PI Circular – Seventeenth Edition

Welcome back to PI Circular! In this edition, we reflect on the progress we made in 2025 and the challenges we faced as we continued our journey toward a more circular packaging economy.

Top 5: 2025 Developments in Packaging Sustainability

1. EPR Implementation

In 2025, the U.S. continued to advance Extended Producer Responsibility (EPR) laws for packaging. Two additional states, Maryland and Washington, passed EPR legislation this year, while previously enacted programs progressed through rulemaking, producer registration, data reporting, and preparation for the first fee schedules.

Brands can accelerate compliance by focusing on three core tenets of EPR. Design for recyclability ensures packaging can move through existing collection and processing systems. PCR usage strengthens end markets and supports a functioning circular economy. Source reduction reduces material use and lessens the burden on recycling systems.

Throughout 2025, many brands made meaningful progress, yet challenges remain as states refine program requirements and timelines. As EPR requirements evolve, PI’s EPR Toolkit remains an essential resource for helping brands understand their obligations, plan for compliance, and integrate circular practices into packaging design and sourcing in preparation for the next stages of implementation in 2026.

2. PCR PET Market Challenges

In 2025, the post-consumer recycled PET market faced intense pressure from low-cost imported PCR materials and cheap virgin plastic. Imported PCR, often priced below domestic recycled PET, undercut local recyclers and squeezed margins, making it difficult for them to compete. Combined with depressed virgin PET pricing, this created a challenging environment that forced some recycling plants to close or scale back operations.

The situation highlighted the critical need for long-term commitments from brands and supply chain partners. Multi-year contracts or recycled-content mandates are essential to provide domestic recyclers with predictable demand and justify investment. Without these commitments, domestic recycled PET struggles to compete, threatening the stability and growth of the market and limiting progress toward circular economy goals.

3. PCR PP Emergence

The emergence of food-grade post-consumer recycled polypropylene (PCR PP) in 2025, driven by regulatory pressure and technological advances, marks a significant shift in the plastics packaging market. A key catalyst is New Jersey’s Recycled Content Law, which mandates increasing levels of post-consumer recycled content for rigid plastic containers and beverage packaging sold in the state. At the same time, new PCR PP options have received a No Objection Letter from the U.S. Food and Drug Administration, allowing recycled polypropylene to be used for direct food contact.

Despite this momentum, challenges remain. Most post-consumer PP is captured in mixed number 5 PP bales collected by material recovery facilities. Because polypropylene is used in a wide range of packaging, not only food-grade applications, the comingled nature of recovery makes it difficult to isolate containers suitable for food-grade recycling. Advances in sorting technology, including AI-powered optical and sensor systems, are increasingly able to identify polymer types, colors, and container shapes, enabling effective segregation of food-grade PP from other materials. Building a durable PCR PP market requires stable demand. Food-grade PCR PP must be purchased through long-term contracts or commitments from brands and packaging converters to justify investment in collection, sorting, and recycling infrastructure. Without sufficient demand, PCR PP may struggle to scale, slowing wider adoption and limiting the recovery of polypropylene packaging into the circular economy.

4. Healthcare Plastics Regional Recycling Program

The Healthcare Plastics Recycling Council (HPRC) has partnered with the Alliance to End Plastic Waste (AEPW) and hospitals in the Houston Methodist network to launch a regional healthcare plastics recycling program. The Houston Regional Recycling Program aims to create an economically viable and self-sustaining model that other regions can adopt to help divert single-use plastics from landfill or incineration.

In a multi-year process that launched in the summer of 2024, the program will establish hospital collection systems, coordinate sorting to optimize collection and processing, and develop end-market pathways for material recovery. Cooperation across the plastics value chain is essential to addressing the challenges of healthcare packaging circularity. The Houston Regional Recycling Program combines HPRC’s expertise in establishing plastic collection programs at hospitals with AEPW’s experience in reverse logistics and collaboration with end processors.

5. Design for Recyclability Innovation

Design for recyclability remained a central focus of packaging innovation in 2025, largely driven by the expansion of EPR laws across the U.S. These regulations encourage brands and converters to consider end-of-life outcomes at the earliest stages of product design. In response, innovators are developing solutions that maintain performance while ensuring materials are compatible with existing recycling streams. Examples include barrier materials formulated to be fully recyclable, which reduces contamination and improves the quality of the recovered material. Colorant technologies are also being optimized for near-infrared (NIR) sorting systems, enabling colored items to be efficiently sorted at material recovery facilities (MRFs).

Converters are also pursuing material transitions that enhance recyclability without compromising functionality. Items previously manufactured in oriented polystyrene (OPS), PVC, or PETG are being redesigned in PET, a resin with well-established recycling outlets. This approach allows products to remain visually and functionally appealing while supporting a more circular lifecycle. By aligning design with recyclability principles, innovators are helping brands meet regulatory requirements and contributing to a broader effort to reduce plastic waste.