The 2025 Plastic Crisis Update: What Changed, What Didn’t, and What’s Next

February 26, 2025?

Reflecting on the plastics industry's challenges, progress, and emerging solutions since 2018.

(7-10 minute read)

By Jill Watson, Head of Growth, erthos?

The year is 2018 - the United Nations (UN) and the Ellen MacArthur Foundation (EMF) launched the New Plastics Global Commitment, calling on global businesses and governments to take action towards the plastic crisis. In response, thousands of companies set aggressive 2025 plastic reduction goals. Having recently supported Golden Ventures ’ pre-seed investment into erthos? in 2019, I was thrilled to see the likes of Unilever, L’Oréal, and Nestlé take part in this wave of commitments to drastically reduce their virgin plastic packaging in exchange for compostable alternatives by 2025.?The promise of sustainable material alternatives seemed inevitable.

Fast-forward to 2025, and progress toward a plastic-free world has been slower than I’d hoped. The initial enthusiasm has softened, with once-ambitious 2025 sustainability goals now being pushed to 2030 and beyond, deepening our reliance on the plastics value chain. A 2023 EMF report revealed that brands and retailers have only increased recyclable, compostable, and reusable packaging by a painfully low 2% since the commitments were made five years ago.?

So, what is holding us back?

What were the fundamental barriers that led to the failure of those 2025 goals?

Weak policy & regulations

While some plastic bans and extended producer responsibility (EPR) laws have emerged, they are fragmented and lack any real financial or legal consequences. Europe and Asia are ahead in implementing stricter mandates, but no tax breaks or subsidies exist to incentivize plastic producers and users to invest in change. With the global plastic treaty aiming to establish unified, enforceable policies, there is hope—but it has yet to drive meaningful impact.

Rising bioplastic prices

Since 2018, we’ve seen a rise in the cost of average bioplastics given unstable raw material and production costs and fluctuating demand - leaving the price of bio-based polymers 150-300% higher than conventional polymers, except polypropylene. Although fluctuating crude oil prices can impact the cost of fossil-fuel-based plastics (as seen in prices from 2021-2025), we haven’t seen enough volatility in oil prices to make bioplastics a more attractive option. Cost parity is key to achieving widespread adoption, yet these shifts remain in their early stages.

Greenwashing

Many brands have faced scrutiny after overstating the sustainable claims of their products or packaging. Everything from ‘biodegradable plastics’ that never biodegrade to ‘compostable cutlery’ that are chock-full of PFAS forever chemicals. Brands now hesitate before making large-scale plastic investments and sustainable claims; we don’t blame them.?

Focus on Recycling (aka, the ‘easiest’ way not to solve the plastic crisis.)

While recycling works well for paper, metal, and glass, it’s proven to be a problematic waste treatment method for virgin plastics (which takes up to 500 years to decompose and generates harmful microplastics). ‘Recyclable’ plastic is recycled at a rate of less than 9%, with most ‘recycled’ plastics requiring the re-incorporation of 50% or more virgin plastic to be used again. Despite this, regulations and government investments in Europe and North America continue to push recycling over composting, giving brands an easy way out.?

Fragmented supply chain?

As our CEO and Co-Founder, Nuha Siddiqui , described in her latest post, the sustainable materials value chain is so fragmented and nascent compared to its virgin plastic counterpart. Interconnected challenges within the value chain continue to widen the gap between innovation and market adoption (see Figure 1).?

So we haven’t replaced plastic yet, but what has changed?

Have the only innovations in the last six years been paper straws, compostable cutlery, and shampoo bottles with a higher recycled content? We’re happy to report that, no, that’s not the case. Hundreds of companies have been innovating to push the limits of bioplastics.?

In 2024 alone, Venture Capital funds invested over $300M to support start-ups addressing the global plastic crisis, from companies developing alternatives to those building better waste management systems.?

But it’s not only emerging startups bringing products to market—established chemical companies are expanding their bioplastic portfolios. In the last six years, we’ve seen polylactic acid (PLA) production increase by 75,000 annual tons through a joint venture between TotalEnergies and Corbion, and companies like Braskem and BASF have made significant investments to increase the production of their biopolymers.?

We have loved watching the ever-expanding use cases for biopolymers like PLA and PHA and the launch of new materials made from naturally occurring polymers. Here are some high-growth biopolymer use cases that have caught our attention over the last five years.

High-growth biopolymer use cases:

• PHA & PLA — Once suitable only for rigid applications, these bioplastics have expanded to include flexible packaging, textiles, and high-performance durable goods.?
• Natural Polymers—Next-generation materials have been developed to replace plastic films, coatings, and textiles from mycelium to sugarcane to algae.?
• PEF — A 100% biobased and recyclable replacement for PET. Avantium and Carlsberg have partnered to launch a bio-based fiber beer bottle made from PEF.?

If price parity is the key to broader adoption, the question is—can we get there?

As depicted in Figure 2, although most reliable sources predict an increase in bioplastic prices over the next five years (Average Bioplastic), we believe these materials are still in the early adoption phase, with significant potential for cost optimization. Given this, we have included a second prediction to account for potential technology advancements and cost reductions that could see bioplastics drop below $4/Kg by 2030 (Average Bioplastic + Tech Advancements). This scenario assumes that PLA manufacturing costs could be reduced by 50% due to advancements in production efficiency and raw material usage. As of 2024, PLA accounted for 37.1% of global bioplastics capacity, so cost reduction assumptions were conservatively assumed to impact 25% of bioplastics. If significant plastic packaging levies are put in place, the prices of Traditional Plastics could increase by $1/Kg over the next 5 years, bringing bioplastics closer to cost parity for packaging applications (Traditional Plastics Prediction).?

Achieving this final step of price parity is crucial. Alongside radical innovations and economies of scale, engineered blends offer a strategic pathway to optimize costs and enhance material properties, paving the way for competitive pricing and broader market adoption.

What is our outlook for the future??

Although the slow adoption of sustainable materials has been discouraging, as we enter 2025, we feel more momentum toward 2030 targets than we have ever felt.

We’ve seen brands invest in building packaging teams focused on sustainable alternatives. Sustainable material roadmaps are becoming more realistic, incorporating the bioplastic price premium and tackling one geography’s regulation rather than the entire globe at a time. We’ve also witnessed increased partnerships and consolidation across the market, with larger companies supporting emerging innovators to achieve economies of scale.?

Some barriers, like weak policy or the price of raw materials, cannot be easily controlled. However, we can improve transparency and collaboration across the value chain of sustainable materials.?

Stay tuned to see how we’re working to connect the sustainable materials value chain so that in 2030, we won’t be having the same conversation about slow, incremental progress.