< PreviousThe plastics processing industry in Poland and across the European Union is currently facing serious challenges which directly affect its competitiveness, stability and fu- ture growth prospects. Companies in the sector are increasingly im- pacted by both regulatory and eco- nomic factors. On the one hand, firms must con- tend with increasingly restrictive EU regulations, which impose addition- al administrative and technological requirements; on the other, growing pressure to raise re- cycling rates is forcing costly investment in new solutions and processes. Added to this are record-high energy prices, which significantly increase production costs and reduce profitability. As a result, European firms are at risk of losing their competitive edge to manufacturers outside the EU, where regulations are less stringent and production costs considerably lower. I Over-regulation and the risk of losing production from Europe In recent years, the EU plastics sector has been burdened with another wave of environmental, production and trade The state of the plastics processing industry: challenges and risks to competitiveness Robert Szyman Managing Director of the Polish Union of Plastics Converters (PZPTS) The European plastics industry faces challenges from strict regulations, rising recycling demands, and record-high energy costs. Production is shifting outside the EU, risking dependence on imports and weakened competitiveness. While recycling is vital, cheaper, lower-quality imports threaten local processors. To safeguard jobs and competitiveness, the sector needs stable regulations, fair recycling policies, and lower energy costs Plast Echo30regulations. While many of these are justified on environ- mental grounds, their excessive pace of introduction com- bined with other adverse factors means that the production of virgin plastics is gradually shifting outside Europe. According to analyses by Plastics Europe, although the global situation has improved, the data for Europe are far less encouraging. Reports indicate that in the first quarter of this year, average industrial production across Europe fell by 1.7% year on year. Industrial output increased in two of the five largest EU economies (Germany and Spain), while in the other three (France, Italy and Poland) declines were recorded. It is not only energy-intensive sectors but also many other industries that are struggling with falling orders. EU pro- duction of plastics in primary forms in the first quarter of 2024 rose by 2.7% compared to the previous quarter. It was also higher than a year earlier, but demand was driven mainly by orders from outside Europe. Current production levels remain around 20% lower than before the outbreak of the war in Ukraine. If this trend continues, Europe will be forced to import raw materials and products from third countries – a move which carries not only price risks but also political risks. The earlier dependence on Russian raw materials, or today’s reliance on imports from the United States, demonstrates how dan- gerous it can be to rely on sources over which Europe has little real influence. With regard to trade in plastic products, the risk of political relations with the US having a major im- pact appears smaller, owing to the relatively modest export surplus over imports. Not only producers but also plastics processors in the EU are failing to see growth. Since 2023, there has been a de- cline in the value of goods sold by EU companies on the internal market. At the same time, since 2022, production of plastic products has also fallen. Nevertheless, the EU has maintained a relatively stable positive trade balance with non-EU countries. Declining demand within the EU market is being partly offset by exports. I Pressure to recycle – sound assumptions, difficult practice EU policy assumes the intensive development of recycling as one of the pillars of the circular economy. This direction is undoubtedly correct – increasing recovery and reuse of plastics can, in the long term, deliver tangible environmen- tal and economic benefits. The problem arises, however, when significant volumes of recyclate from outside the EU begin to enter the market. Imported material is often more competitive on price, but its quality does not always meet the EU’s strict standards. The absence of effective mecha- nisms for verifying and controlling the technical parameters of recyclate from third countries risks undermining confi- dence in the entire secondary raw materials segment. At the same time, imports of cheaper recyclate weaken the competitiveness of local plants, which continue to struggle with surpluses of their own waste and limited options for managing it. Plastics production (including countries outside the EU27) ExportImport Great