School of Packaging APEX Lab: AI for Paper & Plastic Engineering and Manufacturing Systems Integration Lab

EDITORIAL

The PCR Mandate — and the Trap We’re Walking Into

By Muhammad Rabnawaz, Professor

Views are my own and do not represent MSU or other institutions.

Mandates alone will fail. The U.S. needs high-quality recycled plastic content, a virgin-plastic fee that funds recycling, infrastructure, and design built for the clean mechanical loop, and targeted limits on dumped imports like recycled PET.

Across the U.S., a growing list of states now require packaging to contain recycled plastic, and more are on the way.¹ The intention is right. But here is the uncomfortable truth: we are ordering brands to buy more recycled plastic at the very moment many of the American companies that make it are shutting down.

Over the past year, U.S. reclaimers have shut their doors.² Recycled PET has traded at or below what it costs to produce.³ We have built the demand and starved the supply. If we keep going this way, the mandates won’t strengthen American recycling — they’ll be quietly satisfied by cheap imported recycled pellets, and the jobs, the plants, and the value will end up somewhere else.

It doesn’t have to go that way. Europe is showing us both the promise and the warning at once: ambitious recycled-content rules, paired with a recycling sector its own Environment Commissioner calls to be in “deep crisis” after losing roughly a million tonnes of capacity in two years,⁴ as cheap and sometimes mislabeled imports undercut local recyclers.⁵ U.S. can learn from that experience instead of repeating it. Here is what a smarter American approach looks like.

Keep the mandates — but demand quality, not just a number

Recycled-content requirements are the right backbone of packaging policy. They convert corporate pledges into real, durable demand, and that demand is exactly what gives recyclers the certainty to invest. We should keep them, and they should escalate on a predictable schedule.

But a percentage on paper is not the goal. If we write rules that reward “recycled content” regardless of how it’s acquired, we create waste of a different kind: chemically break down contaminated, mixed plastic back into feedstock and then converting it into food-grade resin, which costs more than making new petrochemicals.⁶ That’s chasing a label, not an outcome — and the economics are unforgiving: in 2025, amid high European energy costs, some companies halted their chemical-recycling plant. Recycling mandates should reward high-quality, genuinely functional recycled content — and they should never be set so aggressively that they force uneconomic, high-carbon recycling just to hit a target. When recycled material can’t economically reach food grade, it should be used for durable goods, fiber, and non-food uses where it still displaces virgin plastic — not pushed through an expensive process for the sake of a number. Quality over quantity.

Tax virgin plastic — and plow every dollar back into recycling.

The root distortion is simple: virgin plastic is priced too low for recycled plastic to compete. A surplus of low-cost resin — from domestic overcapacity and cheap imports alike — keeps it that way.⁷ In Europe, food-grade recycled PET traded at a premium of $566–836/mt over virgin through 2025, which is precisely why recycled struggles to compete. No mandate fixes that, because a mandate doesn’t change the underlying economics — it just forces a purchase.

A fee on virgin resin attacks the problem at its source. Raise the price of virgin, and every producer finds its own cheapest path to compliance — more recycled content, lighter packaging, smarter design — without regulators dictating the route. But the fee cannot be a one-time shock that doubles prices overnight. That would spike costs on groceries and medicine, hit working families hardest, and trigger shortages before the recycled supply can possibly respond. It should start at a meaningful level and rise on a published, multi-year schedule, so the market can follow the signal.

And the revenue is the entire point. It should be used for the recycling infrastructure: collection and sorting infrastructure that actually determines how much recycled material exists in the first place. Spend it on durable, one-time infrastructure that keeps working for decades, not on operating subsidies that collapse the moment the fee succeeds in shrinking virgin demand.

A virgin fee that funds its own replacement is a transition. A virgin fee that just raises prices is a tax.

Build for the cheap, clean loop: mechanical recycling of food-grade plastic.

Here is the part the technology debate keeps missing. Mechanical recycling — wash, sort, melt, re-pelletize — is cheap, low-energy, and fully capable of producing food-grade recycled plastic.⁸ These also include dissolution approach (solvent-based recycling), which dissolves and cleans the plastic without breaking it down into its raw chemical ingredients. But only when the material going in is clean and well-sorted. The expensive, energy-hungry chemical (depolymerization) recycling processes are what we are forced into when packaging arrives dirty, dyed, or laminated into inseparable layers.

