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CIRCLE Act 2026: The Future of Advanced Recycling in France

Introduction The adoption of the CIRCLE Act in the United States marks a decisive turning point for the global advanced recycling industry. This revolutionary legislation propo...

22 min read

CIRCLE Act 2026: The Future of Advanced Recycling in France

Introduction

The adoption of the CIRCLE Act in the United States marks a decisive turning point for the global advanced recycling industry. This revolutionary legislation proposes a 30% tax credit for recycling infrastructure, including chemical and molecular recycling facilities.

The impact extends far beyond American borders: European investors are closely watching this fiscal dynamic that could redefine the sector's international competitiveness.

Competitiveness Alert

83% of French executives consider the circular transition a priority, but only 31% have adequate management tools to compete with American tax advantages.

The transatlantic domino effect

French companies face a strategic paradox. On one hand, the AGEC law and future obligations of the Digital Product Passport (DPP) create a restrictive regulatory framework.

On the other hand, their American counterparts now benefit from massive tax advantages to develop their advanced recycling capabilities.

This regulatory asymmetry raises a crucial question: how can French companies anticipate these regulatory developments to remain competitive in 2026?

Risk of European disconnect

Without equivalent incentive measures, Europe risks seeing its advanced recycling investments migrate to the United States, creating a major technological deficit.

A booming market

The figures speak for themselves. The European advanced recycling market is expected to reach €8.2 billion by 2028, representing annual growth of 23%.

This expansion is built on three pillars:

Binding regulations: 65% recycling targets by 2030
Consumer pressure: 78% of Europeans favor eco-responsible brands
Technological innovation: New depolymerization and molecular recycling techniques

ZIQY Opportunity

The new American tax incentives create a unique opportunity for European companies: develop transatlantic partnerships and benefit indirectly from these advantages.

2026 roadmap: key challenges

This article breaks down the four strategic pillars that French companies must master:

Strategic axis	2026 impact	Business opportunity
DPP compliance	Legal obligation	Product differentiation
US partnerships	Access to tax credits	Reduced investment costs
Advanced technologies	3x processing capacity	New revenue streams
European financing	Available green funds	Project co-financing

Expert Quote

"Companies that anticipate the 2026 regulatory developments now will gain a decisive advantage over their competitors." — ZIQY circular economy expert

The race for regulatory adaptation has begun. Companies that can navigate between European constraints and American opportunities will define tomorrow's advanced recycling standards.

Objective: Transform regulatory constraints into sustainable competitive advantages.

Challenges of advanced recycling for French industry

Advanced recycling represents a major challenge for French industry, facing unprecedented technological, financial, and regulatory obstacles.

While the United States accelerates with the CIRCLE Act, France struggles to structure its sector.

Current technological and financial challenges

The initial investment for an advanced recycling unit ranges between €300-500 million, an amount that significantly slows French industrial projects.

This financial barrier is accompanied by high technological complexity.

Pyrolysis and chemical depolymerization technologies require specialized expertise that few French players currently master.

The energy conversion rate remains problematic, with only 60-70% efficiency for the most advanced processes.

The financing trap

Many industrialists underestimate post-installation operational costs: specialized maintenance, personnel training, and continuous certification represent 15-20% of annual CAPEX.

Criteria	France	United States (post-CIRCLE Act)
Tax credit	0%	30%
Cost per unit	€400-500M	€280-350M (after credit)
Announced projects	3-4	15+
ROI timeframe	12-15 years	8-10 years

Impact of European PPWR regulations

The PPWR (Packaging and Packaging Waste Regulation) imposes 65% recycling targets by 2030 for plastic packaging, creating intense regulatory pressure.

This constraint pushes French industrialists toward advanced recycling solutions, but without the fiscal support equivalent to the American CIRCLE Act.

Companies must juggle between regulatory compliance and economic viability.

Compliance strategy

Anticipate PPWR requirements now by integrating advanced recycling into your CSR strategy. Early investors will gain a decisive competitive advantage.

Digital traceability imposed by PPWR also requires additional technological investments, particularly for digital product passports.

International competitive pressure

The United States is widening the gap with the CIRCLE Act offering 30% tax credits on advanced recycling investments.

This measure drastically reduces infrastructure costs and accelerates deployment.

Asia is not left behind: China is investing massively in chemical recycling technologies, with $12 billion allocated over 5 years.

Japan is developing innovative public-private partnerships.

McKinsey Quote

"Europe risks becoming an importer of advanced recycling technologies if it doesn't act quickly on tax incentives" — McKinsey Circular Economy Report 2024

France must imperatively develop a national strategy for advanced recycling, including:

R&D tax credit specific to chemical recycling
Industrial free zones dedicated to the circular economy
Technological partnerships with European leaders

Key takeaway

French advanced recycling requires massive public support to compete with the United States and Asia. The challenge: avoid technological dependence and create a competitive national sector.

