Abstract for: Closing the Loop: The Dynamic Challenge of the Circular Economy of Plastics

Despite strong regulatory efforts in Europe, the plastics system remains far from circular, with recycled content still low. A key bottleneck lies in the weak economic viability of mechanical recyclers, who face cost disadvantages, volatile demand, and strict quality requirements. Recent bankruptcies in the Netherlands highlight the risk that circular economy ambitions may not translate into scalable, resilient industry outcomes. We develop a system dynamics model of the Dutch plastics circular supply chain in collaboration with Verpact. The model is informed by 19 interviews and industry workshops, capturing decision-making by key actors, particularly recyclers. It is calibrated to reproduce observed trends, including declining recycling capacity and low PCR uptake, and used to evaluate policy interventions and their consequences. Preliminary findings show that the system remains far from circular, with post-consumer recycled content shares around 8–10%. Mandatory recycled-content requirements alone are insufficient to drive adoption. Effective transition requires coordinated interventions, including restricting imported recyclate and improving the quality of domestically produced recycled plastics to increase market acceptance and stabilize recycler profitability. Ongoing work focuses on extending the model to incorporate quality differentiation and application-specific demand, endogenizing recyclers’ quality decisions, and quantifying trade-offs between high-quality and lower-grade recycling pathways. The goal is to identify policy mixes that align economic incentives, technological constraints, and market dynamics to enable a scalable and resilient circular plastics system. Editing, formatting