From Recyclability to Renewable Carbon: The Next Step in Packaging Regulation

By Flavia Bittencourt Moré, Sustainability and LCA Specialist at Sustainea

The circular economy seeks to replace today’s predominantly linear “take-make-dispose” model with a system that keeps materials at their highest value for as long as possible. Built on renewable energy and non-toxic materials, it works by slowing, narrowing, and closing resource loops, keeping products and materials in use through maintenance, reuse, refurbishment, remanufacturing, recycling, and composting. By decoupling economic activity from the extraction of finite resources, it addresses climate change alongside biodiversity loss, waste generation, and pollution.

Of these levers, recycling has been the one most readily translated into policy, and packaging has been one of its primary targets. Over the past decade, recycled content targets, recyclability criteria, and fee structures modulated by end-of-life performance have reshaped how packaging is designed, collected, sorted, and reported. This approach is now embedded in a growing number of extended producer responsibility (EPR) schemes worldwide. Yet it governs how materials circulate after use and says little about the carbon that enters the system before any packaging exists. That carbon remains overwhelmingly fossil: roughly 88% of the carbon feedstock used by the chemical industry, which supplies the polymers from which plastic packaging is made, is still extracted from the ground, while biogenic sources supply about 8% and recycled materials about 4% (Kähler, Porc & Carus, 2023).

Biogenic carbon addresses that gap and, in doing so, connects the two cycles of the circular economy. In the Ellen MacArthur Foundation’s framework (2019), the biological cycle returns nutrients safely to the biosphere, while the technical cycle keeps materials circulating through reuse and recycling. A durable bio-based polymer such as bio-based PET circulates in the technical cycle as a material, yet its carbon originates in the biological one, drawn from the atmosphere through photosynthesis. Once in the technosphere, that carbon can be retained across successive product cycles, extending the time it stays out of the atmosphere (Tan & Lamers, 2021).

This is where interoperability becomes central. Recycling extends the useful life of carbon already in circulation; bio-based content determines which carbon enters the system when new material is needed. Because recycled supply is bounded by what can be collected, sorted, and reprocessed to the required quality, part of the demand will always be met by new material. Drop-in bio-based polymers, chemically identical to their fossil counterparts, follow the same polymerization, conversion, and recycling routes, so renewable and recycled content can be combined in the same package without new collection streams or contamination of existing ones (Joint Research Centre, 2026). Renewable carbon enters the system; recycling keeps it there.

Although eco-modulation still rewards performance mainly at end of life, this complementarity is increasingly recognized. The EU’s Sustainable Carbon Cycles Communication set the goal of sourcing at least 20% of the carbon in chemical and plastic products from sustainable non-fossil sources by 2030 (European Commission, 2021). The nova-Institute assessment commissioned to inform the PPWR (Packaging and Packaging Waste Regulation, (EU) 2025/40) Article 8 review recommends treating bio-based and recycled carbon as complementary routes away from fossil feedstocks (Carus et al., 2026). Industry has converged on the same reading: Plastics Europe states that recycled and bio-based feedstocks “should not compete with each other” (Plastics Europe, 2026), and Cefic has proposed biomass-derived content targets designed to complement recycled-content obligations (Cefic, 2026).

That recognition already has a legal footing. In the United States, the packaging EPR laws of Oregon, California, Minnesota, and Washington require producer fees to be adjusted according to environmental performance, and each names material choice or renewable inputs among the criteria. Washington’s law is particularly telling: it directs fees to incentivize “increasing the amounts of inputs derived from renewable and sustainable sources without reducing its ability to be recycled,” writing interoperability directly into the fee structure. In Europe, the PPWR couples binding recycled-content targets with Article 8, which requires the Commission to review, by February 2028, the performance of bio-based plastic packaging and, where appropriate, to propose bio-based content targets and sustainability requirements. On both sides of the Atlantic, the direction is set in law; the magnitude of the incentive is being defined now, through fee schedules in the United States and the Article 8 review in the EU.

The shift toward bio-based materials is therefore no longer a question of direction, but of pace. In this transition, interoperability is the decisive criterion: solutions that bring renewable carbon into the system without disrupting the conversion and recycling infrastructure already in place are the ones able to scale at the speed regulation is beginning to demand. Recycling and renewable carbon are not competing answers to the same question, but two parts of the same answer, and the companies that plan for both today will be positioned to lead the transition rather than simply comply with it.

 

References

Carus, M., vom Berg, C., Skoczinski, P., Porc, O., Poranki, N., Tweddle, G., Stratmann, M., Dammer, L., & Puente, Á. (2026). Support for bio-based feedstock in plastic packaging analysis under the Packaging and Packaging Waste Regulation (EU) 2025/40. European Commission, Directorate-General for Environment. Publications Office of the European Union. https://doi.org/10.2779/1016857

Cefic (2026). Proposal for biomass-derived content targets. European Chemical Industry Council.

Ellen MacArthur Foundation (2019). Circular economy systems diagram.

European Commission (2021). Communication on Sustainable Carbon Cycles (COM(2021) 800 final).

Joint Research Centre (2026). Bio-based plastics in a sustainable and circular bioeconomy (Science for Policy Brief, JRC145443). European Commission.

Kähler, F., Porc, O., & Carus, M. (2023). RCI Carbon Flows Report: Compilation of supply and demand of fossil and renewable carbon on a global and European level. Renewable Carbon Initiative / nova-Institute.

Plastics Europe (2026). Position paper on biobased feedstocks.

Regulation (EU) 2025/40 of the European Parliament and of the Council on packaging and packaging waste (Packaging and Packaging Waste Regulation – PPWR).

Tan, E. C. D., & Lamers, P. (2021). Circular bioeconomy concepts—A perspective. Frontiers in Sustainability, 2, 701509. https://doi.org/10.3389/frsus.2021.701509

U.S. state packaging EPR laws: 

California Senate Bill 54 (2022), Plastic Pollution Prevention and Packaging Producer Responsibility Act.

Minnesota Statutes §115A.1454 (2024), Packaging Waste and Cost Reduction Act.

Oregon Senate Bill 582 (2021), Plastic Pollution and Recycling Modernization Act.

Washington Engrossed Second Substitute Senate Bill 5284 (2025), Chapter 316, Laws of 2025.