Federal decree requires a minimum of 22% reused material from July 2026, but purchases of recycled resin have fallen sharply even with supply above demand
A few months before the start of the mandatory targets of ““, a standard that obliges packaging manufacturers to incorporate minimum percentages of recycled material in their products, the Brazilian market is moving in the opposite direction to what the law requires.
Published by the Ministry of the Environment, the decree obliges, from July 2026, packaging manufacturers to use at least 22% recycled content in plastic productsunder penalty of fines that can reach R$50 million. The objective is to stimulate the so-called circular economy, a model in which waste becomes inputs again, and reduce the volume of waste sent to landfills.
To meet the goal, companies would need to be purchasing more rPET, an acronym for recycled PET resin used in bottles, jars and other plastic packaging. But the opposite is happening: data from consultancy MaxiQuim shows a about 30% left when purchasing this material. The situation is made worse by the fact that the recycling industry already has enough installed capacity to meet the demand foreseen by law. The problem, therefore, is not a lack of supply, but of demand from those who manufacture packaging.
Estimates indicate that Brazil already has a relevant base of installed capacity for rPET production. In 2024, Brazil reached around 510 thousand tons of capacity for installing this type of plastic, according to Abipet (Brazilian PET Industry Association).
This mismatch creates a double risk. For companies, those who do not adapt their processes in time will face the expected fines. For the recycling sector, the lack of demand leaves recyclers with idle capacity and projects stuck.
Cheaper virgin plastic puts pressure on the market
According to representatives of the recycling chain, the main factor behind the retraction is competition from virgin resins – plastic produced directly from oil, without reuse –, which are going through a global cycle of low prices. Production overcapacity in the United States and China increased supply and drove down prices, making recycled material less competitive. In some cases, recycled plastic has cost up to 41% less than the virgin.
“There is now much more virgin resin production capacity in the world than demand. This brings down prices and reduces the incentive to use recycled materials”says Maurício Jaroski, director of sustainable chemistry and recycling at MaxiQuim. On the recycling side, costs remain high because the chain involves collection, sorting, transportation and processing, steps that do not follow the drop in petrochemical prices.
The scenario, however, may be changing because of the war in the Middle East. The conflict has put pressure on the price of oil and made virgin resins more expensive, rebalancing the dispute with recycled material. According to Jaroski, prices for both have risen between 30% and 45% in recent weeks. The increase in logistical costs, the shortage of ships and the rise in oil prices are reminiscent of the pandemic period, when recycling gained competitiveness compared to virgin. “With the war, recycled materials are gaining ground again”he states.
Regulation and social impact
In addition to the economic factor, regulatory uncertainty also weighs in. Despite the high fines, companies still question the inspection capacity and legal security of the decree. “Many players are paying to see. It is not clear how the rules will be applied nor whether there will be continuity in the long term”said Jaroski.
Another point of attention is the impact on the base of the chain. Unlike the petrochemical industry, the recycling sector largely depends on collectors and cooperatives, whose income can be affected by falling prices.
Cooperatives report cases in which the average remuneration per member fell to around R$700 per month, which corresponds to less than half the minimum wage, which is R$1,621.00 and can. The reduction discourages collection, reducing the supply of waste for recycling. “If the price of waste is too low, the collector stops collecting it. This compromises the entire chain”says Jaroski.
According to the director of MaxiQuim, the expectation in the sector is for a gradual change in the behavior of companies. The most likely trend, he says, is an intermediate scenario, in which part of the market begins to meet targets while another is still awaiting greater regulatory clarity.
This report was produced by journalism intern Gabriella Santos under the supervision of Assistant Editorial Secretary Guilherme Pavarin
