The EU Will Strongly Push The 'Circular Economy Act' in 2026, And Recycled Plastics Will Have A Separate Customs Code!

On December 23, the European Commission officially announced the first batch of circular economy pilot action packages, clearly stating that the Circular Economy Act will be launched in 2026, accelerating Europe's transformation to a circular economy through multiple measures such as optimizing the plastic recycling system, breaking down market barriers, and strengthening fair competition, bringing major development opportunities for the plastics industry to reduce emissions, increase efficiency and expand capacity.

As the core of this reform, the Circular Economy Act will build a horizontal and unified policy framework, focusing on improving the single market operation mechanism for recycled raw materials, and solving the current outstanding problems faced by the European plastic recycling industry, such as market fragmentation, different standards, and insufficient investment. The European Commission said that the introduction of this bill is a key measure to fulfill President von der Leyen's promise in the 2025 State of the Union address, and is also highly consistent with the core proposition of the Draghi Report to "strengthen industrial competitiveness through circularity and resource efficiency".

The pilot measures launched simultaneously have taken the lead in focusing on the pain points of the plastics industry.

In terms of market integration, the EU will formulate unified plastic waste end standards, clarify the identification norms for the reuse of recycled materials, simplify the administrative process of small and medium-sized enterprises, and ensure the stable supply of high-quality recycled materials throughout Europe. For PET disposable beverage bottles, special rules for recycled ingredients will be introduced to open up market space for chemical recycling enterprises and promote the complementary development of chemical recycling and mechanical recycling. At the same time, the "Recycling Plastics Alliance" will be restarted and upgraded to a cooperation platform for the whole industry chain, uniting the strength of government and enterprises to solve common problems in the industry.

In order to create a level playing field, the EU will also set up separate customs codes for virgin and recycled plastics, strengthen the supervision of imported plastics, and carry out dynamic monitoring of the global plastics market, which will provide a basis for the formulation of corresponding trade measures, so as to ensure that plastic products produced in the EU and imported plastic products can develop on a level playing field. The European Commission will assess the implementation of these measures in 2026.

In terms of investment incentives, the EU will work with the European Investment Bank and financial institutions to support the construction of cross-regional circular economy centers and promote cross-border cooperation and large-scale application of technological innovation through the establishment of a "competitiveness coordination tool" pilot.

According to the European Commission's Joint Research Centre, circular economy solutions will bring significant benefits to the plastics industry: adopting a circular economy model can reduce the industry's carbon emissions by 45%, decarbonize energy use, and increase the industry's trade surplus by 18 billion euros by 2050. This prospect will effectively alleviate the current difficulties faced by EU plastic recycling enterprises such as insufficient capacity utilization and financial losses, and inject lasting development momentum into the industry.

It is worth noting that the EU has launched a public consultation on the implementation effect of the Single-Use Plastics Directive, widely soliciting opinions from all parties until March 2026, providing a basis for subsequent policy optimization. Currently, the use of recycled materials in the EU has only increased from 11.2% in 2015 to 12.2% in 2024, and the implementation of the Circular Economy Act will become a key engine to accelerate the improvement of this indicator, helping the EU achieve its strategic goal of becoming a global leader in the circular economy by 2030.