Dual Pressures of Weak Demand and Policy Volatility: The U.S. Recycled Plastic Market Faces Critical Challenges
The U.S. recycled plastic market is standing at a crossroads, and its future trajectory hinges heavily on whether legislation can send clear and mandatory market signals.
The current market is facing three core challenges:
Dual Squeeze from Demand and Price: The market is under the dual impact of low prices of virgin plastics and weak end-market demand, which has forced several major recycling enterprises to shut down their facilities and put a halt to investments.
Shrinkage and Limitations of Corporate Commitments: Major brand owners (e.g., PepsiCo, Coca-Cola) have successively lowered their long-term targets for recycled content in plastic packaging, exposing the fact that voluntary corporate commitments alone cannot drive systemic investment.
Critical Policy-level Game: The absence of a unified mandatory policy at the federal level means that market driving forces rely mainly on fragmented state-level programs. The legal challenges facing Oregon’s EPR Act are set to become a national policy bellwether — its ruling will determine whether stable funding is injected into recycling infrastructure, or whether it results in nationwide delays to the EPR process and a blow to investment confidence.
Conclusion: In the absence of federal enforceability, the success or failure of local policies (especially EPR) has become the most critical variable determining whether the U.S. recycled plastic industry can obtain the necessary impetus and avoid further deterioration.
At the start of 2026, the U.S. recycled polymer market got off to a start under multiple pressures including weak demand, low costs of virgin resins and fragmented policy signals. In the absence of unified and mandatory recycled content requirements at the federal level, state-level programs have become the primary driver of compliance. Recently, the ongoing legal challenges faced by Oregon have added new uncertainties to the industry.
A key hearing will be held on January 14 for the Plastic Pollution and Recycling Modernization Act enacted in Oregon in 2021. The National Association of Wholesalers and Distributors (NAW) has filed for a preliminary injunction with the federal court, arguing that the Act, which mandates that producers and distributors partner with a single entity, violates the constitutional restrictions on interstate commerce.
The ruling of this case is likely to reshape the landscape of Extended Producer Responsibility (EPR) systems across the United States: if NAW prevails, the implementation of EPR in Oregon may be delayed or redesigned, which would further erode investment confidence in state-led recycling policies and even affect the legislation and enforcement of EPR in other states; if Oregon’s Act withstands the challenge, it will ensure funding for the construction of recycling infrastructure and drive the development of EPR systems nationwide.
Buffeted by the impact of low-cost imported materials and oversupply of virgin materials, multiple U.S. recycling enterprises shut down their facilities in 2025, including rPlanet Earth and Evergreen in California, as well as the Alpek PET recycling project in North Carolina.
Market analysis indicates that weak demand has left recycling companies short of incentives for investment, while voluntary commitments from end-users have also been shrinking. A number of brand enterprises have scaled back their sustainability targets. For instance, PepsiCo lowered its target for recycled content in plastic packaging from 50% by 2030 to 40% by 2035. Prior to this, Coca-Cola had already revised its target from 50% by 2030 to 35-40% by 2035 back in 2024.
In the future, brands may argue that they are unable to secure sufficient recycled materials to meet their targets, especially in the case of non-PET food-grade packaging where laws impose extremely stringent restrictions on material selection.
Industry insiders point out that voluntary corporate commitments alone cannot drive investment in the recycling industry, and the absence of federal-level action has left the market reliant on local policies. The outcome of the legal ruling in Oregon will set the tone for the nationwide EPR process. The U.S. recycled plastic market is standing at a crossroads. Clear legislation may prove to be the key influencing factor, determining whether sustainability goals can secure the necessary impetus or face the risk of further deterioration.
Source: https://www.argusmedia.com/en/news-and-insights/latest-market-news/2771315-viewpoint-us-recycled-polymers-under-pressure