So the smartest and cheapest thing we can do is keep more plastic in the clean loop. That requires two investments. First, collection and sorting: you cannot recycle a bottle that was never collected, and America’s collection infrastructure is weak and underfunded.⁹ This is where the virgin-fee revenue should go first. Second, design: packaging should be built as recyclable mono-materials, mixed resins, and multilayer films that push material out of the clean loop and into landfills or incinerators. Fee structures should reward the designs that recycle cheaply and cleanly, and penalize the ones that don’t. Get the feedstock clean, and food-grade mechanical recycling/dissolution recycling becomes not just possible but economical.

Stop dumping imports from killing the recyclers we’re counting on — surgically, not bluntly.

America is a net exporter of the most common plastics,¹⁰ so banning resin imports does little about our own overcapacity — and an outright ban would likely violate WTO rules¹¹ and would invite retaliation against the very American exporters we want to protect.

But the import problem is real, and it is specific. For PET — the polymer where recycled-content demand is concentrated, and the one used in bottles and food trays — the U.S. is a net importer,¹² and cheap imported PET, both virgin and recycled, is a leading reason our domestic reclaimers cannot compete. The right response is targeted, not sweeping. Apply the virgin fee equally to the plastic in imported packaging and goods, so foreign material cannot dodge it — a border adjustment, the same approach we use for carbon. And use the antidumping and countervailing-duty tools we already have against specific dumped streams like recycled PET.¹³ It is precise, and it protects American recyclers from competitors whose prices are propped up by foreign industrial policy rather than market economics. The objective is not to eliminate imports but to stop the unfair, below-cost competition that undermines domestic recycling and manufacturing — while keeping access to reliable global supply.

The point is not fewer trades or less plastic. It is a better outcome.

Taken together — quality-focused mandates, a calibrated virgin fee that funds recycling, infrastructure, and design aimed at the clean loop, and targeted limits on dumped imports — these moves all point in the same direction: less waste and a stronger American recycling and manufacturing base. They are not in tension. They reinforce each other.

The alternative is the path Europe is now scrambling to correct:¹⁴ mandate first, protect later, and watch your own recycling industry buckle while imports fill the gap. We have the chance to get the sequence right the first time.

Where the research comes in

Policy can create the demand and repair the economics, but someone still has to make high-quality recycled content and a recyclable design technically real, a pre-competitive science that most individual companies cannot justify alone. Restoring the quality of post-consumer recycled plastics for high-value uses — so that mechanically and/or dissolution recycled PET, HDPE, and polypropylene can re-enter demanding applications under industry-agreed protocols; designing high-barrier packaging that is recyclable to begin with, so brands need not trade performance for recyclability; and strengthening the collection and sorting that decide how much clean feedstock the mechanical loop ever sees. Chemical recycling needs to be reserved for the genuinely hard cases, such as mixed, flexible, multilayer streams that cannot be mechanically/by dissolution recycled into food grade.

The debate isn't whether to regulate recycled content — that's happening. The real choice is whether we design those rules to build a real domestic recycling industry or let the benefits slip abroad.

About the author

Dr. Muhammad Rabnawaz is a Full Professor in the School of Packaging at Michigan State University, PI of the APEX Lab (AI for Paper & Plastic Engineering and Manufacturing Systems Integration). The author can be reached at rabnawaz@msu.edu.

Sources

1. State recycled-content mandates and their expansion. CalRecycle (AB 793) — https://calrecycle.ca.gov/bevcontainer/bevdistman/plasticcontent; O’Melveny, 2026 EPR/PCR update — https://www.omm.com/insights/alerts-publications/2026-plastics-epr-packaging-rules-update-what-sb-54-sb-343-state-reporting-deadlines-prc-laws-the-eu-ppwr-mean-for-producers-retailers/

2. U.S. recycled-PET reclaimer closures (five reclaimers closed over the past year). Recycling Today (five U.S. reclaimers closed) — https://www.recyclingtoday.com/news/a-pivotal-moment-for-recycled-pet-plastic-the-recycling-partnership/; Recycling Today (tariff scope; recent closures) — https://www.recyclingtoday.com/news/us-reciprocal-tariff-scope-now-includes-virgin-and-recycled-pet/

3. Recycled-PET prices at or below production cost (bale prices at historic lows while processing costs rise). Waste Dive (historic-low bale prices vs. rising costs) — https://www.wastedive.com/news/reclaimers-weather-plastics-markets-storm/813095/

