7 Reasons Why Recyclates Are Becoming More Relevant for Companies

Recyclates are gaining increasing importance in the plastics industry. What was long regarded primarily as a sustainability topic is today evolving into a strategic question for product development, material sourcing, and competitiveness.

Recyclates are reprocessed plastics recovered from used products or production waste and reused as raw materials. For a long time, they were viewed mainly as a tool for greater sustainability. Today, that perspective is shifting. Rising regulatory requirements, new expectations along the supply chain, and the growing importance of the circular economy are making recycled materials a strategic issue for many companies.

At the same time, raw material markets are coming under increasing pressure. Many plastics are made from crude oil and natural gas. As a result, geopolitical crises, rising and volatile energy prices, and uncertainties in global supply chains directly affect the cost of plastic granulates. This is bringing recyclates into sharper focus — not only from an environmental standpoint, but also as a building block for a more resilient and diversified raw material supply.

The point is not to replace virgin plastics across the board. In many applications, virgin plastics remain indispensable — for instance, where specific material properties, high purity, or particular certifications are required. At the same time, recyclates are gaining ground as an additional material option.

For product developers and material decision-makers, the question is therefore arising more and more frequently: what role can recyclates play in a company’s own material strategy going forward? The following seven reasons illustrate why recyclates are becoming ever more relevant for companies.

The regulatory framework for plastics is changing noticeably. At the European level in particular, the circular economy is moving increasingly to the fore.

The Packaging and Packaging Waste Regulation (PPWR) introduces new requirements for recyclability and recycled content in packaging, among other things. ESG reporting obligations and sustainability requirements along the supply chain are also gaining in importance.

For companies, this means that material decisions will no longer be evaluated solely on technical and economic criteria. Regulatory requirements are playing an increasingly significant role. Companies that engage with recyclates early can build up experience and integrate future requirements more smoothly into existing processes.

Our tip: Read more on this topic in our article “PPWR Compliance: A Challenge for Manufacturers – How Can AI Help?”

Many companies today are pursuing concrete climate targets. This is bringing into focus the question of which materials are used in products and packaging. Depending on the type of material, its origin, and the processing method, recyclates can have a lower carbon footprint than comparable virgin materials. A blanket statement is not possible, however, as the actual climate balance depends on a large number of factors.

Nevertheless, recyclates are increasingly being seen as a way to make resource use more climate-friendly and reduce emissions along the value chain.

Plastics are frequently based on fossil raw materials. At the same time, materials that have already been used contain valuable resources that can be deployed again after use. Recyclates help to keep these materials in the economic cycle for longer. This allows primary raw materials to be partially substituted and existing resources to be used more efficiently.

Against the backdrop of rising demands for resource efficiency, this aspect is becoming increasingly relevant for many companies — not only from an ecological perspective, but also from a strategic one.

In many industries, sustainability is evolving from a differentiating feature into a concrete requirement.

Particularly in the areas of packaging, consumer goods, and branded products, customers are increasingly asking about:

• recycled content
• material origin
• recyclability
• reliable sustainability data

In the B2B sector, too, pressure along supply chains is growing. Companies are increasingly required to demonstrate how sustainable their products and materials actually are. Recyclates can help meet these requirements and provide additional options for customers.

The rising demand for recycled materials has triggered numerous technological developments in recent years.

These include, among others:

• advanced sorting technologies
• improved processing methods
• new material compounds
• digital traceability systems
• design-for-recycling concepts

Design for recycling in particular is gaining in importance. The recyclability of a product is determined at the development stage. Packaging or components made from many different materials are often difficult and costly to recycle. Recyclates therefore promote not only new materials, but also new ways of thinking in product development.

Using recyclates often requires new competencies.

Companies need to address questions such as:

• Which recyclate qualities are available?
• Which material properties are relevant?
• How stable are supply chains?
• Which regulatory requirements apply?
• Which applications are technically viable?

Companies that start gaining experience today are building knowledge that could become a significant competitive advantage in the future. Many market observers expect that recyclates will increasingly shift from an optional material to a firm requirement in certain industries in the years ahead.

For many companies, using recyclates is now more than an environmental measure.

It can contribute to:

• making sustainability targets measurable,
• meeting regulatory requirements,
• addressing customer demands,
• reducing risks in raw material procurement, and
• strengthening market positioning.

Transparency is key. Companies must be able to document in a traceable manner which materials are being used and what impact they actually achieve. A credible sustainability strategy is built not through individual measures, but through coherent decisions along the entire value chain.

Despite their growing importance, challenges remain.

Not all recyclates are available in sufficient quantities or with consistent quality. Yet many applications require stable material properties over many years.

Many modern packaging formats consist of several types of plastic bonded together. This makes sorting more difficult and increases recycling costs..

Cost is a frequently underestimated factor. Sorting, cleaning, and processing plastic waste is technically complex and energy-intensive. Separating different types of plastic and producing high-quality, largely mono-material recyclates involves considerable additional effort.

At the same time, recyclates are also subject to the mechanisms of the raw material market. Supply and demand, energy prices, global supply chains, and the availability of suitable material streams all influence price trends. High-quality recyclates can therefore sometimes be more expensive than comparable virgin materials. Economic viability thus remains an important consideration for companies when selecting materials.

In sensitive areas such as food packaging, medical devices, or certain technical applications, additional regulations apply that may restrict the use of recyclates.

For many companies, the key question is therefore no longer whether recyclates will become relevant, but where and how they can be used effectively — and who builds up the necessary knowledge early enough.