Circularity is moving from vision to regulation. five developments you need to understand heading into 2026.
As 2025 closes, this wasn’t just another year of sustainability pledges—circular economy shifted from voluntary initiatives to mandatory legal frameworks across multiple industries.
Here are five developments you need to understand heading into 2026:
1. EU Textile Waste Separation Now Mandatory (January 2025)
All EU member states implemented mandatory separate collection for textile waste as of January 1, 2025. Extended Producer Responsibility (EPR) schemes make fashion brands financially responsible for end-of-life management.
For material buyers, this creates unprecedented supply of sorted textile feedstock, though quality will vary as systems mature.
2. EU Plastic Import Controls Tightening (December 2025)
The European Commission announced stricter documentation requirements for plastic imports in Q4 2025, effective H1 2026. Virgin plastic is being mislabeled as recycled material, undermining European recyclers facing high energy costs.
If you export recycled plastics (PET, HDPE, PP) to Europe, expect facility audits and stricter customs codes. The EU imposed anti-dumping duties on Chinese PET. Six countries (France, Spain, Netherlands, Poland, Portugal, Sweden) push for broader trade measures against low-quality imports.
3. Digital Product Passports Entering Force (2026-2027)
DPP implementation accelerates: batteries (industrial, EV, portable >2kWh) become mandatory February 18, 2027. Textiles, tires, electronics follow through 2028-2030 under the EU’s ESPR.
Material traceability becomes non-negotiable for market access. Without documented origin, recycled content, carbon footprint, and composition via blockchain or GS1 standards, you cannot export to EU buyers post-2027.
This is infrastructure investment, not compliance cost—it differentiates strategic suppliers from commodity vendors.
4. Data Center Waste Under Scrutiny
AI-driven data center growth increased focus on e-waste footprint, energy, and water usage in 2025. Not yet heavily regulated, but this sector represents a massive emerging waste stream.
Data centers generate high-value scrap (precious metals, rare earths) requiring specialized dismantling. As regulations tighten (likely 2026-2028), certified e-waste processors will have first-mover advantage.
5. Chemical Recycling Gains Legitimacy (But Remains Economically Challenged)
Technologies like pyrolysis saw policy support—Mexico invested $135M+ in PET infrastructure, AITEX advanced textile thermochemical valorization—but viability remains tied to virgin plastic pricing and energy costs.
Chemical recycling expands technical possibilities (contaminated streams, multi-layer packaging) but profitability depends on policy support.
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