For a long time, the answer to “how do we make packaging more sustainable?” was simple and one-sided: recycle. Recycle more, recycle better and set higher targets for recycled materials. That story is understandable, but it is incomplete. And the European Commission is now admitting it.
Market-ready, but held back by policy
In April 2026, the European Commission published a comprehensive report under the Packaging and Packaging Waste Regulation (PPWR): Support for bio-based feedstock in plastic packaging. The PPWR already sets recycled content targets for plastic packaging, but bio-based materials are not yet treated on equal terms. The report, produced by the nova-Institute, is not a new law or a binding rule, but it does provide the foundation for what is coming next in policy terms. The conclusion is clear: you cannot build a truly circular plastics system without bio-based materials.
The analysis opens with the fact that bio-based polymers currently represent less than 1% of global plastic production. That is a small share. At the same time, the report states that there are no fundamental technical barriers to using them in packaging. Seventeen bio-based polymers are commercially available, and for most packaging applications, the technology is simply there.
The problem is not the technology. The problem is the market, and the policy that shapes it.
Recycling has a structural ceiling
This is where it gets interesting. The report explicitly states that mechanical recycling has real limits. Every time plastic is recycled, it loses quality. Contaminants build up, and the supply of truly clean, high-grade recycled material is simply not large enough to meet demand. For packaging that comes into contact with food, this is a serious problem. Recycled materials often do not meet food safety standards, which means they cannot legally or safely be used. Bio-based plastics fill that gap. They provide the same clean, uncontaminated material as newly produced plastic, without relying on fossil fuels to get there.
The sustainability test: RED III as the framework
A fair question is always: “but how sustainable is bio-based material?”. The report points to an existing EU framework, the Renewable Energy Directive (RED III), as the right starting point for answering that question. This sets clear rules for how plant-based raw materials should be sourced responsibly. This means that the crops or plants used to make bio-based plastics cannot be grown on land that stores large amounts of carbon. It also means protecting nature and wildlife along the way, and being able to prove that the end product produces fewer greenhouse gas emissions than packaging made from oil or gas.
These rules are not new. They were originally designed for biofuels and renewable energy, and they have been tested and proven in that sector for years. The report argues there is no reason they cannot work just as well for packaging materials. The numbers speak for themselves: bio-based plastics can produce 30 to 70% less CO2 than plastics made from oil or gas. That is a substantial difference, not a marginal improvement.
What this means for you as a buyer or sustainability manager
The report makes concrete policy recommendations that will directly affect the packaging market:
- Clear targets for bio-based packaging, tied to sustainability rules, so that companies have a concrete goal to work toward and investors know where to put their money
- A level playing field between bio-based and recycled content in the PPWR, so that brands and manufacturers can choose the best solution for their product without one approach being unfairly favoured over the other
- Updated recycling systems that can also handle bio-based plastics, so that these materials can be properly collected and processed at the end of their life
- Financial or regulatory support as a starting condition: without the right incentives in place, the market will simply not move fast enough on its own
The numbers back this up. According to the report, bio-based packaging for food contact applications could make up 8 to 10% of the market by 2030. By 2040, that share could grow to anywhere between 24 and 44%, depending on the type of packaging. That is not a distant vision. That is within the planning horizon of every brand and retailer making packaging decisions today.
The market signal is already there
The policy direction has been set. The question is no longer whether bio-based packaging will feature in European regulation, but when and how fast. Brands and retailers that make the switch to certified compostable and bio-based packaging today are not just doing the right thing environmentally, they are getting ahead of a wave that is coming regardless.
Consumers already hold a positive attitude toward bio-based materials. People want products packaged in materials that come from nature, not from oil. For once, it is not the market waiting for regulation to catch up. It is regulation catching up with the market.
