Under the EU State Aid regulations, the European Commission has given the green light to a €500 million French initiative aimed at supporting chemical recycling processes that transform mixed and/or contaminated plastic waste into 'virgin-like' raw materials.

Source: PackagingEurope

This initiative will encompass various types of plastic waste, including trays, films, non-beverage bottles, and textile materials containing a certain amount of polyester. It is available to companies of all sizes across all sectors. The funding will take the form of direct grants, with a maximum allocation of 40%, which is deemed the minimum necessary for project execution.

The Commission has indicated that the scheme is ‘necessary and appropriate’ for advancing chemical recycling of plastics and provides an ‘incentive effect,’ as beneficiaries would not pursue these investments without public funding. Additionally, it notes that France has implemented adequate safeguards to limit the scheme's impact on competition and trade within the EU.

This measure was reviewed under Article 107(3)(c) of the Treaty on the Functioning of the EU (TFEU), which allows Member States to support specific economic activities under certain conditions, as well as the Guidelines on State aid for climate, environmental protection, and energy 2022 (CEEAG). This decision aligns with the Commission’s priorities for 2024-2029, which focus on fostering a more circular and resilient economy.

In related developments, last year we examined the European Commission’s position on a Global Plastics Treaty, which sought to prohibit and phase out ‘problematic’ substances while enforcing a Polluter Pays Principle during discussions at INC-5. It also highlighted the need for tailored criteria and rules to guide nations toward circularity and sustainable product design.

Last month, the Commission prohibited the use of Bisphenol A (BPA) in materials intended for food contact, including reusable plastic bottles, coatings for metal cans, and water distribution coolers, due to health concerns. The ban applies to any products that come into contact with food or beverages and extends to other bisphenols known to harm reproductive and endocrine systems.