2025 Outlook
With the new year underway, Circular’s outlook on the sustainable materials markets remains positive.
In addition to the environmental impact that recycling and sustainable materials represent, we’re particularly excited about the significant growth and economic opportunities, spurred by continued consumer and buyer demand. With that, and building on our AI model and customer work from 2024, Circular is expanding beyond recycled plastic to offer AI sourcing solutions across multiple sustainable and new materials markets this year.
More on our expansion shortly. For now, here’s our take on the sustainable materials markets outlook for 2025 and beyond:
Market projections for recycled plastics are bullish
The global recycled plastic market is expected to reach $142B by 2032 (growing at nearly an 8% CAGR from $67B in 2022). More specifically, the market for post-consumer recycled (PCR) plastic is predicted to grow at a 8.4% CAGR over the next 5 years (from $71B in 2024 to $107B in 2029). Higher growth still (10.6% CAGR) is expected in the recycled plastic packaging market (which accounts for ~2/3 of the recycled plastic demand) reaching $96B by 2032.
✅ Our take:
From our work with blue chip brands and manufacturers, we see corporate focus on sustainability beyond carbon increasing. This observed growth is also reported from McKinsey to cross industry bodies like EMF and CGF: The share of Fortune Global 500 companies with targets or acknowledging the importance in chemicals and plastics expanded from 61% in 2022 to 82% in 2024. We remain bullish about the sustainable materials markets, where we see the main impetus as being a significant sectoral consumer-led economic opportunity…
Consumers seek sustainable products
Sustainable products are achieving higher sales growth than those without sustainability attributes. Despite economic pressure due to persistent inflation, consumers continue to place a premium on sustainability, with nearly 50% of Gen Z and Millennials in the U.S. willing to pay more for environmentally-friendly products – topping the list of desirable product attributes are zero pollution, recyclable materials and minimized packaging.
✅ Our take:
Consumers are growing more concerned about climate change than ever before, with packaging and recyclability being key concerns, and are increasingly looking to brands and retailers for solutions.
Corporate sector’s bold move towards sustainable materials
The corporate sector is evolving its perception of sustainability, moving from seeing it as a cost to viewing it as essential for long-term viability. Corporate sustainability leaders have set ambitious goals, including addressing plastic pollution. For instance, Global Commitment Signatories increased their use of PCR content by nine percentage points from 2018 to 2023—a stark contrast to the global market’s one-percentage-point increase.
✅ Our take:
We anticipate that as companies push to meet their 2025 target of 26% PCR content in their plastic packaging portfolios, they will drive significant demand for PCR materials in the coming year. Circular is poised to support these efforts efficiently.
Buyers expect sustainable materials to dominate by 2030
A global survey of material buyers and sellers reveals a sharp increase in demand for green plastics. While demand remained stable or grew for over 90% of respondents last year, buyers plan to increase the share of green plastics in their procurement portfolios from 23% in 2024 to over 40% by 2030. Notably, 75% of buyers are willing to pay a 3-5% premium to secure sustainable materials by then.
✅ Our take:
This willingness to pay reflects a strong desire to reduce scope 3 emissions and respond to end-user demands. At Circular, we have already seen a surge in demand for our platform’s ability to connect buyers with vetted PCR suppliers, streamlining sourcing and lowering costs.
States and countries continue to push ahead with EPR legislation; tailwinds to favor business growth
Although global regulatory tailwinds subsided in the latter half of 2024 – with lackluster outcomes from COP29 in Baku and from negotiations for a global plastic treaty in Busan – states and countries continue to push ahead with EPR legislation. Seven states in the US have already passed packaging EPR laws, another 10 states proposed EPR legislation in 2024, and some 30 additional countries have EPR schemes in place.
✅ Our take:
Together with continued pressure from the finance, consumer, and broader corporate sectors in favor of EPR legislation and a global plastic treaty (negotiations will resume in 2025), we expect regulatory tailwinds to pick up in the year ahead. While the incoming US administration is not likely to drive environmental regulatory change, it is pro-business, and with a US-first approach this could mean more domestic manufacturers looking for growth opportunities (per the sectoral trends above).
Circular’s platform: proven economic benefits in AI sourcing for PCR, expanding to sustainable and new materials
Over the past few months, Circular has collaborated with 10 blue-chip companies seeking high-quality PCR materials at competitive prices. Our platform’s capabilities—centralizing data, procurement, testing, and tracking—have already delivered measurable savings for our clients, with an average 12% cost reduction compared to benchmarks. We see higher success and adoption rates in PCR when the economics work and the process is efficient for buyer and seller. What’s more, our AI-driven model is directly applicable to adjacent sustainable and new materials markets that are fragmented, opaque, volatile and typically hard for sourcing teams to navigate. We see significant growth opportunities there.
✅ Our take:
By increasing transparency and reducing sourcing friction in otherwise opaque markets, Circular is unlocking new opportunities in the sustainable and new materials that drive manufacturing growth. Our AI-powered platform enables companies to mitigate supply chain risks while capturing substantial consumer-led economic opportunities. Demand for green and new materials is persistent thanks to the pace of innovation, and Circular is ready to meet it head-on.
It’s time to deliver.
Together, we can accelerate the shift toward a more sustainable and prosperous future.
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About Circular
Launched in 2022, Circular.co makes the sourcing of sustainable and next-gen materials easier. We built the world's largest post-consumer recycled (PCR) materials database for brands to navigate markets and make data-driven decisions. Responsible producers can easily use detailed technical spec data to find the right materials at transparent prices from vetted suppliers, all in one online platform. Book a demo here or visit circular.co.