What’s happening? The European Court of Auditors (ECA) has found that only nine EU member states are on track to meet 2025 recycling targets, with Austria, Belgium, the Czech Republic, Denmark, Germany, Italy, Luxembourg, the Netherlands and Slovenia leading. The EU aims for a 55% municipal waste recycling rate and 65% for packaging waste. However, poor enforcement, limited public funding and a weak recycling market are hindering progress. In 2022, bio-waste and paper/cardboard made up 55% of municipal waste. Transport distances for recyclables exceeded 900 km in some cases, demonstrating inefficiencies and added environmental costs in the waste management system. (Euronews)

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Why does this matter? Municipal waste – produced by households, shops and offices – made up 27% of the total waste produced in the EU in 2022, according to the ECA’s report. Bio-waste accounts for most at 37%, followed by paper and cardboard (18%), plastic (10%), glass (8%) and wood (8%). Metals, textiles and e-waste feature to a lesser extent, although still a significant problem. In 2023, the average amount of municipal waste generated per person reached 511 kg, of which 48% was recycled, 25.2% was incinerated and 22.5% went to landfill. Managing this waste stream is complex due to its diverse composition and proximity to people and the associated environmental and health risks.

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Stumbling blocks – The EU first established its waste policy in 1975 and, over time, this has shifted from landfill and incineration to re-use and recycling. Municipal waste management targets were strengthened by amendments to the Waste Framework Directive, the Packaging Waste Directive and the Landfill Directive in 2018. Other legal requirements include expanding national waste management plans, economic instruments to encourage recycling, such as deposit return schemes or disincentives, including landfill taxes, alongside increasing separate waste collections. Insufficient monitoring and enforcement, lack of public funding and difficulties in implementing these measures mean that many EU member states continue to send much of their waste to landfill, stalling the bloc’s ambitions to achieve a circular economy.

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Plastic problem – A critical challenge is a lack of infrastructure. Plastic recycling facilities in particular are closing at an alarming rate, with Plastics Recyclers Europe (PRE) recently warning that the sector could collapse without prompt action. The trade association highlighted that the continent – including the UK – will likely have lost almost one million mt of capacity since 2023 by year-end.

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Creating fairness – Meanwhile, a group of 111 organisations involved in Europe’s plastic value chain issued a statement in November calling on EU policymakers to address the cost imbalance between virgin and recycled plastics, ensure recyclers’ profitability through fair and supportive market mechanisms and improve import and quality standards. They also urge for the Packaging and Packaging Waste Regulation (PPWR) – set to enter force in mid-2026 – to drive a circular and competitive recycling market. The PPWR aims to overcome the fact that 40% of plastics used in the EU are in packaging, while half of marine litter comes from packaging.

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Economic opportunities – In the UK, legislative gaps make it cheaper for plastic waste to be exported than for it to be recycled domestically. The country ships some 600,000 mt annually and exports to developing countries, which often lack processing capacity, rose by 84% in the first half of 2025. Not only does this exacerbate the environmental challenges these nations face, but it also means that the UK is missing an opportunity. Ending exports by 2030 would create 5,400 jobs and see 15 new recycling facilities built, supported by over £800m ($1bn) of private investment. As a result, nearly £900m of economic value could be unlocked annually, bringing around £100m in additional tax revenue every year. Notably, the EU has already agreed to stop sending plastic waste to non-OECD countries.

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Bottom line – Beyond plastics, the EU must incentivise the construction of additional recycling facilities for all types of waste and further encourage households and businesses to take greater responsibility for separating materials before discarding them. It must also toughen up policies regarding monitoring and enforcement and address funding barriers. These will form a key part of the success of the Circular Economy Act, which is set for adoption in 2026 and seeks to build a single market for secondary raw materials, boost the availability of high-quality recycled materials and stimulate demand for these resources across the EU.