Circular Economy in Packaging: How Circulary is the Industry Today – and What Are the Biggest Obstacles?

Whether the circular economy works in practice is particularly evident in the case of packaging. High material flows and short usage phases make it clear where circular systems work – and where they fail due to systemic barriers. With the EU Packaging Regulation (PPWR), which comes into force in August 2026, the pressure on manufacturers is set to increase further: recyclability, the use of recycled materials and design requirements are becoming increasingly mandatory.

In practice, the picture is more nuanced: alongside established circular systems such as the PET deposit scheme, there are numerous packaging solutions which, whilst in principle recyclable, are only recycled to a limited extent in practice.

The reasons for this rarely lie in a single factor, but rather in the interplay of several challenges:

• Material diversity: multi-material and multi-layer packaging complicates recycling
• Design decisions: Colours, additives or barrier layers affect sortability and recyclability
• Infrastructure: Collection and sorting systems vary from region to region
• Economic viability: Recyclates must be competitive in terms of both quality and price

The key insight: Circular economy is a systemic issue – not merely a question of materials or technology alone.

Concrete approaches along the value chain – from design and recycling to new materials – show how the gaps in the cycles can be closed.

Packaging design is a key factor. Design for Recycling means designing packaging in such a way that it can actually be captured and recycled to a high standard within existing sorting and recycling processes.

Greiner Packaging demonstrates exactly how this works in practice with the K3® r100 cup: Traditional cardboard-plastic combinations pose challenges for recycling, as the materials often cannot be reliably separated. With the K3® r100, however, the cardboard sleeve and plastic cup separate from one another automatically during the collection process through mechanical action – for example, when being compressed in the refuse collection vehicle. Both materials can then be collected separately at the sorting plant and processed further.

This approach is complemented by further design decisions such as single-material solutions, reduced decoration and technologies such as digital watermarks.

Context: Design for Recycling means taking real-world process steps – from collection to sorting – into account. Only when packaging is designed with this in mind can high-quality recycling loops be established in the first place.

Recycling faces particular challenges with multi-layer packaging: different layers of material are firmly bonded together and, until now, could not be separated. In practice, this often meant the end of material recovery.

A new approach, on which Krones is working together with BASF, Südpack and TOMRA, addresses precisely this issue: at its heart is a specially developed laminating adhesive that can be selectively dissolved during the recycling process.

The key breakthrough lies in the fact that this separation takes place within the existing recycling process: After shredding and washing, the adhesive is dissolved in hot washing liquor; the materials separate and can be transferred to their respective material streams via density separation. This makes it possible, for the first time, to recycle certain multi-layer packaging without having to build entirely new infrastructure.

Context: This example demonstrates how targeted material and process innovations can push the boundaries of existing recycling capabilities. At the same time, the approach remains limited to specific types of packaging – thereby underscoring the central role of design and material selection in ensuring functional circular systems.

Geopolitical uncertainties and rising raw material prices are increasingly bringing alternative materials into focus. Environmental considerations also play a role here – particularly in the case of packaging solutions that are currently difficult to integrate into existing recycling systems.

One example is Storopack's RENATURE® Wrap: this protective packaging is made from plant-based starch derived from yellow pea residues and is designed for applications where traditional plastic solutions such as bubble wrap reach their limits. The material is versatile, can be shaped without adhesive by simply moistening it slightly, and can be reused multiple times.

At the same time, the approach opens up additional recycling pathways: RENATURE® Wrap is certified as home-compostable and replaces fossil-based plastics with bio-based raw materials.

Context: Bio-based materials specifically expand the circular economy where existing recycling solutions reach their limits. However, their contribution remains dependent on application, infrastructure and usage.

Examples from the packaging industry show that circular economy is no longer a concept for the future – the first viable approaches are already in place. Whether in design, recycling or new materials, solutions are emerging across the entire value chain.

At the same time, it is clear that its full potential is only realised through collaboration. When design, infrastructure, technology and regulation are coordinated, individual approaches can develop into functioning circular systems.

For packaging manufacturers, product developers and plastics processors, this means: the foundations have been laid – now it is a matter of further developing these approaches, scaling them up and integrating them systematically.