The urgency is real: each year of delay widens the competitive gap and compromises French industrial sovereignty in this strategic sector.

CIRCLE Act: a revolutionary fiscal incentive model

The CIRCLE Act (Circular Economy Act) marks a decisive turning point in financing advanced recycling infrastructure in the United States.

This legislation proposes a 30% tax credit for investments in recycling technologies, positioning the circular economy at the same level as renewable energies.

30% tax credit: mechanism and benefits

The CIRCLE Act mechanism operates on the principle of a direct tax credit, reducing the company's owed taxes dollar for dollar.

Unlike traditional deductions, this credit applies directly to the final tax base.

Concrete example: For a €10 million investment in a chemical recycling unit, the company benefits from a €3 million credit, immediately reducing the acquisition cost to €7 million.

Advanced tax optimization

The credit can be carried forward for 20 years if the company doesn't have enough taxes to pay in the investment year, maximizing financial flexibility.

This approach contrasts sharply with current French schemes, limited to accelerated depreciation and research credits.

Scheme	Aid rate	Application	Ceiling
CIRCLE Act (US)	30% direct credit	Immediate	Unlimited
French R&D credit	30% R&D credit	Research only	€100M/year
French accelerated depreciation	Variable	Staggered	Depending on asset

Types of eligible infrastructure

The CIRCLE Act specifically targets "advanced recycling facilities", including:

Chemical recycling: pyrolysis, gasification, depolymerization
Automated sorting: AI and robotics for material separation
Biorecycling: enzymatic and biological technologies
Collection infrastructure: reverse logistics systems

Strict technology definition

Only technologies that can transform waste into raw materials equivalent to virgin are eligible. Traditional mechanical recycling remains excluded.

This selectivity aims to accelerate adoption of the most promising technologies, those capable of processing complex plastics currently non-recyclable.

Projected return on investment

The CIRCLE Act's economic projections reveal a transformative impact on advanced recycling project profitability.

Comparative ROI analysis:

Without CIRCLE Act: Average ROI of 8-12% over 10 years
With CIRCLE Act: Projected ROI of 15-22% over 10 years

The leverage effect is particularly marked on CAPEX-intensive projects.

A 50,000 tons/year pyrolysis unit, requiring €25 million initial investment, sees its profitability threshold drop from 6 to 3.5 years.

Association Quote

"The CIRCLE Act transforms the economic equation of advanced recycling, making previously marginal technologies competitive." — Association of Plastic Recyclers

Key takeaway

The 30% credit reduces capital costs immediately, unlike staggered depreciation. This accelerated liquidity allows faster financing of subsequent projects, creating a virtuous scale effect.

This fiscal dynamic could inspire European regulation, particularly within the Green Deal framework and future WEEE directive revisions.

Advanced recycling technologies: 2024-2026 state of play

The advanced recycling landscape is experiencing major technological acceleration, driven by new American fiscal incentives from the CIRCLE Act and European traceability obligations.

These innovations are radically transforming recovery rates for complex plastics.

Chemical pyrolysis and depolymerization

Chemical pyrolysis is emerging as the reference solution for treating multi-layer plastics impossible to recycle mechanically.

Industrial installations now achieve 85-90% recovery rates for PE/PP mixtures.

Processing costs range between €450-650 per ton depending on input stream complexity.

This technology has the advantage of producing virgin-quality monomers, meeting the strictest food requirements.

Regulatory opportunity

The 30% tax credit proposed by the CIRCLE Act drastically reduces pyrolysis investment costs. French industrialists can draw inspiration from this model for their European projects.

Deployment timeline: The first French commercial units are expected by end of 2025, with industrial scale-up planned for 2026-2027.

Enzymatic recycling and biotechnologies

Enzymatic recycling revolutionizes PET treatment with recovery rates reaching 95% purity.

This biotechnology decomposes molecular bonds at low temperature, preserving polymer quality.

Eastman and Carbios dominate this segment with processing costs of €380-420 per ton of PET.

The competitive advantage lies in the ability to treat colored polyester textiles, a major challenge for mechanical recycling.

Technology	Recovery rate	Cost/ton	Industrial maturity
Chemical pyrolysis	85-90% (PE/PP)	€450-650	Deployment 2025-26
Enzymatic recycling	95% (PET)	€380-420	Commercial since 2023
Hybrid solutions	75-85% (multi-stream)	€520-580	Industrial pilots

Energy challenge

Enzymatic technologies remain energy-intensive despite their performance. Integrating renewable energies becomes crucial to meet CSRD carbon targets.

Hybrid solutions and emerging innovations

Hybrid technologies combine mechanical and chemical recycling to optimize complex streams.

