Is the Plastic Recycling Business Profitable? Take a Look at Which Plastic Recycling Plants Have Closed

According to the Bioplastics Research Institute, on July 11, 2025, the 200,000-ton plastic recycling project under Dongyue Chemical, a subsidiary of Huizhou Huicheng Environmental Protection (300779), successfully commenced trial production. Its label of having globally leading advanced catalytic cracking technology has sparked excitement in the plastic recycling industry.

However, during the same period, while seven multinational companies—including Mitsubishi Chemical, BASF, and Covestro—were making headlines in February 2025 by announcing the launch of a European automotive plastics recycling project, the site of a PET chemical recycling plant in the Lorraine region of France, jointly developed by French Suez Group, Canada’s Loop Industries, and South Korea’s SK Group, was being overtaken by weeds. This French chemical recycling project, which originally planned to produce 70,000 tons of recycled PET per year, was declared defunct less than two years after massive investments, serving as a vivid illustration of the stark contrasts in the global plastics recycling industry.

Is the plastic recycling business really easy to run? From Europe and America to Southeast Asia, the list of recycling factories that have gone bankrupt in recent years keeps growing, revealing the harsh reality behind this seemingly sunrise industry.

1. Europe: The Clash of Policy Ideals and Market Realities

In March 2025, the warning from the European Plastics Recycling Industry Association about being on the "brink of collapse" is by no means alarmist. Data shows that in 2024, the total capacity of closed plastic recycling facilities in the EU doubled compared to the previous year, and the output of post-consumer plastics from mechanical recycling decreased by 7.8% compared to 2022, amounting to only 7.1 million tons.

The decision by the UK company Viridor to close the Avanmouth physical recycling plant is quite representative, as this industry giant explicitly blames "the UK government's policy delays, lack of regulations to increase the plastic recycling rate," and "the global oversupply of virgin polymers." More ironically, just as European countries are raising the banner of environmental protection, the export volume of plastic waste from the EU is set to surge by 36% in 2024, while domestic recycling efforts are decreasing rather than increasing.

The experience of the British company Biffa further exemplifies the industry's difficulties. As a leading waste management company in the UK, Biffa announced the closure of its plastic recycling plant in Washington, Sunderland, at the beginning of 2025. This plant, with an annual processing capacity of 39,000 tons, faced severe market challenges, especially in the cleaned HDPE and PP fragments, due to the increasingly difficult market environment, leading to its shutdown. This case further highlights the vulnerability of the UK's plastic recycling industry amidst market fluctuations and echoes the predicaments of other British enterprises, collectively depicting the challenging situation of the UK's plastic recycling sector.

The Netherlands has become a hard-hit area in the collapse of Europe's recycling industry, with five companies going bankrupt in one year.

In mid-December 2024, Stiphout Plastics, with an annual production capacity of 18,000 tons, went bankrupt due to the impact of cheap imported recycled materials. Not even the 50% stake held by chemical giant LyondellBasell could save its decline. Similarly, in the Netherlands, Umincorp, a company that had once received food-grade certification, ultimately succumbed to rising wages and energy costs amidst the low prices of virgin plastics. Most lamentable is the case of Ioniqa, whose advanced PET depolymerization technology could produce food-grade recycled materials, yet it went bankrupt because it could not achieve positive cash flow in the short term. Its restart plan had to come at the cost of laying off half its staff and closing its factory. Additionally, Vinylrecycling applied for bankruptcy in November 2024. The company had a PVC waste processing capacity of 20,000 to 30,000 tons per year and was deemed to have illegally exported PVC waste to third countries, leading to a weakened financial situation. Blue Cycle also filed for bankruptcy at the end of 2024. The company processed 25,000 tons of plastic waste annually and faced resistance from the local community and financial difficulties due to health complaints arising from chemical odors and financial pressure.

These cases reveal a fatal contradiction in Europe's recycling industry: the circular economy goals pursued by policymakers are seriously disconnected from the survival pressures faced by enterprises. The EU Packaging and Packaging Waste Directive requires a phased increase in the proportion of recycled materials, but when the price of rPET clear flakes drops by 10 euros per ton and colored flakes plummet by 45 euros, the compliance costs for companies have already far exceeded their capacity to bear.

