On February 11, 2025, the Packaging and Packaging Waste Regulation (Regulation (EU) 2025/40) (PPWR) entered into force. On August 12, 2026, it became directly applicable across the European Union. That second date is the most important one. It marks the moment when packaging decisions stop being a matter of preference and become a matter of law, with data to prove it.
This four-part series looks at what PPWR really asks of the plastics sector and how virtual twins help teams turn regulatory pressure into an advantage. We’ll draw on the perspectives of Dassault Systèmes’ sustainability leads across material science, engineering, operations and compliance. This first post sets the stage: why plastic is so hard to replace, what PPWR actually requires and the practical challenges you’ll face as the deadline approaches.
The Plastic Paradox
To respond intelligently to PPWR, you first have to understand why plastic became the default in the first place. Plastics became the default because they’re versatile, lightweight, durable and cost-effective, with lower production energy and water use than many conventional materials, advantages that are hard to engineer around.
Yet, their environmental cost is severe. The Ellen MacArthur Foundation projects annual plastic entering the ocean will nearly triple (from 11 million tonnes in 2016 to 29 million tonnes in 2040) the trajectory PPWR is designed to interrupt.
The packaging value chain presents myriad challenges and opportunities for suppliers, nowhere more so than in plastics. confirms that consumers clearly prefer non-plastic packaging, specifically paper and glass, over plastic, and that consumers and regulators alike are pushing for sustainable alternatives. Yet the supply side lags: even in the EU, one of the most advanced recycling markets, only about 40% of plastic waste was recycled in 2023, and Bain projects a 30–40% gap between demand and available recycled supply for plastics like PP and PE by 2030. Plastic stays the default not because brands choose it, but because the system isn’t yet built to replace it.
Regulation and market growth are climbing at the same time. In Europe, the Packaging and Packaging Waste Regulation has introduced plastic levies and recycling mandates that meaningfully change cost competitiveness, with similar trends emerging in select US states and parts of Asia. Even so, the global plastic market is projected to grow from $963.7 billion in 2025 to $1,361.3 billion by 2033. The material isn’t going away. It’s being forced to change.
That’s the paradox engineering leaders have to design around: a material that’s too useful to abandon, too polluting to continue using as-is and too regulated to treat casually.
One response gaining traction across the industry is: designing circularity in from the start, through material innovation, reduction, reuse, and recyclability and recovery, so materials stay in use longer, waste drops, carbon impact falls, and supply chains grow more resilient.
Packaging Legislation: What PPWR Actually Requires
PPWR sets binding thresholds with fixed dates and covers all packaging placed on the EU market, regardless of material or origin. It applies equally to EU producers and international suppliers, any company exporting to the EU, or supplying material to someone who does, carries the same reformulation responsibility.
The targets are specific: plastic packaging must hit 10–35% recycled content by 2030 and 25–65% by 2040. Grouped, transport and e-commerce packaging can’t exceed 50% empty space (the unused volume inside a shipped package once the product and any protective filler are accounted for) by 2030, and all packaging must meet a graded recyclability standard that tightens through 2035. The clock started August 12, 2026.
The most important shift is nature of decision-making around packaging. As Dave McLean, CPG-Retail Industry Business Development Director, puts it:
” PPWR is forcing a shift in how CPG brand owners think about packaging and their packaging systems, expanding from a consumer-centric, marketing and cost-of-goods decision to an increasing compliance and engineering-scale one .”
Packaging can no longer be finalized in isolation and handed to procurement. Teams must prove, with data, that a format is recyclable in the systems that actually exist across EU member states, not recyclable in theory. Companies that treat these requirements as an opportunity to rethink their products and strategic positioning will gain a competitive edge. Those that don’t risk falling behind. The window to get ahead of it is now.
Industry Challenges: Turning Complexity Into Opportunity
Understanding the rules is one thing. Meeting them under real-world constraints is another. PPWR introduces genuine complexity, but each challenge also points to where competitive advantage can be built.
The timeline creates a roadmap
New rules have started in August 2026, with requirements tightening every few years through 2040. That’s not a single compliance event, it’s a structured path. Recycled-content thresholds climb, recyclability grades tighten and each milestone signals where the market is heading. Companies that build a repeatable redesign capability now won’t just meet each threshold, they’ll reach it ahead of the competition.