These solutions achieve 75-85% recovery rates on multi-material mixtures, with intermediate costs of €520-580 per ton.

Innovation focuses on artificial intelligence for automated sorting and blockchain for stream traceability.

These emerging technologies directly respond to European Digital Product Passport requirements.

ADEME Quote

"Hybrid solutions represent 40% of advanced recycling investments planned for 2025-2026, as they better adapt to the diversity of French waste streams." — ADEME Report 2024

Key takeaway

The French market favors modular and scalable solutions. Investments focus on technologies capable of treating multiple types of plastics simultaneously, thus optimizing installation profitability.

This technological revolution is transforming the French circular economy, with a potential to process 2.3 million tons of complex plastics by 2026.

Companies that integrate these innovations now gain an edge over their competitors.

Business opportunities and new economic models

Advanced recycling revolutionizes retail economic models by creating new revenue sources and drastically reducing raw material costs.

Pioneer European retailers already report 15-25% raw material cost reductions through integrating these technologies.

Industrial partnerships and financing

Long-term processing contracts (7-15 years) emerge as the dominant model, offering crucial economic visibility for investments.

These agreements guarantee stable supply of recycled raw materials at fixed prices, protecting retailers against oil price volatility.

The American CIRCLE Act proposes a 30% tax credit on recycling infrastructure investments, significantly reducing barriers to entry.

In Europe, public-private partnerships multiply with state-enterprise co-financing reaching 60-80% of installation costs.

Optimized financing

Combine CIRCLE Act tax incentives with European ecological transition funds to reduce your investment costs by 40-50%. ZIQY supports this complex financial structuring.

Partnership type	Initial investment	Projected ROI	Profitability timeframe
Long-term contract	Low (outsourced)	12-18%	3-4 years
Joint venture	Medium (shared)	20-25%	4-5 years
Vertical integration	High (proprietary)	25-35%	5-7 years

Supply chain integration

Vertical integration becomes strategic for major retailers.

H&M and Zara invest massively in dedicated recycling units, creating closed-loop textile-to-textile systems with 85-90% recovery rates.

Regional collection hubs optimize reverse logistics.

Carrefour develops a network of 50 centers in France, processing 15,000 tons/year of food plastics for its own packaging.

Supply chain risk

Advanced recycling requires critical volumes (minimum 5,000 tons/year). Without this critical mass, unit costs explode and compromise profitability.

Blockchain traceability becomes mandatory to certify recycled material origin, meeting Digital Product Passport European requirements from 2026.

Value creation for retailers

New models generate multiple revenue streams:

Carbon credit sales: €15-30/ton CO2 avoided
Supply savings: 20-40% vs virgin materials
Circular product premium: +10-15% margin
B2B recycling services: new external revenues

Decathlon created a dedicated subsidiary generating €12M revenue in 2023 via recycling third-party sports products.

The group projects €50M by 2027.

Key takeaway

Advanced recycling transforms waste into strategic assets. Retailers integrating these technologies now will benefit from a 3-5 year competitive advantage over competitors.

Director Quote

"We no longer just sell products, we manage material flows in a profitable circular economy." — Sustainability Director, Casino Group

These disruptive economic models require specialized technical expertise and long-term strategic vision.

ZIQY supports this transformation by structuring industrial partnerships and optimizing financial flows for your circular projects.

Anticipating French regulation 2026

Probable AGEC law developments

The AGEC law should experience significant reinforcements by 2026, particularly on chemical recycling.

Signals from the Ministry of Ecological Transition point toward extending obligations to complex plastics currently not covered.

The objective of 100% recycled plastics by 2030 will require formal integration of chemical recycling into EPR sectors.

This legal recognition will allow companies to count these volumes in their recycling obligations, creating a major economic lever.

Strategic anticipation

Companies investing now in chemical recycling partnerships will benefit from a competitive advantage when AGEC obligations extend in 2026.

Technical standards and certifications

European harmonization imposes convergence of French technical standards toward EN 15343 and ISO 14855 norms for chemical recycling.

This evolution will create a unified framework for process certification.

Expected certifications will include:

Molecular traceability: polymer tracking in closed loop
Energy efficiency: minimum performance thresholds (≥85% recovery)
Output purity: quality standards for recovered monomers
Carbon impact: mandatory LCA with ≥60% reduction vs virgin production

Certification trap

New certification timelines could reach 18-24 months. Anticipating from 2024 is critical to avoid costly supply disruptions.

Traceability obligations

The European Digital Product Passport (DPP) will likely be transposed into French law with reinforced requirements.

Each plastic product must integrate a complete history of its recycling cycles.

Blockchain will become the reference infrastructure to guarantee data immutability.

Companies must be able to prove the veracity of their circular claims under penalty of sanctions reaching 4% of annual revenue.

