A new report from Smithers, in partnership with London Packaging Week 2026, shows how PPWR, EPR and circularity are “transforming packaging into a source of competitive advantage”.
Coinciding with the Packaging and Packaging Waste Regulation (PPWR) beginning to apply from today (12 August 2026), the report, “The New Economics of Packaging: How PPWR, EPR and Circularity Will Redefine Competitive Advantage Through 2031”, argues that European packaging has reached a tipping point. It predicts that packaging will become an increasingly important source of competitive advantage, and that choices businesses make around materials, recyclability, recycled content, and packaging efficiency will influence margins and environmental outcomes.
Through Extended Producer Responsibility (EPR), packaging that is lightweight, easily recyclable, mono-material and compatible with existing recycling infrastructure will attract lower producer fees, while difficult-to-recycle formats become progressively more expensive to place on the market. For the first time, the report says, many packaging decisions will carry an immediate financial consequence, strengthening the commercial case for designing with circularity in mind.
The Smithers report identifies that securing a sufficient supply of recycled content is one of the greatest commercial challenges. PPWR introduces recycled-content requirements of up to 30% across certain plastic packaging categories by 2030, but the supply of high-quality recycled plastic is struggling to keep pace.
Post-consumer recycled (PCR) plastic already costs around one-third more than virgin polymer, while European recycling-capacity growth has slowed from 17% to 6% between 2021 and 2023.
Businesses that secure resilient PCR supply chains today are likely to compete from a position of strength as demand accelerates over the remainder of the decade, the report considers.
Empty space inside a box is also becoming a commercial liability, according to Smithers. PPWR introduces a maximum 50% empty space limit for transport and e-commerce packaging, while driving greater reuse, harmonised labelling, and future Digital Product Passport requirements. Together, says Smithers, these changes represent far more than another layer of regulation. They signal a “shift towards packaging systems designed to minimise waste, maximise recovery and deliver value throughout their lifecycle”.
Smithers will be exhibiting at London Packaging Week 2026 (16-17 September), where visitors can explore the research with its market intelligence specialists and discuss the wider trends reshaping packaging.
