The U.S. plastics recycling and reclamation market faces three major challenges in 2025: trade uncertainty, new capacity additions, and weak consumption. And, Trump's tariff policy is likely to hit the U.S. recycled plastics ecosystem. In addition, Coca-Cola's downward revision of its packaging sustainability goals could spark others to follow suit.
1. Impact on the U.S. plastics recycling market
U.S. plastics recycling is highly regional, with the U.S. trading closely with neighboring countries such as Canada and Mexico, and many recycling companies treating the border as a state line. The trade uncertainty brought about by Trump's tariff policy has caused recycling enterprises with close regional ties to Canada and Mexico, as well as related buyers, to assess the potential impact, and those relying on cross-border raw material supply may face increased raw material acquisition costs, obstruction of supply channels and other issues, which will in turn disrupt the normal functioning of the recycling market.
2. Inflation 2.0 may affect the demand for recycled materials
The consumer recycled plastics market for 2025 is flat as the U.S. economy and consumers continue to be plagued by inflation. Inflation has stagnated and inflation could rise again, which could pull down the demand for consumer or durable goods, and thus the demand for recycled resins, affecting the size of the market demand for the recycled plastics industry and hindering its further growth. However, some companies may push for an increase in the proportion of recycled content because of voluntary targets for companies, etc.
3. Challenges to new capacity for chemical recycling
While there is new capacity coming on stream in the U.S. recycling sector in 2025, and companies like Blue Polymers and NOVA Chemicals have new plants and businesses to start, some of these have been postponed given the economic situation, as it can be quite difficult to make investments in this sector. In addition, new capacity may also tighten the feedstock supply pool, and exports of products from new capacity may be limited due to tariffs and mutual boycotts, affecting companies' profit expectations and further expansion plans.
Blue Polymers, a joint venture between Republic Services and Ravago, will start up two plants in Arizona and Indiana.
Nova Chemicals will open a large film plant in Indiana.
Myplas will restart a film recycling plant in Minnesota.
Direct Pack will start up some rPET processing operations.
4. Impact on international cooperation on recycled plastics
The U.S. rPET industry relies heavily on trade with Asian and Latin American countries, and the tariffs and other boycotts triggered by Trump's protectionist measures could undermine this international partnership and deprive the U.S. of an important source of raw material imports as well as export markets for its products, for example, it may be difficult to fill the raw material gap for PET bottles that was originally made up by imports, and it may also lead to oversupply due to the restriction on exports of virgin polyethylene, with a spillover to the recycled resin market.
5, Coca-Cola or trigger other brands to follow suit
Coca-Cola's December 2024 announcement of a downward revision of its 2030 packaging sustainability goal could set a trend. The company aims to use 35-40% recycled materials in its packaging by 2035; the previous target was 50% by 2030.
Coca-Cola has been a leader in the recycled plastics space, and the fact that it's making such a pullback at the end of 2024 makes one wonder if other brands might consider slowing down as well, according to Friedman. A significant barrier to the adoption of recycled content remains price pressure and the cost of rPET compared to virgin resin. The Ellen MacArthur Foundation's latest Global Commitment to Sustainability report has confirmed that progress on sustainability is stalling.