Britain14,9%USA22,2% Turkey11,8%South Korea12,7% China11,7%China11,5% USA11,7%Switzerland9,3% Switzerland5,9%Saudi Arabia6,4% Plastics processing (including countries outside the EU27) ExportImport Great Britain17,1%China32,6% USA13,3%USA12,2% Switzerland10,0%Great Britain12,2% China6,7%Turkey8,7% Turkey5,2%Switzerland8,0% Non-EU trading partners (in terms of sales value) in 2023 Source: “Plastics in the circular economy. Analysis of the situation in Europe”, Plastics Europe 2024 International Edition – K 2025 31Plast EchoThe consequences of this situation may include both job losses in European processing and a further widening of the trade deficit in plastics. In addition, lower prices for virgin raw materials continue to discourage the use of recyclate, with a negative effect on demand for recycled material. Data show that European polymer exports fell by 25.4% be- tween 2020 and 2023, clearly indicating the region’s weak- ening position in global markets. The structure of trade also confirms the challenges facing the industry. For Poland, Germany remains the principal intra-EU partner, while outside the EU the most important partners include Ukraine (exports of plastics in primary forms) and South Korea (imports), as well as the United Kingdom (exports of plastic products) and China (imports). Notably, China is now Europe’s main partner in imports of plastic products, accounting for 32.6% of the total volume in 2023. Meanwhile, there is no shortage of raw materials for plas- tics production – whether derived from petroleum or from alternative sources, including innovative technolo- gies based on CO₂ utilisation. Contrary to earlier forecasts warning of rapid depletion, the availability of base raw ma- terials is not currently the main constraint on industry de- velopment. Increasingly decisive are legal regulations, price competition and the capacity to implement modern recy- cling technologies. I Energy costs and the risk of losing competitiveness The plastics industry is relatively energy-intensive – par- ticularly in the production of raw materials and in recycling, while in processing energy also represents a significant cost factor. High and volatile energy prices in EU countries sub- stantially increase operating costs. Coupled with the poten- tial introduction of protective tariffs on finished goods from Asia or other external markets, this creates the risk of trade wars and retaliatory measures, which could further reduce the profitability of European exports. The example of US–EU trade relations, where tariff increas- es were met with immediate retaliation, demonstrates that protectionism does not always bring the desired results. “These tariffs could trigger a chain reaction, leading to higher raw material prices, reduced competitiveness and job losses across the European Union. Such measures run counter to Europe’s industrial and environmental ob- jectives,” stresses Paolo Bochicchio, Managing Director of EuPC. According to the European Commission, the tariff rates are as follows: •Imports from Egypt: 74.2% to 100.1% •Imports from the US: 58% to 77% The measures are intended to protect the EU PVC indus- try, which provides employment for around 4,000 people in seven Member States. Without intervention, the market could suffer further collapse and the closure of production plants within the EU. In protecting the market, however, it is important to safe- guard export opportunities, without which many compa- nies in the processing sector will not be able to survive. To remain competitive, the European – and therefore also the Polish – plastics industry needs a coherent and predictable regulatory framework, a rational approach to recycling, and tangible measures to reduce energy costs. Without these, Europe risks not only losing production to non-EU markets but also deepening its dependence on im- ports of raw materials and products – a development which, in the longer term, could weaken the economic security of the entire Union. • Plast Echo32How did a milking cow become a dead dog? After a summer of bad moods, the autumn of bad moods has come to the polymer markets and I dare not even think about the winter, the last quarter. The illusions of a seasonal strengthening in the fall seem to be disintegrating everywhere. So far, Sep- tember has not brought a spectacular but noticeable increase in demand and October is not expected to do so ei- ther. What happened to the European polymers and plastics market? The problem is big and this is also felt by European interest groups, who have addressed European decision-makers, parliament and national governments in a joint declaration entitled “Plastics Value Chain Demands Immediate Ac- tion to Save EU Industry”. The main demands are as follows: •Restore Fair Competition – Pro- mote EU-Made Circular Plastics Now •Cut Energy Costs – Empower and Support Circular Plastics to Com- pete Globally •End Loopholes in Verification and Enforcement •Tackle Fragmentation – Imple- ment and Enforce EU Law •Break the Deadlock – Catalyse In- novation and Private Investment •Enhance EPR for a Fair Circu- lar Market. It is in all our interests to support these demands, but are we really solving the problems? In my opinion, the root of the problems is deeper and, given the long-term trends, it is unlikely that we can change the situation. At least in the short term and certainly not by ad- ministrative means. To understand the problem, it is neces- sary to distinguish between virgin and recycled plastics. Although we seem to be talking about one product range, we are not. With one or two exceptions, recycled plastics are only partially and limitedly suitable as a substitute for virgin poly- mers, both in terms of quantity and quality. Virgin polymers are produced on an industrial scale, while recycled plastics are partly manufactured on a handmade basis, and the difference in production figures shows that the difference is of a large magnitude, and has been increasing for years. The problem is strategic, so a strate- gic analysis should be carried out. The BCG matrix is well known to everyone, with two dimensions: market growth rate and relative market share. In these dimensions, I examine virgin polymers and recycled plastics separately. László Bűdy CEO, myCeppi Europe’s polymer and plastics markets are in crisis: demand is weak, virgin polymer production is shrinking, and ambitious recycling targets clash with technological limits, pushing many companies into bankruptcy. Can the industry still escape this strategic trap? Plast Echo34Europe’s share of world virgin polymer production decreased from 27.5% to around 10.4% from 2002 to 2023. This decline would likely continue in 2024 and 2025. In just a few weeks, we will see the 2024 figures clearly on the K trade fair. The main source of the share decline was primarily the doubling of world polymer production in 21 years. In- vestment outside Europe has been driven by two main drivers: on the one hand, rising consumption, mainly in Asia and China, driven by rising living standards. On the other hand, exports based on cheap feedstock can create products and production in the Middle East, Central Asia, Siberia and North America. The latter largely considers Europe as their target market. But Afri- ca and Turkey are also important target markets for polymer producers in the Middle East and North America, where they have to compete with European producers. In a growing market, losing market share was not surprising. However, it is worrying that European virgin polymer production volumes have fallen by 19.7% compared to 2018, and for the first time this mil- lennium, fell deep below 50 million tons to 42.9 million tons in 2023. Total European virgin polymer production is likely to be below 40 million tons by the end of 2025, with some estimates suggesting that announced European plant closures could see production below 30 million tons in 2026. This means that we have gone back 30 years in terms of production volume, to the 90s of the last century. If we consider the entire European virgin polymer production as a whole, we see the following strategic shifts in position. Between 2002 and 2011, the global polymer market grew rapidly, with Eu- rope’s market share being high, above 20%. It was a “Star” in terms of its stra- tegic position. Between 2011 and 2018, the expan- sion of the global polymer market slowed, but Europe was able to main- tain its production volume and the profitability of polymer production. These were the golden years for the European polymer industry, with high world market share, moderate growth and very positive spreads, not only for the polymer industry but also for the plastics industry. In terms of its stra- tegic position, both the polymer and plastics industries were cash cows. Since 2018, the commodity polymers market has come under pressure due to the entry of new North American, Russian and Far Eastern capacities. The simpler, easily substitutable poly- ethylene, polypropylene, polystyrene and PVC grades have faced significant price competition. As it became clear that Europe could not win the compe- tition in the commodity market with- out cheap feedstock, the strategic po- sition changed to “dog”, the dead dog, by 2018. However, COVID intervened and the general downturn was followed by two prosperous years, not due to improved competitiveness but to a temporary tightening of global sup- ply chains. Once again, the European 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 0 50 100 150 200 250 300 350 400 450 2002200920112014201820212023 (market share) (million tonnes) European virgin polymer production share on world market European virgin plastics productionWorld virgin plastics productionEuropean production share Data source: Plastics Europe, Plastics – the fast Facts 2024 International Edition – K 2025 35Plast Echopolymer industry has become a cash cow. Global logistics problems have been partially solved. Meanwhile, the war in Ukraine broke out and Europe began to restructure its energy supply. It has largely moved away from cheap Russian oil and gas and started to build up a new supplier network. We are in the process, the procurement resources are in place, but optimisa- tion will take years. Thus, European industrial electricity prices are two to three times higher than those in China or North America, while natural gas prices are three to four times higher. Europe is now at a disadvantage not only in terms of feedstock but also in energy costs. The strategic position of European polymer production has become a “Question Mark”. The answer has started to come from global polymer producers, with a significant wave of polymer capacity closures, mainly in Western Europe, starting and acceler- ating. These trends seem irreversible, with Europe losing its role in the global virgin polymer market. But this is not just a market issue, it is also a struc- tural one. Polymer factory closures will have repercussions, complex, long-estab- lished chemical value chains will be shut down, which will also affect many other areas, including the now thriv- ing Consumer Chemicals and Special- ties areas. Decisions have been taken or will be taken in the last quarter of 2025. Naphtha processing has already fallen back to the level of the 90s. Fewer and fewer processable mole- cules will be produced. European pro- duction of virgin polymers is expected to decline significantly by the end of 2026, with Europe’s share of the world market falling well below 10%. However, Europe has prepared and responded to the deterioration of its strategic position visible since the mid-2010s: Out with the old, in with the new! Let’s have a circular econo- my! Let’s bring recycled plastics and molecules that can be kept in circula- tion for a long time. The strategic concept is simple: the global environmental drive will see the market for recycled plastics grow sig- nificantly, and Europe, as an early en- trant and innovator, can develop and maintain a high market share both in the near and distant future. Thus, ini- tially a “Star” can take up “Cash Cow” positions later on. The planned high market share was achieved, but the creators of the strat- egy did not take into account two im- portant factors. One is that “greening” is not a global trend, at most at the lev- el of words. We are alone, the green- est market is Europe, so recyclers from other continents also look to Europe as a target market. The competitive conditions are similar to virgin poly- mers, cheaper feedstock (waste) and cheaper energy costs. The other thing the strategist did not take into ac- count is that this product is not ready, as most mechanically recycled plastics are still only a limited substitute for virgin polymers. The biggest problem with mechanical recycling is that only in exceptional cases (PET) can we return to the origi- nal product. That is, we can no longer produce the same quality product from the starting plastic product – for example, film waste. The other big problem is that the scale of recycling is much smaller than the scale of plas- tics production, but if you look at it by application, the difference can be two or three orders of magnitude smaller. And the reason for this is not capacity. We can boldly state that there is suf- ficient recycling capacity, but there is not enough high-quality, processable waste, and for the waste and regranu- late that there is, there is no market that ensures adequate profitability. For the time being, recycling of poly- ethylene and polypropylene, for ex- ample, seems to be a failure compared to the plans – the biggest problem is that meanwhile very sympathetic and binding rules are coming into force from 2030, especially for packaging materials, with a mandatory recyclate content of 10–30%. With this legis- lation in place, hundreds of recycling companies have been set up and re- cycling machinery manufacturing has boomed. However, the available technology – mechanical recycling – does not seem to be able to meet the targets set by EU-level legislation. Moreover, the high energy costs and the limited availability of good quality waste make Stars Cash Cows Question Marks Dogs Market Share Market Growth Rate High Low High Low 1990 - 20022022 - 2023 2010 - 2018 2021 - 2022 2018-2021 Strategic position of European produced polymers by period