Tomra says recyclers delay investment despite looming EU deadlines

By Vera Dvorakova

July 17 (Reuters) - Norway's Tomra Systems expects Europe's plastics recycling industry to remain cautious for at least another year, despite looming EU recycling deadlines that will require a sharp increase in processing capacity by 2030, CEO Tove Andersen told Reuters.

Europe will need to at least double plastics recycling capacity to meet the requirements under the EU's Packaging and Packaging Waste Regulation, which requires all packaging to be recyclable by 2030, the company said.

High financing costs, economic uncertainty and a lack of confidence that recently higher plastic prices will last are causing customers to take longer to commit to recycling projects, Andersen said.

That leaves Tomra facing a subdued market in plastics and waste sorting even as the long-term need for its equipment grows.

It does not expect a plastics recovery this year and said it may not arrive in 2027 either. In the meantime, stronger aluminium and metals demand is supporting its recycling division, while cost cuts are intended to protect profitability.

"The demand will come. The question is just when," Andersen said, adding that investment would need to begin accelerating by around 2028 for customers to have capacity ready by the 2030 deadline.

Recent increases in oil prices have pushed up virgin and recycled plastic prices, improving customers' cash generation.

However, Tomra has yet to see that translate into stronger orders because recyclers want evidence that higher prices will last before committing to new plants.

(Reporting by Vera Dvorakova, writing by Jesus Calero in Gdansk; editing by Matt Scuffham)