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Light, resistant and long-lasting: plastic plays an important role in the economy – not only as a packaging material, but also as an alternative to metal, for example in the construction and automotive industries.

At the same time, the way plastic is currently produced and disposed of is harmful to the environment. The consequences range from high CO2 emissions to pollution of the oceans. To counteract this, the European Union plans to reduce the landfilling of plastic waste as part of its Green Deal. By 2030, 55 per cent of plastic packaging waste is to be recycled.

This plan has far-reaching consequences for businesses, as our white paper "The green deal. A game changer for the waste management and plastics industries".

Quotas for the use of recycled plastic

In order to move towards a circular economy, the EU also wants to promote the use of recycled plastic in the production of new products. The European Commission is expected to introduce minimum quotas for the use of recycled plastic content in new products by 2022. These quotas would be mandatory for the plastics processing industry and are expected to be between 15 and 30 per cent.

Achieving these targets will require major investments throughout the plastics value chain. This is because the impact could significantly reshape waste management, recycling and the plastics manufacturing industry.

Consequences for companies

For example, the introduction of quotas will mean that the plastics processing industry will have to adjust its production in order to use more recycled plastics. As a result, the demand for high-quality recycled plastic will increase significantly. Since high-quality plastic has been very scarce so far, the increase in demand could lead to significant price increases.

The EU regulations are also likely to have significant consequences for the waste management and plastics industries. The increased demand for recycled plastic, for example, is likely to have a positive impact on sorting companies because the need to separate plastic from residual waste will rise sharply. New plastic manufacturers, on the other hand, should rethink their corporate strategy. The increasing use of recycled plastic could reduce their market share.

"An important step towards strengthening recycling"

"The concept of the circular economy comprises five core principles: Reduce, Repair, Reuse, Refurbish and Recycle," says Dr Christian Lumpe, Partner at KPMG. "The new EU regulations are an important step towards strengthening recycling. Companies in the affected industries should prepare for the new regulations - and at the same time prepare their business models for the comprehensive implementation of the Circular Economy."

"There are great economic opportunities for investors and organisations that adapt to the transition to the circular economy at an early stage," adds Dr. Julian J. Rossig, Senior Manager at KPMG.

Read more about what lies ahead for the waste management and plastics industries in detail and what companies should do now in our whitepaper.

You can also find more on the topic of circular economy in the whitepaper.