In August 2026, Smithers, in association with London Packaging Week 2026, established a report about the packaging industry, revealing facts such as the industry, which was once driven by design, functionality, and sustainability, now determines cost, competitiveness, and long-term profitability.
The report, The New Economics of Packaging: How PPWR, EPR and Circularity Will Redefine Competitive Advantage Through 2031, states that European packaging has finally reached a tipping point. As the Packaging and Packaging Waste Regulation (PPWR) begins to apply from August 12, 2026, the packaging industry will immediately be seen as an important source of competitive advantage. The decisions made by the packaging industry revolving around materials, recyclability, recycled content, and packaging efficiency will influence margins and environmental outcomes as well in the foreseeable future.
Eco-modulated Extended Producer Responsibility (EPR) is changing the economics of packaging. As per the new framework, the packaging that is lightweight, easily recyclable, mono-material, and compatible with existing recycling infrastructure will help to attract lower producer fees, while on the other hand, difficult-to-recycle formats become progressively more expensive to place on the market. Hence, for the first time, multiple packaging decisions will carry an immediate financial consequence, strengthening the commercial case for designing with circularity in mind. One of the greatest commercial challenges identified by Smithers is securing enough supply of the recycled content.
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 also 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 are currently able to secure resilient PCR supply chains today are likely to compete from a position of strength as demand accelerates over the remainder of the decade. For metal packaging, carbon is becoming as commercially important as recyclability. The Carbon Border Adjustment Mechanism (CBAM) is introducing entirely new cost considerations into European steel and aluminum supply chains. For producers, sourcing decisions are becoming as much about managing future regulatory exposure as controlling material costs.
The space inside a box nowadays is also becoming a commercial liability. PPWR introduces a maximum 50% space limit for transport and e-commerce packaging, while driving greater reuse, harmonized labelling, and future Digital Product Passport requirements. Such changes altogether represent far more than another layer of regulation. Such changes signal a major shift towards packaging systems designed to minimize waste, maximize recovery, and also deliver value throughout their lifecycle.
Josh Brooks, divisional director – Packaging at Easyfairs, says, “For a long time, businesses viewed packaging as something that supported commercial success. Increasingly, packaging is becoming one of the things that determines it. That’s a profound shift, and it's changing conversations in boardrooms just as much as it is in design studios. Decisions around materials, recyclability, and circularity now influence far more than environmental performance. They affect producer fees, supply-chain resilience, access to recycled materials, regulatory exposure, and ultimately long-term competitiveness.
The organisations that recognise those connections first will be best positioned to succeed. This report doesn’t simply explain how regulation is changing the packaging landscape. It shows how those changes are reshaping the economics of packaging, helping businesses understand where the greatest risks lie, where the biggest opportunities are emerging, and how today’s packaging decisions will influence tomorrow’s commercial performance.”
Smithers will be exhibiting at London Packaging Week 2026, where visitors can explore the research along with market intelligence specialists and can also discuss the wider trends reshaping packaging, from circularity and recycled-content markets to regulation, materials, and long-term industry forecasting.
The London Packaging Week will be held in September 2026, bringing together more than 220 exhibitors, over 90 expert speakers, and 5,700 packaging professionals from across luxury, beauty, premium drinks, and FMCG. As packaging moves from an operational consideration to a boardroom priority, the LPW provides the opportunity to understand what the shift means and how businesses can respond to it accordingly.
Smithers is a multinational provider of testing, consulting, information, and event services focusing on the packaging, paper, and print industries. The company has decades of experience in assisting with supply chains globally, with regulatory compliance, transit simulation, and market research.
24 August 2026
24 August 2026
24 August 2026
24 August 2026