% to the market, while facing severe scrutiny over both its profitability and environmental impact.

The European market itself is deeply fragmented, characterized by a long tail of ~850 recyclers and 50,000+ converters, often lacking the transparency needed for efficient trade. This fragmented and inefficient landscape has become a breeding ground for startup innovation.

Startups Driving Innovation Across the Value Chain

Innovation in recycling isn't about a single silver bullet; it is about optimizing every link in the supply chain. The transformation begins at the source with Reverse Logistics & Collection. Here, the challenge is securing cleaner, denser feedstock before it gets contaminated. In the US, players like Replenysh and Ridwell are building digital supply chains and subscription models to recapture materials directly from communities and businesses, bypassing the inefficiencies of traditional haulers.

Once collected, the waste hits the Sorting lines, where the battle for purity is fought with AI and robotics. This is a hotbed of transatlantic competition: UK innovators Recycleye and Greyparrot are deploying computer vision to automate waste analysis and sorting, competing directly with major US incumbents like AMP Robotics and newcomers like Glacier.

The sorted material then moves to Processing, where the goal is to turn waste back into high-quality raw material. This is where "deep tech" shines. In Europe, DePoly, Carbios, and Epoch Biodesign are pioneering chemical and enzymatic recycling to break down complex PET and nylons. Beyond Europe, the ecosystem is scaling diverse approaches: from PureCycle’s solvent-based purification and Novoloop’s chemical upcycling in the US, to Nexus Circular's advanced pyrolysis tech. Meanwhile, Australia’s Samsara Eco is making waves with its infinite enzymatic recycling technology, recently opening its first commercial facility.

But making the material is only half the battle; selling it is the other. B2B Marketplaces are digitizing the trade to solve the industry’s chronic fragmentation. Europe is leading this digital layer with Cirplus, Safi, and Ambio, while Circular is building the equivalent infrastructure for brands in the USA. To ensure this trade is legitimate, Digital Traceability players like Circularise are using blockchain to create digital passports, ensuring compliance with EU regulations.

Finally, for the pollution that escapes the loop, a new category of Microplastics Capture is emerging. Startups like Matter, PlanetCare, and CLEANR are engineering filtration tech for washing machines and industrial wastewater to catch microfibers before they enter our oceans.

The common thread across these categories is efficiency: every innovation here reduces cost, increases purity, or unlocks new supply - the three levers that ultimately determine whether recycled plastics can outcompete virgin material.

Conclusion

The collapse of the UN treaty and the uncertainty of EU enforcement highlight a critical reality: regulation will not solve this crisis. The burden of execution has shifted from policymakers to innovators even more. We are witnessing a decoupling in the European market. On the macro level, traditional recyclers are being squeezed by global arbitrage and high energy costs. But on the micro level, startups are building a new infrastructure. While legacy mechanical plants are closing down, a new generation of AI-driven sorters, process innovators, digital marketplaces, and microplastics removal startups is emerging. We believe the capital flowing into this space will concentrate on efficiency upgrades - making plants smarter, increasing quality, and significantly improving cost-competitiveness, ultimately transforming our overwhelming waste volumes into valuable feedstock.

💡 Interesting Reads

  • 2024 Data Reveals a Deepening Crisis of the European Plastics Recycling Industry (incl. Report) | Plastics Recyclers Europe

  • Growing the circular economy in chemicals | McKinsey

  • The Circular Economy for Plastics – A European Analysis 2024 | Plastics Europe

  • INC-5.2: The global plastics treaty talks - here's what just happened | World Economic Forum

  • European packaging waste statistics | Eurostat

  • Breaking the Plastic Wave 2025: Economic and Environmental Impacts | The Pew Charitable Trusts

  • From Controversy to Context: Evidence-Based Insights on Chemical Recycling | Baker Institute

  • PPWR at a Glance: New EU Packaging Waste Regulation Explained | FKuR

💸 Funding Rounds

General Supply Chain Tech

  • Resourcly raises €2.7M to revolutionize manufacturing inventory management | Startbase

  • Forgis secures €3.8 million to automate industrial manufacturing | EU Startups

  • Dexory raises $165M Series C to deploy autonomous warehouse robots globally | Sifted

  • Qargo raises $33M Series B to decarbonize and digitize transport management | Tech Funding News

  • Cerrion secures €15.6 million to scale its AI video-agent platform | EU Startups

  • Faction raises $4M to accelerate AI Agent Tech for Distributors | mdm

  • Einride secures $100M to accelerate autonomous electric freight expansion | Techcrunch

Plastics Recycling

  • aevoloop raises €8.25M Seed to launch circular polyolefin technology | ETMM

  • Epoch Biodesign raises $18.3M Series A to transform plastic waste with enzymes | Tech.eu

  • Novoloop raises $21M Series B to scale circular performance materials | Business Wire

  • Amazon-backed Glacier gets $16M to expand its robot recycling fleet | TechCrunch

  • Replenysh raises $8M Series A to build the operating system for material recovery | WasteDive

👷 Jobs in the Industry

Interested in working in Supply Chain? Here are some startup-ups and scale-ups hiring across a variety of roles:

✍️ Want to contribute?

As we grow the Supply Chain Tech newsletter, we are keen to get as many people involved as possible! If you’re interested in supply chain topics, and want to help us spread the word on this exciting space, please do get in touch. We’re always looking for guest authors and collaborators.

Supply Chain Tech Newsletter Team

Philipp Werner is an operator-turned investor and Partner at Project A. He specialises in investing in global supply chain technology and serves on the board of directors of related companies like Relay, Metycle and Enapi. Philipp also launched the Project A Studio, partnering with founders at the pre-idea stage, and previously worked hands-on with 25+ VC-backed startups including Sennder, Trade Republic, and Spryker. 

Ciara Gumsheimer serves as an Investment Manager at Project A, where she invests across sectors with a strategic focus on global supply chain, climate, and healthcare technology. Prior to joining Project A, Ciara worked at a FinTech startup in Berlin, after completing degrees at the University of Cambridge, UC Berkeley, and EDHEC Business School.

Oskar Lingk is a Senior Associate at Project A covering global supply chain technology. Before joining Project A, he co-founded a digital survey provider for urban planning processes. After leaving the company in good hands, he joined BCG, focusing on Industrial Goods, Logistics and Technology.

Project A Ventures is one of the leading early-stage tech investors in Europe with offices in Berlin and London and we are early backers of the logistics unicorn Sennder. We have invested in some other notable companies in Global Supply Chains, such as Pactum, Metycle, and Relay. Besides Global Supply Chains we provide capital to firms shaping Europe's future across other key themes including Fintech, European Resilience, and the Future of Autonomous Work. Our 130+ company portfolio features category leaders such as Trade Republic, Quantum Systems, KRY, Spryker and STARK.