en.Wedoany.com Reported - ICIS analyst Matt Tudball recently shared insights on the current state, challenges, and outlook of the European PET and rPET industry in 2026. The PET and rPET sector is expected to enter 2026 on a relatively subdued note, following significant declines in prices and demand in 2025. However, the Iran war, starting in March, has shifted market dynamics, with supply tightness and panic buying driving PET prices up, subsequently boosting demand for rPET flakes in the sheet and thermoforming sectors. By June, market dynamics shifted again as panic buying subsided, inventories were replenished, virgin PET prices began to decline, post-consumer PET bottle bale supply increased, and war-related demand eased.
The main challenges for tray-to-tray recycling are access to high-quality feedstock and investment willingness. The PET bottle recycling market is mature, while tray structures are mostly multi-layer and multi-material, requiring specific technologies for delamination, purification, and recycling. The Iran war has improved tray bale prices, but whether the upward trend can be sustained remains unclear. The cost-of-living crisis led to weak European PET and rPET demand in 2025, with many organizations prioritizing cost savings over sustainability. Veolia's specialized tray recycling facility in the UK will bring an installed capacity of approximately 20,000 tonnes/year.
The Packaging and Packaging Waste Regulation (PPWR) poses challenges beyond PET beverage bottles. PPWR requires deposit return schemes for countries with collection rates below 90%, raising questions about the value of residual fractions in waste collection streams. Currently, PPWR only recognizes mechanical recycling of PET bottles as a suitable technology, while new technologies such as A-B-A structures require lengthy certification from the European Food Safety Authority (EFSA). ICIS estimates that the EU will need approximately 1.7 million tonnes/year of rPET by 2030 and over 3.9 million tonnes/year by 2040, with contact-sensitive applications requiring about 1.5 million tonnes/year and 3.5 million tonnes/year respectively. Current domestic mechanical recycling capacity is insufficient to meet the 2040 targets.
Between 2024 and 2025, the ICIS Mechanical Recycling Supply Tracker identified 22 plants that have closed or been announced for closure, with four projects in the PET recycling market announced for closure, accounting for about one-fifth of total recycling capacity losses. During the same period, new mechanical recycling capacity was added, with six projects expected to boost European PET recycling capacity in 2026-2027, equivalent to more than double the lost capacity.
Regarding the import of cheap rPET, the European Commission published a draft implementing act in February 2026, stipulating that from November 21, 2027, imported rPET recycled outside the EU can count toward the 25% mandatory target. However, this draft has not yet been published in the Official Journal of the European Union to take effect. Currently, at least 25% recycled content in PET bottles must come from the EU, but the remaining 75% of 100% rPET bottles may come from outside the EU, with the decision resting with end users. Whether the European Commission will adopt a similar approach in the PPWR remains to be seen.
The Iran war has caused significant PET price volatility. As of early June, virgin polymer prices began to decline in May and June but remain far from pre-war levels. Europe faces long-term supply concerns for feedstocks such as MEG and PTA, and if trade routes are further disrupted or fuel freight costs rise, the impact could extend into 2027. The effects of inflation on consumer spending vary, and it is expected to take at least another six months before the market returns to "normal."
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