Circular economy in packaging: materials, the PPWR and innovation

Packaging has become one of the main friction points between sustainability, regulation and business. Regulatory pressure, rising raw-material costs and demands for transparency are forcing companies to rethink their packaging from a circular logic.

The circular economy applied to packaging consists of redesigning packaging, materials and usage models to keep resources in circulation for as long as possible, minimise waste and reduce dependence on virgin raw materials. It is not just about recycling, but about eliminating waste from the design stage.

In this article we analyse how to apply circularity to packaging realistically, what the new Regulation (EU) 2025/40 (PPWR) requires, which materials are shaping the future of the sector and how to connect packaging design with regulatory compliance and reporting under the CSRD.

What does circular economy applied to packaging mean?

The circular economy in packaging translates into measurable technical decisions: selecting materials compatible with real recycling infrastructure, reducing weight, mono-materiality, reuse and refill, effective recyclability and traceability of secondary materials.

Every design decision has direct implications for costs, regulatory compliance and ESG reporting. Ecodesign applied to packaging is the tool that connects all these variables from the product's earliest phase.

Why is packaging a critical vector of circularity?

Packaging is one of the most regulated, visible and measurable waste streams. Packaging accounts for a very significant share of the municipal waste generated in Spain and the European Union, which makes the sector a priority focus for regulation, environmental taxation and administrative control.

Packaging is also directly linked to extended producer responsibility (EPR), the Product Producers Register (RPP) and indicators required by the CSRD. Companies that transform their packaging strategy reduce regulatory risk, optimise medium-term costs and strengthen their ESG positioning with customers and investors.

What does the PPWR, Regulation (EU) 2025/40 on packaging, require?

Regulation (EU) 2025/40 on packaging and packaging waste (PPWR) is the new European rule setting the pace of circularity for the sector. It entered into force on 11 February 2026 and, after a transitional period, applies in general from 12 August 2026, the point at which it largely replaces the old Directive 94/62/EC.

Its requirements include that all packaging placed on the market must be recyclable in line with harmonised technical criteria (with full targets from 2030), minimum recycled-content percentages in plastic packaging, reuse targets for certain formats, requirements to reduce superfluous packaging and the restriction of substances of concern such as PFAS in food-contact packaging from August 2026.

We set out the full detail of timelines and obligations in our guide to the EU Regulation 2025/40 on packaging. In the Spanish context, it is best read alongside Royal Decree 1055/2022 on packaging and EPR.

What drives innovation in packaging materials?

Innovation in packaging responds to the convergence of several structural factors.

From a regulatory standpoint, the PPWR, Law 7/2022 on waste and Royal Decree 1055/2022 impose targets for recyclability, reduction and reuse, penalising designs that are not aligned with the circular economy.

On top of this comes volatility in raw-material prices, which accelerates the adoption of secondary materials, and market pressure: distributors, end customers and investors penalise packaging that does not meet clear criteria for circularity and traceability.

Materials of the future in the packaging sector

Materials innovation is evolving towards simpler, traceable solutions that are compatible with existing systems.

High-quality recycled plastics, such as rPET or rHDPE, are becoming standard across multiple sectors. The focus is no longer only on the percentage of recycled content, but on material traceability, food-grade quality and supply stability.

Mono-material packaging is gaining ground because it makes real recycling easier than multi-layer structures that are hard to separate. This technical simplification has a direct impact on EPR costs and circularity indicators.

As for bioplastics, their contribution is limited and highly context-dependent: they only create environmental value when they are compatible with existing recycling or composting systems and are managed correctly. Advanced paper and board, with plastic-free barrier coatings, can replace certain multi-layer packaging where an extreme barrier is not required.

Which innovations do not really scale?

Not all packaging innovation is circular or viable at scale. Some solutions work in pilot settings but fail when taken to market.

Materials without management infrastructure, compostable packaging without separate collection, or solutions with low industrial feasibility create risks of non-compliance and greenwashing. Innovation without scalability does not reduce impact and can increase the company's administrative and reputational burden.

How does circular packaging affect the RPP and EPR?

Every design decision has a direct impact on costs and obligations: the weight of the packaging, the complexity of the material and its real recyclability influence PRO fees, declaration obligations in the RPP and the indicators required under the CSRD.

Reducing weight, simplifying materials and improving effective recyclability lowers both the financial cost and the administrative effort tied to compliance. The annual packaging declaration in the RPP is one of the points where these decisions take shape.

Key indicators for measuring circularity in packaging

Packaging circularity should be measured with clear, actionable indicators: the percentage of recycled material lets you assess regulatory compliance, while kilograms of packaging per unit of product reflect design efficiency.

The real recyclability of the packaging measures its actual environmental impact, beyond theoretical claims, and the associated EPR cost lets you control the financial impact of design decisions. These indicators should be built into ESG systems to ensure consistency and auditability.

What is the relationship between circular packaging and the CSRD?

The ESRS standards, and in particular ESRS E5 on resource use and the circular economy, require detailed information on resource use, waste generation and circularity strategies. Packaging is one of the most relevant and readily auditable data sources in sustainability reporting.

Companies that connect packaging design with their reporting processes gain efficiency and credibility. Platforms such as Manglai make it possible to centralise packaging, EPR, waste and circularity data in a single system aligned with the CSRD.

Common mistakes in sustainable packaging strategies

One of the most frequent mistakes is prioritising image over technical feasibility, adopting solutions that are poorly suited to operational reality. It is also common not to involve suppliers from the early design phases, or to disconnect packaging redesign from ESG reporting.

The absence of clear indicators and internal governance turns circularity into a one-off exercise rather than a structural strategy. The circular economy demands management, data and consistency, not just material innovation.

Circular packaging as a competitive advantage

The circular economy in packaging has become a strategic axis that combines innovation, regulatory compliance and economic efficiency. Companies that take a critical, data-driven view aligned with the PPWR turn packaging from an operational risk into a real competitive advantage.

To get ahead of the PPWR and connect your packaging design with waste and circularity reporting, you can rely on Manglai's waste management module.

Frequently asked questions about circular economy in packaging

Is every recyclable package circular?

No. A package is only circular if it is effectively recycled in practice, not just in theory.

Are bioplastics always better?

Not necessarily. Their impact depends on the context, the management infrastructure available and proper separation.

When does the PPWR apply?

Regulation (EU) 2025/40 entered into force in February 2026 and applies in general from 12 August 2026.

Does circularity reduce costs?

Yes, when it is designed systemically and based on data, reducing weight, EPR fees and management complexity.