Shifting material economics open new doors
New levies and recycling rules are changing which substrates make sense, prompting teams to rethink packaging materials entirely. As Walid Darghouth, CPG-Retail Industry Business Development Director, explains:
“PPWR, EPR (Extended Producer Responsibility) and sustainability regulations are driving continuous packaging redesign and the transition to recyclable, mono-material and lightweight solutions.”
That rethinking introduces real uncertainty. Material substitution affects performance, protection, manufacturing efficiency and consumer experience simultaneously. With all of this in mind, it is also important to note that sustainability can’t simply be claimed. It must be proven with verified data. But this pressure also creates opportunity. Companies that connect packaging, material science and manufacturing rather than keeping them siloed will manage design changes more effectively, and digital modeling can significantly reduce the physical iterations needed before industrialization.
The commercial opportunity is immediate
According to Bain & Company, nearly six in ten packaging buyers say they’d switch suppliers within three years if sustainability targets aren’t met. Balancing cost, compliance, manufacturability and consumer expectations across an entire portfolio is a genuine operational challenge but it also makes PPWR a revenue opportunity for companies that move early and position themselves as credible partners for sustainability-focused buyers.
Data clarity is a genuine advantage
Compliance requires detailed data on every packaging material used and most organizations aren’t there yet. Fragmented tools, data silos and disconnected teams compound the challenge as regulatory pressure, margin volatility and portfolio complexity grow. As Sarah Klinger, Industry Growth Leader CPG-Retail, EuroNorth, notes, competitive advantage now requires a connected digital backbone that delivers speed, flexibility and safety at scale. Companies that build that infrastructure first will move faster and with greater confidence.
Material substitution and machine compatibility demand production flexibility
Clara Wiltberger, Sustainability and New Energy Business Consultant – Industrial Equipment, captures the machine-level complexity at stake:
“New substrates can affect performance and machine compatibility, and changing regulatory requirements place additional constraints on packaging operations. Customers will either have to replace their production machines or be able to adapt them to make them more flexible. For example, high recycled content levels can destabilize settings that have been calibrated over many years.”
Meeting a 25–65% recycled-content target by 2040 means designing for process stability alongside procurement. Customers of packaging machinery are already demanding smart automation and production flexibility. The pressure to produce more formats and stock-keeping units (SKUs) with fewer resources is making flexibility a key selection criterion. Companies that plan for that flexibility now will scale new formats and SKUs more efficiently without sacrificing performance or compliance.
From Constraint to Competitive Advantage
The Packaging and Packaging Waste Regulation has redrawn the map for plastics packaging, and August 12, 2026 marked the start of the clock. Engineering leaders who thrive will treat the regulation as a strategic driver, not a compliance burden designing for recyclability now, planning recycled-content increases as a curve rather than a cliff, and organizing packaging data before the deadline arrives.
These decisions can’t be made on intuition or in silos. They demand a connected, data-driven approach where material, machine and regulation are modeled together before capital gets committed. That’s where virtual twins prove their value, letting teams simulate performance and compliance before a single physical prototype is cut. In post two, we start where the transition really begins: at the molecular level, where advanced chemistry and material modeling make PPWR-compliant packaging not just possible, but practical.
This blog article is the first in a four-part series exploring the implications of the Packaging and Packaging Waste Regulation and what it means for the future of packaging innovation. Continue the series with the articles below:
Part 2: Material Science: Driving Innovation for PPWR Compliance
Part 3: A Multi-Scale Collaboration: Why PPWR Demands One Connected Value Chain
Part 4: Expanding the Definition of Performance: How PPWR Rewrites the Packaging Scorecard
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This article was developed in collaboration with experts from across the company, whose insights and expertise contributed to its content and perspectives: Sarah Linger, Industry Growth Leader, CPG-Retail, EuroNorth; Renaud Le Chatelier, VTE Industry Solution Experience Expert, VTaaS Portfolio; Carlijn Goedhart, WW DELMIA Sustainability Industry Process Expert Specialist; Guillaume Belloncle, CATIA MBSE Strategic Engagements Industry Process Director; Stephen Todd, Senior Solution Strategy Specialist, BIOVIA Strategy & Contract Research; Walid Dargouth, CPG-Retail Industry Business Development Director; Mel Creasey, SIMULIA Industry Business Senior Consultant; Dave McLean, CPG-Retail Industry Business Development Director; and Clara Wiltberger, Sustainability & New Energy Business Consultant – IE.