How legislation is redefining the recycled plastics industry
ICIS | Corbin Olson | August 13, 2025
Legislation continues to play a pivotal role in shaping the trajectory of the recycled plastics industry. From global policy framework efforts to community-based mandates, regulatory development is targeting plastic waste reduction, increasing recycled content thresholds, and shifting supply chain dynamics to engage all stakeholders.
GLOBAL POLICY EFFORTS
Since 2022, the United Nations led Intergovernmental Negotiating Committee (INC) has convened five rounds of international negotiations to develop a legally binding framework to address and reduce plastic pollution, known as the Global Plastics Treaty. The next meeting round (INC-5.2) is located in Geneva, Switzerland, starting on 5 August 2025, where members urged to finalize the Treaty. Expectations remain uncertain as over 100 participating countries are pushing to align on the language and scope of the Treaty.
Treaty initiatives include enforceable obligations for global caps on virgin material production, recycled content thresholds, and EPR frameworks.
If finalized, the Treaty could accelerate demand for recycled materials and pressure governments and brands to invest in recycling infrastructure to support the supply chain. By harmonizing global recycling standards, the Treaty aims to generate a circular economy through utilizing legal and financial incentives for brands and governments to accelerate demand for recycled materials and investments into the supply chain.
So far, US officials have maintained a cautious stance on some Treaty concepts and are currently displaying an opposing stance towards initiatives that aim to limit virgin plastic production. Instead, expressing that production controls should be determined at a national level to emphasize cost effectiveness and job supportive solutions. This stance is similar to other oil and gas producing nations that advocate for the Treaty to focus on waste management and recycling, rather than imposing upstream restrictions that would reduce domestic jobs.
US FEDERAL LEGISLATION
While the US does not currently have an active federal policy targeting plastics recycling, there are various federal initiatives that influence the market:
US STATE POLICY
State-level legislation is creating both opportunities and compliance challenges for producers and recyclers. Mixed approaches across states have created a fragmented landscape, complicating compliance for national brands.
Highlighting key state-wide plastics recycling legislation, there is currently no overlap between the states with active chemical recycling acceptance and states with active Extended Producer Responsibility (EPR) or Post-Consumer Recycled (PCR) policies.
At this time, brands and recyclers are likely prioritizing compliance with Oregon EPR legislation, which officially launched July 2025, while similarly preparing for the rollout of Colorado and California’s EPR frameworks, both of which are scheduled to begin phased implementation this year.
State-by-state laws are transforming the US recycled plastics landscape into a patchwork of markets where recycled polymers fluctuate in value based on the local policy.
Recyclers operating in states with extensive regulations may command higher premium pricing in comparison to states with minimal policy. This may encourage regional sourcing strategies and investments in local collection and processing infrastructure.
MARKET OUTLOOK
Legislative policy is a key force shaping investments, innovation, and pricing in the plastics recycling market. As more states implement and enforce legal guidelines, producers and recyclers must adapt to evolving requirements or face legal penalties.
For instance, Washington and California PCR programs have established a penalty of 20 cents/lb for every pound of recycled content the brand falls short of the policy threshold. While still in the initial stages of implementation, stakeholders of plastics-related legislation have responded to the guidelines with a mix of urgency and caution.
Some stakeholders are quickly launching long-term contracts with partners to support circular targets, while those that tail behind cite struggles to achieve circular goals due to challenges conforming to fragmented policy, rising costs, and shortage of quality material.
While the US recycling market is currently challenged with cost-sensitive materials and uncertainty around trade policy impacts, the key driving forces of the market – such as legislation and brand sustainability goals – are expected to continue driving long-term demand for recycled materials. Specific categories such as post-consumer recycled material and food grade certified recycled material are expected to experience significant market competition with bottleneck supply constraints. As stakeholders face increased pressures to develop a circular economy, understanding and anticipating the policy and supply-chain landscape are becoming critical steps for brands and recyclers seeking to maintain compliance, competitiveness, and credibility.