Competitiveness will be driven by efficiency, innovation, and collaboration. By embracing lean principles, investing in technology, and forging partnerships that close supply chain gaps, the industry can make recycled plastics not just a sustainable choice, but also a smart business decision.
By Kristen Rinehart
For plastics recycling to thrive in 2026, recycled materials must compete head-to-head with virgin plastics. Not just on sustainability, but on cost, quality, and reliability. This challenge is not new, but the urgency is growing as brands walk back ambitious commitments for incorporating recycled materials into their products, while legislation continues to mandate higher minimum recycled content levels and Extended Producer Responsibility (EPR) fees.
To succeed, the plastics recycling industry must adopt lean principles and build strategic partnerships that eliminate waste at every stage of the value chain. Freight inefficiencies remain a critical barrier, yet they also represent an untapped opportunity to improve competitiveness. If recycled plastics can deliver equal performance and cost, then choosing them over virgin becomes a no brainer.
The Competitiveness Challenge
Virgin resin pricing is driven by supply and demand, and recycled plastics inevitably follow those trends. When virgin prices fall, recycled feedstock prices drop too, squeezing margins for reclaimers and converters. Today, both markets are at historic lows, creating a storm that many recyclers are struggling to weather. But price alone does not tell the full story. Recycled plastics face added challengesâcontamination, freight and conversion inefficienciesâthat compound complexity and cost beyond those of virgin materials.
To shift this dynamic, recycled plastics must challenge virgin resin on three fronts:
1. Lower the cost of recycled plastics through operational efficiencies
2. Match performance standards of virgin plastics
3. Ensure consistent supply and reliability
Achieving these goals will require a fundamental shift in how recyclers operate. They must move beyond incremental improvements to embrace lean principles, advanced technology, and collaborative supply chains that eliminate waste and unlock efficiency.
Freight: The Hidden Cost Driver
In recycling, every mile matters. From curbside collection to material recovery facilities (MRFs), then to reclaimers, and onto manufacturers, recycled plastics accumulate freight costs at every stage. Unlike virgin resin, which arrives in bulk railcars weighing in at 190,000 lbs., recycled material moves in much smaller boxes or bales, making the cost per pound higher. This inefficiency is a structural disadvantage, but it is also an opportunity for innovation.
Partnerships that can consolidate freight, create regional hubs, and streamline logistics can dramatically reduce these costs. For example, agricultural films, post-industrial scrap, and even clean medical plastics that go unused in hospitals are often landfilled simply because no one has solved the âmiddle mileâ challenge. Both parties are willing to give up or take the product, but how to get it from point âaâ to point âbâ economically remains the challenge.
Building collaborative supply chains to capture these materials could unlock millions of pounds of recycled plastic feedstock. Not just those listed previously, but likely many other materials that are just sitting on shelves waiting to be discarded. Recyclers, logistics providers, and end users can forge partnerships to create economically viable collection and consolidation models. These partnerships will not just divert material from landfills, but also strengthen the recycled plastics value chain and make sustainability commitments achievable. Start looking for potential partners in your community and see what âtrashâ businesses have that could be considered your âtreasure.â
Lean Principles: Eliminating 91²Ö¿â from the Value Stream
The essence of lean manufacturing, which is to eliminate non-value-added activities, applies perfectly to recycling. Recycled plastic feedstock is delivered in bale, stack, or boxed loadâunlike bulk oil and gas, which make up virgin plastics. In many recycling operations, material is received, tipped, boxed, and moved between processes. Every unnecessary movement, idle machine, or rework adds cost without adding value. These are classic examples of waste.
Advanced facilities are tackling this head on by automating material handling, using vacuum conveying systems, and storing in bulk silos rather than boxes. These changes reduce labor, minimize spills, and keep material flowing efficiently.
By applying lean principles, recyclers can create smoother flows, reduce operating expenses, and narrow the cost gap with virgin resin:
⢠Reduce material handling: Instead of multiple tipping, handling, and re-boxing steps, materials can flow seamlessly through vacuum systems, conveyor belts, and in/out of bulk storage.
⢠Reduce contamination and rework: Improved process control and real-time quality inspection reduce downstream defects and rework.
⢠Optimize labor and overhead: Automation reduces reliance on manual processes. Reliable and timely demand signals enable proper production planning, inventory sizing and management, and resource utilization.
Applying lean principles to the recycling process addresses overproduction, excess inventory, and quality defectsâall of which add up to make the final price of recycled plastic less competitive.
Technology and Data: Making Recycled Plastics Manufacturer-Friendly
Quality variation remains one of the biggest barriers to recycled plastics adoption. Unlike virgin resin, recycled feedstock can vary widely in composition and contamination, leading to downtime, scrap, and operator frustration. To overcome these challenges, recyclers and manufacturers must work together to ensure recycled materials perform like virgin resinâdelivering consistency, reliability, and ease of use. Supplier development, material science expertise, and process capability can help recycled materials reach parity with virgin materials.
Investments in advanced technologies are key. Optical sorting and AI at material recovery facilities are improving bale quality while creating additional commodity streams to sell at a premium. At the conversion stage, material science and blending innovations enable recycled compounds to meet strict specifications and run seamlessly on existing equipment, eliminating manufacturing headaches. Real-time contamination checks and optimized blending steps based on tested properties ensures quality and consistency at parity with virgin resin.
Data plays an equally critical role. Recyclers should track and share supplier performance, contamination rates, freight costs, and quality metrics with partners. These insights allow informed procurement decisions that balance quality and cost while building confidence in recycled materials. When recycled plastics offer reliability, efficiency, and cost competitiveness, manufacturers will prefer recycled materials, and plant employees will see no difference when running them on their lines.
The Outlook for 2026
The path forward is clear: competitiveness will be driven by efficiency, innovation, and collaboration. By embracing lean principles, investing in technology, and forging partnerships that close supply chain gaps, the industry can make recycled plastics not just a sustainable choice, but also a smart business decision. The companies that succeed will be those that treat recycling as an integrated, data-driven operation, removing waste at every stage and delivering consistent, high-quality material that manufacturers trust. | WA
Kristen Rinehart is the VP/GM of Recycling for Advanced Drainage Systems (ADS), a leading stormwater solutions manufacturer and one of the largest plastic recycling companies in North America. She can be reached at (864) 419-1143 or e-mail [email protected].