How value chain collaboration is advancing a plastic circular economy

This article was originally published August 26, 2025 in Packaging Technology Today.

Transitioning from a linear to a circular economy for plastics is one of the most complex challenges facing the packaging industry. The traditional “take-make-waste” model, where raw materials are extracted, converted into products, and discarded after use, is no longer sustainable in the face of plastic waste concerns, emerging recycling regulations, and shifting consumer preferences. In a circular plastics economy, materials are recirculated through the value chain at their highest possible utility and value. This shift is massive in scope, requiring a complete transformation of how plastic is viewed at the end of its initial use as well as coordination among governments, resin producers, converters, brand owners, retailers, and consumers.

But what does a truly closed loop system for plastics look like today, and how close are we to achieving it?

For plastic packaging, two strategic focus areas have emerged in legislation and corporate action: designing packaging for recyclability and incorporating post-consumer recycled (PCR) materials into new products. The industry has made measurable progress on both fronts. However, building fully circular systems, particularly those that return post-consumer recycled (PCR) plastics into high-value applications like food contact packaging, remains challenging due to current waste and recycling practices and logistical difficulties.

Designing for Recyclability

Designing packaging to be recyclable involves aligning material selection and packaging formats with existing recycling infrastructure. Rigid plastics made with high-density polyethylene (HDPE) and polyethylene terephthalate (PET) have the highest recycling rates in the U.S., benefiting from mature collection and processing systems.¹ In contrast, flexible packaging lags behind due to the lack of curbside collection programs and multi-material structures that are difficult or impossible to separate for reprocessing.

Technical innovation in resin technology is driving improvements for recyclable flexible films. New options for sealant and barrier layers are enabling multi-layer structures to transition to mono-material packages. For example, stand-up pouches that traditionally relied on PET/PE laminates can now be formulated as all-PE structures that can comply with store drop-off film recycling programs.

Despite these advancements, transitioning to mono-material packaging is not always straightforward for manufacturers. Some resins used in recyclable film constructions have different processing characteristics and run differently on packaging lines. From modified sealing temperatures to slower throughput on form-fill-seal equipment, implementing these structures can require new equipment or line modifications.

Incorporating PCR Plastics

To further support a circular economy, many packaging laws are introducing PCR content mandates.
Incorporating PCR often starts with blending recycled resin with virgin material. This approach can make the transition more manageable from a processing standpoint while allowing companies to incrementally increase recycled content over time.

While data from the Ellen MacArthur Foundation’s Global Commitment shows that PCR usage has nearly tripled since 2018 among participating companies, the degree of progress varies significantly by sector. Cosmetics and personal care brands are leading the way, with over 30% PCR content in some product lines, but the food sector, constrained by regulatory requirements, is averaging only 10% PCR incorporation.²

The gap is largely due to the high standards for food-contact materials. The U.S. Food and Drug Administration (FDA) mandates that food-grade PCR meet the same safety and purity standards as virgin plastics. As a result, only materials with a fully traceable chain of custody and compliant reprocessing methods can qualify for these high-value applications.

Despite the lack of supply, demand for food-grade PCR continues to grow. Research from Smithers reports that the market for food-grade PCR plastic has grown over 9% annually since 2019.³

John Avolio is the polyethylene value chain manager at NOVA Chemicals. He has more than 20 years of experience in the packaging, plastics, and chemicals industry.