Countdown to shipment ban

Europe’s new waste shipments regulation is now in force but it will take over two years for the full effects to be felt in the export business.

The European Union’s new Waste Shipments Regulation was adopted on 11 April and entered into force on 20 May. This was much awaited as it establishes what restrictions will be implemented for the shipment of plastic waste between Europe to the rest of the world.

The new regulation will change the shape of the plastic scrap and recycling industry across the world. The regulation specifies that plastic waste cannot be shipped out to any non-OECD country 2.5 years after the effective date of the regulation.

That means an outright export ban from Europe to non-OECD countries from 21 November 2026. This will apply significant pressure on the European market as such goods will then have to find a home either in Europe or in OECD countries only.

Additionally, exports to OECD countries will have to operate under a notification process from May 2026, meaning the receiving markets have to proactively say they are willing to receive the scrap and the exporters have to be satisfied their material will be processed appropriately.

VOLUME CHALLENGE

The requirement for notification approved from a third country brings its own challenges. Traders expect their business to shrink in breadth, possibly limited only to movements within Europe. This would put pressure secondary plastic prices as availability is likely to be high in comparison to the available recycling capacities currently within the EU.

It remains to be seen how far the European recycling industry can evolve to consume these new, additional volumes and the challenge will also be to have sufficient demand for recycled granules within Europe.

This regulation will also affect Asian recyclers, most of whom are dependent on imports from third countries and Europe is one of their largest suppliers. This business shift will give an advantage to other than European countries who will be able to keep on exporting to Asia. Asian recyclers are likely to switch their purchasing to such countries.

HIGHER PRICES

June started with a positive demand for plastic waste in the European market with regional recyclers ready to pay higher prices to get their material. Asian recyclers, however, were not so keen to pay such prices. The main reason for the high prices has been a shortage in the availability of materials in the European market.

Most waste management companies are complaining of low input available for sorting. Some say their collection rates have fallen by up to 30% in comparison to 2023. Low collection is attributed to changes in spending habits and lower consumption.

Crude oil prices have remained steady in the last two months, moving in the range of US$ 78 – 80 per bbl. Nor have prime plastics prices seen much movement. This is a sign of stability in the market and therefore European recyclers are keen on securing material.

Read the full plastics market analysis in our latest issue >>