The European Commission has approved a €500m scheme by France to support the chemical recycling of plastic waste, a move that could significantly impact the packaging industry.

The initiative aligns with the EU's goal of building a more circular and resilient economy, as outlined in the Commission's priorities for 2024-2029.

Advancing sustainable packaging solutions

The French government aims to enhance plastic packaging sustainability by funding investments in chemical recycling for materials such as trays, films, non-beverage bottles, and polyester-based packaging.

This technology converts mixed and contaminated plastic packaging waste into high-quality raw materials, reducing reliance on virgin plastics.

By promoting such recycling methods, France seeks to help the packaging industry comply with upcoming EU regulations and sustainability targets.

Financial support for packaging companies

The scheme provides direct grants covering up to 40% of eligible investment costs, making it an attractive option for packaging manufacturers looking to integrate chemical recycling into their operations.

Eligible costs are calculated by comparing the total investment required for chemical recycling projects with those of conventional recycling or disposal methods.

This initiative presents an opportunity for packaging companies to future-proof their businesses while contributing to environmental goals.

Implications for the packaging sector

The European Commission assessed the measure under EU State aid rules, particularly Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU) and the Guidelines on State aid for climate, environmental protection, and energy (CEEAG).

The Commission determined that the scheme is essential for advancing chemical recycling in the packaging sector and that public funding plays a crucial role in enabling such investments.

To ensure fair competition, France has implemented safeguards to prevent market distortions. The scheme is open to all companies operating in the packaging industry and beyond, ensuring a level playing field.

With this approval, France is set to accelerate its efforts in improving packaging recycling rates, reducing plastic waste, and contributing to the EU's circular economy objectives.