Recycling industry, revenues of 7 billion euros but margins down to -0.6%

The recycling industry is a complex reality , based on a multiplicity of supply chains differentiated by material, origin of waste, legislative frameworks and geographical contexts that over time have given rise to market niches, limiting the homogeneous growth of the entire sector. After a decade of slow but constant expansion in terms of turnover and volumes, observed on a sample of 50 companies that in 2023 accumulated revenues of 7 billion euros , there was a decline in average margins that fell to -0.6% . Faced with growing tensions in the secondary raw materials (SRM) markets and the challenges posed by European sustainability objectives, today the industry is called upon to undertake a profound strategic and regulatory rethink that also involves national and European institutions in a process aimed at strengthening its competitiveness. These are some of the findings that emerged from the new study by the AGICI Observatory on the Recycling and Waste Industry entitled The economic drivers of the recycling and waste industry , presented today during the event organised by AGICI in Milan .

To explore the dynamics of marginality and the mechanisms of value creation, the Observatory has developed a model that reconstructs the linear flow of the five supply chains of plastic, paper, glass, organic and WEEE, involving nine types of operators active along the various processing phases. The analysis highlights extremely heterogeneous results, with the collection operator collecting only 2% of marginality and the waste-to-energy plant recording the best performance, reaching 19% . The plastic and paper selection plants exceed the 10% threshold, while the majority of recyclers , with the exception of paper mills (12%), are positioned below.

In order to validate this evidence, the AGICI model was compared with a sample of 50 companies active in the five supply chains , examining the main economic and financial data available in the period between 2017 and 2023. In 2023, the sample generated aggregate revenues of over 7 billion euros and made investments of 1.04 billion , of which approximately 682 million supported by publicly owned companies . However, the margin went from approximately 5% in the three-year period 2017-2019 to a negative value of -0.6% in 2023 , returning the picture of a sector in difficulty in preserving its economic balance despite the growth in volumes traded.

The report then surveyed 305 M&A transactions carried out between 2017 and 2025, with the aim of outlining the strategies adopted by companies in the sector. 2023 saw a peak with 73 transactions , followed by a slight reduction in 2024 , when there were 43 transactions. Overall, 51% concerned plant investments , 41% acquisitions , while exits from the market and joint ventures both stood at 4% . Finally, capital flows were concentrated above all in the organic segment (19%), followed by glass (12%), plastic (9%), paper (8%) and WEEE (6%) .

Looking to the future, the AGICI Observatory identifies a tripartite intervention aimed at reversing the negative trend of marginality starting from the synergy between companies and institutions . It foresees a change of strategic paradigm in companies, a regulatory reform oriented towards efficiency and an innovation in industrial policies . In this sense, companies will have to rebalance their revenue model, shifting the focus from the sole management of materials to the valorization and marketing of outputs , raising the quality of recycling processes and, where necessary, sizing the structures to achieve economies of scale and facilitate access to capital.

At the same time, the institutional context requires a comprehensive reorganization that focuses on regulatory simplification , governance uniformity , strengthening and centralization of EPR systems , implemented through coordinated action between national institutions and European authorities in order to guarantee high-quality collections and contain the costs of market participation. Finally, at the Community level, it is essential to unambiguously define the characteristics of secondary raw materials and ensure their protection from non-compliant imports in order to promote the competitiveness of MPS compared to virgin materials and strengthen the economic and environmental sustainability of the entire recycling industry.

“The results presented today provide a snapshot of a sector that is having a number of difficulties in sustaining itself,” said Marco Carta, CEO of AGICI. “The time has come to pursue a policy of redesigning the sector that leads to integrated and shared development, aimed at the growth of the entire market. In this sense, companies and institutions must collaborate to redefine strategies, simplify the regulatory framework and build large and dynamic markets for secondary raw materials, transforming recycling into the main driver of innovation and sustainability.”

“The recycling industry today is facing a growth paradox, with revenues increasing but margins decreasing. In this context, the ones who pay the price are the actual recycling plants, the final part of the supply chain, for which the business model is increasingly less sustainable”, commented Eugenio Sini , Coordinator of the Recycling and Waste Observatory. “The extreme fragmentation into narrow market niches does not benefit any operator but, on the contrary, jeopardises the stability of the sector: it is therefore essential to encourage a cooperative approach to grow the market and identify new ways to valorise recycled materials downstream of the processes”.