Menu
Menu
The Dutch government requires that Dutch manufacturers of plastic products must use a minimum percentage of recycled plastic in the manufacture of new plastic products from 2027. This requirement precedes European regulations. As a result, Dutch plastics processors face the challenge of a shortage of high-quality recycled material and higher costs, leaving them behind foreign competitors. The result may be that plastic processing based on fossil raw materials is simply moved abroad, which undermines the path to a circular economy and the financial health of Dutch plastic processors. Although the European Union (EU) is committed to a circular economy, demand for recycled plastic has not been this low in years. Only 15 percent of European plastic is recycled, and recycling companies are seeing demand drop. The low recycling rate is always explained by the lack of incentives to switch to the cheaper new fossil plastic (“virgin”). In anticipation of new EU legislation from 2030, the Dutch government is focusing on the blending obligation that will apply from 2027 for a crucial link in the plastics chain: the plastics processor. The aim is to promote circular production; The Dutch government has previously banned the sale of disposable plastic items, and in many Dutch municipalities plastic waste is collected separately.
The Dutch government aims to reduce CO₂ emissions by reducing the use of new plastic. With the planned introduction of the NCPN (National Circular Plastic Standard), also known as the plastic blending obligation, plastic processors are obliged to “blend” a certain percentage of recycled plastic or bio-based plastic into their production process. In this way, the Dutch government hopes to stimulate the demand for plastic recyclate and bio-based plastic. The Dutch obligation is expected to be introduced in 2027 with a blending percentage of approximately 15 percent, possibly rising to 30 percent in 2030. Although the EU plans to introduce similar legislation in 2030, no clear blending percentages have yet been established. According to ABN Amro, the Dutch government’s ambition to lead the EU has major consequences for the market position of the Dutch plastics processing industry. Harold de Graaf, general director of the Federation of the Dutch Rubber and Plastics Industry (NRK), confirms this and is critical of the broader scope of the Dutch requirements. He emphasizes that the EU guidelines apply per product type, while the Dutch mixing obligation is aimed at the processor and therefore applies to all plastic products. Moreover, the mixing obligation is nationally oriented and does not apply to foreign suppliers of plastic products on the Dutch market due to the import exemption. This creates an uneven playing field for the Dutch plastics processor, which may lead to a shift of production abroad and failure to achieve the intended reduction in CO₂ emissions.
Currently, the price for plastic recyclate and bio-based plastic is significantly higher than that of virgin plastic, resulting in limited demand for recycled material. Dutch recyclers are therefore experiencing difficulties in keeping their businesses running, with even the recent bankruptcy of Dutch recycling company Umnicorp in January. There are concerns that this unfavorable price ratio will also negatively affect other recyclers, potentially leading to a reduction in Dutch sorting and processing capacity and an increase in plastic waste being incinerated. Nevertheless, the EU’s goal is to recycle significantly more in the coming years, as also described in de Volkskrant. A blending obligation at European level could be beneficial for recycling companies, but it may come too late. For the processor, the accelerated introduction of the Dutch blending obligation comes too early. First of all, there is insufficient high-quality plastic recyclate available to meet future demand. Second, many plastics processors are dependent on the development of chemical recycling and the availability of bio-based alternatives, a market that is not yet fully developed. Third, the use of recyclate requires additional investments in machines, moulds, personnel training, certification and testing. These three factors result in a higher cost price for plastic products made from recyclate or bio-based plastics compared to products made from virgin material. As a result, the Dutch plastics processor, which is dependent on sales on the Dutch market, cannot compete with foreign processors who do not have to meet this standard. This poses a direct threat to the financial health of the Dutch plastics processor. It would be more effective to introduce a blending obligation exclusively at European level.
From 2027 to 2030, with current plans at both Dutch and European level, an increase in the price of recyclate is expected. However, a KPMG report from September last year points to a shortage of plastic recyclate by 2030 to meet the artificially created demand. Under the new regulations, demand will increase from 1 megaton of plastic recyclate in 2022 to 2.2 megatons in 2030. However, the estimated supply of recyclate in 2030 is around 1 megaton, which is 55 percent lower than the expected demand. KPMG concludes that it is not the processing capacity, as recyclers are already scaling up. However, there is a risk that if recyclers go bankrupt before 2030, some of the expected recycling capacity will be lost. According to KPMG, the large difference between supply and demand for recyclate is mainly caused by a poor supply of plastic waste. It is expected that there will be insufficient supply of clean plastic waste that can be processed into recyclate. Closing this gap requires stopping the export of plastic waste to countries such as India, Turkey and Indonesia. In addition, it is necessary to invest in better waste separation and sorting, reduced incineration of plastic waste and a greater focus on the import of plastic waste.
Mechanical recycling, the most common form of recycling, has the disadvantage that the resulting recyclate is not always clean enough or lacks the necessary stability for specific applications. This applies in particular to strict requirements such as those for food packaging, where the plastic comes into contact with food. Many plastic processors therefore see the need to invest in chemical recycling. With chemical recycling, the plastic is reduced to oil via a chemical reaction, after which it can be reprocessed into plastic. This process requires a lot of energy and capacity is currently limited. Research commissioned by the Netherlands Enterprise Agency (RVO) shows that some plastic processors indicate that they cannot meet the blending obligation if they are dependent on mechanical recycling. Ingeborg Gort, one of the authors of the report, confirms that for many plastic processors the feasibility of the blending obligation largely depends on the supply from chemical recycling. Currently, this supply represents only a small part of the total recycling capacity. A survey linked to the RVO research shows that almost half of processors expect that the use of recyclate will cause production obstacles.
Despite uncertainties about the implementation of upcoming legislation, one thing is certain: significant changes will take place at Dutch and European level in the coming years with regard to the blending obligation. Our advice to Dutch plastics processors is to quickly enter into discussions with recyclers and make agreements about the availability of suitable plastic recyclate in the future. It is essential to pilot the new material early to assess feasibility and performance. Longer flushing times or additional cleaning operations between production processes may be required to minimize potential contamination of materials during the transition to recyclate and bio-based plastics. The government will open the first subsidy pot of 69 million euros around June. This subsidy can be used, for example, for adapted molds or as financial support to temporarily shut down machines so that tests with recyclate or bio-based plastics can be carried out.
Dutch plastic products will become more expensive due to the higher costs of plastic recyclate and the increased production costs compared to new material. Since the blending obligation is aimed at processors of plastic products, the increased costs cannot be fully passed on to customers. However, the biggest problem for Dutch plastics processors is that the European regulations until 2030 do not correspond to the Dutch blending obligation. The Dutch government has opted for a national approach within a European playing field, which is a threat to the plastics processors market in the Netherlands, especially due to the early introduction. If the price differences become too great, customers will look for cheaper alternatives outside the Netherlands, where this blending obligation does not apply. This is detrimental to the circular transition, as total plastic production does not necessarily decrease and the Dutch economy is affected by this. Production simply moves abroad. For Dutch plastics processors with a limited market share in the Netherlands, this may mean that they focus entirely on foreign markets. It can also lead to specialization in products in which it is easier to comply with the standard. As a result, the technological development of products with complex requirements, such as those for aerospace technology and the high-tech industry, lags behind.