2. United States: A Rapid Exit After the Capital Frenzy

The collapse of the plastic recycling industry in the United States often carries a strong sense of capitalist farce. The Myplas plant in Minnesota is a typical example. This recycling enterprise, jointly invested with $24 million by giants such as General Mills and Target, suddenly shut down less than two months after officially starting operations at the end of 2023, leaving behind an empty 170,000-square-foot factory and unresolved financial mysteries. The project originally planned to process 90 million pounds (about 40,000 tons) of polyethylene film annually and produce food-grade recycled resin. It even received nearly $1.5 million in government subsidies, but hastily ended amid grand claims of “changing the Midwest’s recycling landscape.” This also reflects a fatal flaw in its business model. For example, the cost structure showed that local waste collection and sorting accounted for over 40% of total costs, much higher than that of Asian peers.

An earlier warning came from the collapse of ParcCorp in 2018. This company, which processed 180 million pounds of plastic annually with about 60% relying on imported waste plastics (mainly Western waste transshipped through China), was the eleventh largest plastic processor in the United States. It voluntarily dissolved due to the business disruption caused by China’s import ban. The lament of company president Kathy Xuan is quite representative: "The import restrictions permanently closed established business opportunities." From plans to expand to four factories to a complete collapse, ParcCorp’s rise and fall reveals the deep dependence of the U.S. recycling industry on overseas markets and its lack of capacity to respond to sudden policy changes.

The vulnerability of American recycling companies is fully exposed amidst fluctuations in crude oil prices. In July 2025, crude oil prices stabilized at the level of 532 yuan/ton, allowing virgin plastics to maintain a price advantage and further squeezing the market space for recycled materials. Under this market mechanism, American recycling companies lack the policy protection of Europe and the cost advantages of Asia, finding themselves in an awkward "neither high nor low" situation. The rapid demise of the Myplas factory proves that even with backing from giants and government subsidies, capital struggles to overturn market rules in the cost competition between virgin and recycled plastics.

3. Global Predicament: Triple Strangulation and Glimmers of Breakthrough

Three insurmountable gaps lie before plastic recyclers worldwide.

First is the cost squeeze: rising energy prices in Europe, high capital costs in the United States, and increasing labor costs in Southeast Asia have generally pushed recycling processing fees above the production cost of virgin plastics. The bankruptcy report from Dutch company Umincorp bluntly stated: "Materials cannot compete with virgin materials on price in the market."

Furthermore, there is policy fluctuation: the EU raises recycling targets while allowing cheap imported recycled materials, the UK repeatedly delays the implementation of its Resources and Waste Strategy, and federal and state regulations in the US are contradictory. This uncertainty forces companies to struggle to balance compliance costs and market risks. The warning from Ton Emans, President of Plastics Recyclers Europe, goes straight to the heart: "If plastic recycling is not seen as a strategic industry, the entire value chain will continue to decline."

Finally, there is the technological trap: chemical recycling, which has been highly anticipated but repeatedly frustrated. Shell will abandon its goal of "converting 1 million tons of waste plastic into pyrolysis oil by 2025" in 2024, admitting that the plan is "unfeasible." The PET chemical recycling project in Lorraine, France, was terminated due to "investment far exceeding the budget," proving that the current technological route still struggles to break through the critical point of economic feasibility. Even companies like Viridor in the UK, which are turning to chemical recycling by acquiring Quantafuel to bet on new tracks, represent merely strategic adjustments by a few companies rather than a universal industry solution.

In this bleak scenario, there have been attempts to break the deadlock. The EU is considering implementing strict import controls to restrict the entry of recycled materials that do not meet sustainability standards. After bankruptcy, Ioniqa has restarted with plans to continue its operations through a technology licensing model. Although the large-scale commissioning of the Asian PLA project has impacted European and American companies, it has also driven the iteration of material technologies. Whether these glimmers can ignite a greater transformation remains uncertain, but at least they prove that the industry is not entirely without hope.

The plastic recycling business has never been a simple act of environmental goodwill; rather, it is a complex systemic project that requires the coordinated support of policies, markets, and technology. From abandoned factories in Lorraine, France to idle equipment in Minnesota, USA, these cases of bankruptcy all reveal a harsh truth: as long as virgin plastics remain cheap, policy support is insufficiently firm, and technological breakthroughs have yet to arrive, the plastic recycling business is destined to be an arduous journey. Those recyclers striving to strike a balance between environmental ideals and commercial realities are writing the most tragic entrepreneurial epic of the circular economy era.