Recycling plastics from the automotive sector and reusing them in vehicle manufacturing processes will be critical in reducing resource consumption and the use of unsustainable plastics. In the period 2025 to 2035, recycled plastics and bioplastics are expected to have respective CAGRs of 29.1% and 25.2%, showing positive growth is expected over the next decade. IDTechEx report, “Sustainable Plastics for Automotive 2025-2035: Market, Players, and Forecasts“, draws upon the various sustainable plastic types, their readiness, and the most viable materials for all stages of a vehicle’s life.
Recycled and bio-based plastics
At the vehicle’s end-of-life, several pathways exist to minimize plastic waste. Remanufacturing can restore certain components, while reuse extends the life of parts by transferring them to other vehicles. Additionally, recycling plastics or producing them from renewable feedstocks offers pathways to reduce material waste and associated emissions.
The report focuses on three major categories of sustainable plastics in automotive applications: bio-based plastics, mechanically recycled plastics, and chemically recycled plastics. These materials are central to reducing dependency on virgin, fossil-based inputs. Blending these with bio-based or recycled composite fillers offers further potential for sustainable component production.
Mechanically recycled plastics are currently the most accessible and widely used in the sector. In contrast, chemically recycled plastics are produced at lower volumes and face limitations in economic viability and compatibility with automotive specifications. Mechanical and chemical recycling processes convert post-use plastic into feedstock for new polymers, supporting a circular manufacturing model that avoids the environmental cost of virgin plastic production.
Bioplastics represent a third alternative but currently face barriers to scale due to high production costs and limited feedstock availability. While some interior parts may be suitable for bioplastics, further innovation and investment are required before broader adoption becomes feasible.
Environmental and regulatory market drivers for sustainable plastics
Environmental regulations and policy frameworks, such as Extended Producer Responsibility (EPR), are accelerating the adoption of recycled and sustainable materials in automotive manufacturing. These policies aim to enhance material recovery, promote closed-loop systems, and reduce carbon emissions.
For example, the European Union’s End-of-Life Vehicles (ELV) Directive mandates that 20% of the plastics used in vehicles must originate from sustainable sources, with at least 15% of this quota derived from recycled vehicle plastics. As additional emissions regulations emerge -especially in the context of growing electric vehicle (EV) adoption – OEMs may seek to align proactively with sustainability objectives and reduce long-term regulatory risk. At the same time, consumer demand for environmentally responsible products continues to rise, reinforcing the business case for sustainable materials.
Challenges of implementation for automotives
One of the primary barriers to adoption is the challenge of replacing well-established, high-performance incumbent materials. Many conventional plastics used in vehicles are selected for demanding requirements, including thermal stability, chemical resistance, strength, flexibility, and optical clarity.
Sustainable alternatives must meet equivalent technical standards to be viable substitutes. However, current limitations in the mechanical and thermal performance of many sustainable plastics restrict their use in critical applications. Cost premiums associated with these materials also pose challenges, especially in cost-sensitive segments of the market.
According to IDTechEx, sustainable plastics are most readily applied in non-structural components such as interior trims, seat cushions, and floor mats. More demanding components, such as light housings, crash structures, seat frames, and thermally stressed electrical parts, are significantly harder to replace due to safety and performance requirements.
Supply chain communication
Currently, many end-of-life vehicles are disposed of through landfilling or incineration, limiting the opportunity for plastic recovery and reuse. However, growing momentum around sustainability is driving the development of material recovery and recycling pathways that enable circularity.
Coordinated action is required across the automotive supply chain to enable this transition. Decisions by OEMs and Tier 1 suppliers will influence the adoption of sustainable materials, but upstream suppliers, including resin producers and compounders, must also align. Transparent communication and collaborative development across the value chain are essential to scaling sustainable plastics in automotive manufacturing.
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