Cost reductions give new life to the Netherlands’ Plastic Recycling Industry

The mechanical recycling sector in the Netherlands is under significant pressure. Bankruptcies continue to mount, while European legislation such as the Packaging and Packaging Waste Regulation (PPWR) requires increased use of recycled plastics. Without intervention, crucial infrastructure for a circular economy will disappear—along with the Netherlands’ leading position in Europe on circular plastics. New research by Copper8, SD&Co, Verpact and Invest-NL shows that structural cost reductions are needed to make the recycling sector both profitable and future-proof.

First assessment of policy measures

For the first time in the Netherlands, a system dynamics model was used to calculate the impact of various policy measures on the profitability of mechanical recyclers, CO₂ emissions, and the use of recycled material. The research focuses on the stream of household plastic packaging waste (often referred to as “LDPE”) that is collected through the Extended Producer Responsibility (EPR) system and mechanically recycled. The results show that, without structural cost reductions, Dutch recyclers cannot compete. Examples of effective interventions include subsidies to cover unprofitable production costs or fiscal incentives that provide recyclers with a level playing field compared to virgin plastics.

In total, ten policy measures were evaluated, including a CO₂ levy, price measures, technological innovation, and import restrictions. However, without structural cost reductions, these measures remain insufficiently effective.

Root causes: high costs and import competition

In 2024, seven Dutch recyclers went bankrupt. In 2025, several production lines were shut down. Dutch recyclers face high energy prices, stricter environmental regulations, relatively contaminated waste streams, and comparatively high labour costs. At the same time, imports of low-cost recycled plastic from countries such as China and the United States are increasing. As a result, Dutch companies struggle to compete—even though investments in quality and circularity are urgently needed.

More is needed than subsidies alone

While cost reduction is crucial, other conditions are also important for creating a healthy recycling market: increased demand for recycled plastics, higher-quality waste streams, and technological innovation to improve output. A coherent package of measures is required, with cost reduction as a fundamental component.

Without action, the sector will vanish

Maintaining a strong Dutch recycling sector is a political choice. Without government intervention, the sector will shrink, and jobs, expertise, and circular infrastructure will disappear. This would also jeopardise the implementation of European legislation and climate objectives. Structural financing delivers immediate benefits: lower CO₂ emissions, a fairer competitive landscape, and the opportunity to build a robust circular economy in the Netherlands.

About the research

The report “A Circular Economy for Plastic Recycling” was carried out by Copper8 and SD&Co, with input from Verpact, Invest-NL, and other chain partners. It is being published in the run‑up to the parliamentary committee debate on circular economy and plastic recycling in the Dutch House of Representatives on September 11th, 2025.

For more information, please contact Cécile van Oppen (cecile@copper8.com).