Plast Echo36Discover your advantages With a whole lot of new functions, the portal offers you numerous ways to reach your goals blazingly fast – and all this 24/7 in up to 20 languages. Experience the magic of the portal, where designing is astonishingly easy and a fantastic all-round service awaits you! ›Blazingly fast to your goals ›Astonishingly easy designing ›Fantastic all-round service Experience the magic! www.meusburger.com/portal-en Enter the magical world of the new Meusburger portal. Experience the magic of the portal DÜSSELDORF 08. − 15.10.2025 Hall 1, Stand C30the activity unprofitable. This explains the wave of bankruptcies that has dec- imated recyclers. So what is the strategic position of Eu- ropean plastic recycling now? It seems that the environment is out of the global focus. The new US administra- tion’s priority is to increase industrial production rather than protect the environment. The emerging countries of the Global South are now awash in cheap Russian oil, they want to make money, they want to develop. They would rather sell petrochemical prod- ucts, polymers, to Europe at cheap prices. It is no coincidence that no agreement was reached on the Global Plastics Pact. Global recycling growth looks set to slow from 2022 to 2023, with recy- cling volumes up by just under 2% and global virgin polymer production up by 3.3%. It would be logical to conclude that, although the market is grow- ing slowly, the European recycling industry has a high share of the mar- ket, making it a “cash cow” position. However, it is a strange contradiction to call an industry a cash cow when it has serious profitability and cash flow problems. The strategic position of Eu- ropean recycled plastics is outside the BCG matrix. It is no coincidence that many people prefer to close recycling plants. Can the declaration presented above provide a solution? Not a fundamental solution, as Europe is open to lower cost regranulates, flakes and waste. Imports are needed to meet future high recycled plastic targets. Imported regranulates are more competitive than European ones. The contradic- tion is clear: ambitious targets are killing the European plastics recy- cling industry. So what can we do? For recycling, the global context must be forgotten! Europe cannot solve the global problems of plastics, especially as its market position and advocacy capacity is steadily weakening. We Data source: Plastics Europe, Plastics – the fast Facts 2024 Stars Cash Cows Question Marks Dogs Market Share Market Growth Rate High Low High Low from beginning later and for a long time Planned strategic position of European produced recycled plastics 26,5% 27,0% 27,5% 28,0% 28,5% 29,0% 29,5% 30,0% 30,5% 31,0% 0 5 10 15 20 25 30 35 40 201820192020202120222023 (market share) (million tonnes) European recycled plastics production share on world market European recycled plastics productionWorld recycled plastics productionEuropean production share Plast Echo38need to limit the recycling to geo- graphical limits. From European waste, European re-granulates. Similar to the ban on the export of plastic waste, a ban should also be introduced on im- ported waste, shredded and recycled materials. Everyone should be respon- sible for their own rubbish and waste! However, the resulting reduction in waste and regranulates will not cover the ambitious mandatory recycled material content requirements already enshrined in law. Legislation on plas- tic recycling needs to be rethought. It has to be accepted that, contrary to the name “plastics”, it is not nearly as flexible as the legislators thought. Molecules cannot be kept in circula- tion for very long. We need to do away with illusions, and finally make room for physics and chemistry. Dispelling the illusions about recy- cling will both disappoint the public and probably harm political interests. However, it does provide an opportu- nity for European plastic recycling to survive and become profitable. But if we stick to dogma, we will also lose the recycled plastic market, and very quickly, before 2030. It could easily happen that European recycling targets will be met with regranulates from the Far East or Africa. If we can remain flexible and have the courage to rethink, we can protect the European plastics market and create a semi-circular process that is in line with reality. • READY FOR THE FUTURE OF YOUR BUSINESS. FROM POST-CONSUMER PLASTICS TO HIGH-QUALITY RECYCLATE READY FOR A REVOLUTION IN MECHANICAL RECYCLING. DÜSSELDORF, GER | 8 TH - 15 TH OCT HALL 9 | BOOTH B17/B19 OUTDOOR AREA CE-02 MEET US @ K SHOW 2025 Stars Cash Cows Question Marks Dogs Market Share Market Growth Rate High Low High Low Real strategic position of European produced recycled plastics International Edition – K 2025 39Plast EchoNext >