The decline in production in the European plastics industry is not caused by a reduction in demand, analysis by Plastics Europe members suggests that the main cause is an increase in imports of plastic resins, which are cheaper than those produced in Europe
Plastics production in the old continent is going through a period of recession, and although some might think that this trend is good news, the truth is that the decrease in plastics manufacturing in Europe threatens sustainability, circularity and competitiveness.
According to an analysis by Virginia Janssens, Managing Director at Plastics Europe, some of the main factors putting sustainability at risk in the short and medium term include:
- Cheaper imports
- Regulatory uncertainty
- Oversupply from other continents
Janssens highlights that urgent policy measures, such as regulatory simplification, investment support and energy grid upgrades, are vital to ensure jobs, autonomy and environmental goals in the plastics industry.
The 2024 outlook
The year 2024 marked a setback for the European plastics industry. Recent data shows that compared to 2023, plastics production in the European Union fell by 8.3%, while recycled plastics manufacturing decreased by 7.8%. Globally, plastics production increased by 3.4%, leaving Europe with just 12% of the world market, an alarming figure considering that in 2006 it had 22%.
Less plastic, more sustainability? A false perception
Although this drop may seem to reflect a lower use of single-use plastics, the reality is different. The decrease is not due to a reduction in demand, but to the increase in imports of cheaper resins. These resins are usually manufactured in regions with much lower environmental standards and energy costs, which generates a more severe global environmental impact.
In addition, the overproduction of virgin plastics in foreign markets has reduced their prices, making recycled alternatives economically unviable. This puts the transition to circularity in jeopardy and threatens the competitiveness of European industry.
Plastics: essential for the future of Europe
Plastic is the third most used material in Europe, after concrete and steel. It is crucial for industries such as healthcare, automotive, construction and renewable energy. A strong plastics industry in Europe not only fosters innovation, but is also key to achieving climate and sustainability goals.
Loss of competitiveness in this sector will not only impact the economy, but also the strategic autonomy of the continent. Currently, the plastics value chain in Europe supports more than 1.5 million jobs and generates more than €365 billion in annual revenue.
In 2023, Plastics Europe presented “The Plastics Transition”, an ambitious roadmap to achieve circularity and net-zero emissions by 2050. However, the success of this vision depends on a clear regulatory framework and political support from the European Union and its Member States.
Urgent measures to save the European plastics industry
To ensure the future of the industry and its transition towards sustainability, Plastics Europe considers it essential to implement concrete political measures, such as:
- Simplifying regulations: Streamlining authorisation processes and establishing uniform rules for plastics across the EU.
- Fostering competitiveness: Creating separate customs codes for virgin and recycled plastics, levelling the playing field against imports.
- Stimulating investment: Ensuring an enabling environment for the development of recycling infrastructure.
Without decisive action, Europe risks losing its leadership in sustainability and circularity.