4. EU recycling sector in “deep crisis” (Commissioner Jessika Roswall, Financial Times); ~1 million tonnes of capacity lost 2023–2025. Financial Times (Roswall interview), via The Cooldown — https://www.thecooldown.com/outdoors/import-eu-plastics-recycling-industry-crisis/; S&P Global / Plastics Recyclers Europe — https://www.spglobal.com/commodity-insights/en/news-research/latest-news/chemicals/090125-european-plastics-recycling-industry-facing-collapse-pre

5. Imports suspected of being virgin plastic mislabeled as recycled. Circular Online (reporting Reuters / European Commission) — https://www.circularonline.co.uk/news/eu-plans-tighter-checks-on-plastic-imports-to-support-recycling-industry/

6. Chemical recycling of dirty/mixed plastic can cost more than virgin production; a planned plant was cancelled on economics. Uekert et al., ACS Sustainable Chem. Eng. (2023) — https://doi.org/10.1021/acssuschemeng.2c05497; OPIS (Dow/Mura plant cancellation) — https://www.opis.com/blog/2026-outlook-policy-and-economics-to-shape-european-recycled-plastics/

7. Cheap virgin resin and oversupply suppress demand for recycled material; EU food-grade rPET premium to virgin in 2025. S&P Global — https://www.spglobal.com/energy/en/news-research/special-reports/chemicals/chemical-trends-h1-2026/sustainability-in-peril/recycled-polymers; OPIS 2026 outlook — https://www.opis.com/blog/2026-outlook-policy-and-economics-to-shape-european-recycled-plastics/

8. Mechanical recycling is low-cost, low-energy, and capable of food-grade output from clean feedstock. Uekert et al. (2023) — https://doi.org/10.1021/acssuschemeng.2c05497; APR / Franklin Associates PCR life-cycle inventory — https://plasticsrecycling.org/resources/2018-life-cycle-impacts-for-postconsumer-recycled-resins-pet-hdpe-pp/

9. U.S. plastics recycling rate of roughly 5–6% (EPA’s last official figure was 8.7% for 2018). Beyond Plastics / Last Beach Cleanup — https://www.beyondplastics.org/publications/us-plastics-recycling-rate; World Economic Forum (Reuters) — https://www.weforum.org/stories/2022/05/plastic-waste-generation-new-highs-us-report/

10. The U.S. is the world’s largest polyethylene exporter and a net exporter of commodity resins. ChemOrbis — https://www.chemorbis.com/en/plastics-news/Stats-US-PE-exports-hit-a-renewed-record-in-2023-sales-to-China-boom/2024/02/12/893379; American Chemistry Council via Resource Recycling — https://resource-recycling.com/plastics/2025/02/05/plastics-recycling-industry-speaks-out-on-tariffs/

11. WTO rules prohibit quantitative import restrictions (general import bans). WTO — Quantitative Restrictions (GATT 1994, Article XI) — https://qr.wto.org/en/about; WTO — GATT 1994 legal text (Article XI) — https://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm

12. The U.S. is a net importer of PET (virgin PET imports supply roughly 30% of demand; net importer of PET scrap). Resource Recycling (Chemical Market Analytics) — https://resource-recycling.com/plastics/2024/12/11/industry-views-are-mixed-as-tariff-threat-looms/; ICIS — https://www.icis.com/explore/resources/news/2024/02/16/10971916/insight-2023-marks-first-year-as-us-net-plastic-scrap-importer-driven-by-pet-imports-increasing-33-year-on-year/; NAPCOR via Resource Recycling — https://resource-recycling.com/plastics/2025/02/20/rpet-imports-raise-industry-concerns/

13. Existing U.S. antidumping/countervailing-duty orders on PET resin (Canada, China, India, Oman); the PET-resin tariff code covers both virgin and recycled material. USITC (orders upheld 2022) — https://www.usitc.gov/press_room/news_release/2022/er0310ll1907.htm; USITC — PET resin scope — https://www.usitc.gov/keywords/pet_resin

14. The EU is now adding import controls — a surveillance task force, stricter documentation/customs codes, and antidumping duties on Chinese PET. Reuters via EnergyNews (documentation, customs codes) — https://energynews.oedigital.com/climate-change/2025/12/23/eu-to-tighten-import-controls-on-plastics-to-aid-struggling-recyclers; Circular Online (surveillance task force; Chinese-PET antidumping) — https://www.circularonline.co.uk/news/eu-plans-tighter-checks-on-plastic-imports-to-support-recycling-industry/