Aspect	French regulation 2026	US CIRCLE Act
Tax incentives	Extended R&D credit (30%)	30% investment credit
Traceability obligations	Mandatory DPP + blockchain	Voluntary reporting
Recycling thresholds	100% plastics (2030)	Sectoral objectives
Sanctions	4% revenue (non-compliance)	Fixed fines

Key takeaway

France adopts a more restrictive approach than the United States, favoring regulatory obligations over tax incentives. Companies must prepare dual compliance: technical AND digital.

Regulatory anticipation becomes a decisive competitive advantage.

Players who master traceability tools and European technical standards today will gain an edge in a French market estimated at €2.8 billion in 2026.

How to optimize your recycling strategy with ZIQY

Facing new 2026 regulations, companies must rethink their advanced recycling approach.

The 30% tax credits from the CIRCLE Act create a unique opportunity to modernize your infrastructure, but you need to know how to do it effectively.

The REFIT module: intelligent refurbishment management

ZIQY's REFIT module revolutionizes refurbishment flow management by centralizing all operations on a single platform.

This solution enables real-time management of advanced recycling processes, with complete visibility on performance.

Key REFIT module capabilities:

Automated refurbishment cycle planning
Internal logistics flow optimization
Material recovery rate tracking by category
Unified interface for all supply chain actors

Cost optimization

By automating refurbishment cycle planning, companies reduce their management costs by 30% while maximizing use of new tax credits.

DPP: complete traceability with digital product passports

Digital Product Passports (DPP) constitute the foundation of 2026 regulatory compliance.

ZIQY natively integrates this technology to ensure 99.5% traceability across all processed materials.

Functionality	Traditional approach	ZIQY DPP solution
Material traceability	70-80%	99.5%
Reporting time	2-3 days	Real-time
AGEC compliance	Manual	Automated
Management cost	High	-30%

Each product receives its complete digital identity, including composition, origin, treatments received and recycling potential.

This approach guarantees automatic regulatory compliance while optimizing operational decisions.

ROI and performance: measurable results

ZIQY implementation generates immediate, measurable gains.

Companies observe a 40% improvement in operational efficiency within the first 6 months.

Key takeaway

The REFIT + DPP combination enables 30% management cost reduction and 99.5% traceability, while ensuring automated regulatory compliance.

Quantified benefits:

Administrative cost reduction: 30%
Traceability improvement: 99.5%
Compliance time divided by 5
Positive ROI from 8 months

Don't wait

CIRCLE Act tax credits are time-limited. Companies that delay modernizing their infrastructure risk missing this financing opportunity.

Integrating ZIQY into your advanced recycling strategy is no longer an option but a competitive necessity.

The platform transforms regulatory constraints into operational advantages, positioning your company as a circular economy leader.

Expert Quote

"Companies investing now in advanced recycling solutions benefit from a dual advantage: regulatory compliance and cost optimization." — ZIQY Expert

To discover how ZIQY can transform your advanced recycling approach, consult our comprehensive guide on DPP traceability solutions.

Frequently Asked Questions

1. What are the differences between mechanical and advanced recycling?

Mechanical recycling transforms plastic waste through physical processes (grinding, washing, melting) without altering chemical structure.

It's limited to clean, homogeneous plastics, with quality degradation at each cycle.

Advanced recycling (or chemical) decomposes polymers at the molecular level through pyrolysis, gasification or depolymerization.

This approach can treat contaminated, multi-layer and degraded plastics, producing virgin-quality raw materials.

Criteria	Mechanical recycling	Advanced recycling
Recycling rate	15-20% of plastics	Up to 95% of plastics
Output quality	Degraded (-30% properties)	Equivalent to virgin
Initial investment	€2-5M	€50-200M
Operating cost	€200-400/ton	€600-1200/ton

Expert advice

Combine both approaches: mechanical recycling for clean streams (30% cost reduction) and advanced for complex waste. This hybrid strategy optimizes overall ROI.

2. How to calculate ROI on advanced recycling investment?

ROI calculation integrates several variables specific to advanced recycling:

Annual revenue = (Processed volume × Material sales price) + Carbon credits + Avoided waste taxes

Annual costs = Energy + Raw materials + Personnel + Maintenance + Depreciation

With CIRCLE Act 2026, the 30% tax credit on infrastructure investments significantly reduces initial CAPEX.

Key takeaway

Observed average ROI: 12-18% over 10 years for 50,000+ tons/year installations, with profitability threshold reached between 4th and 6th year depending on technology.

3. What certifications are required for infrastructure?

Advanced recycling infrastructure must obtain several mandatory certifications:

Environmental certifications:

ISO 14001 (environmental management)
REACH (chemical substance registration)
ICPE authorization (Classified Installation for Environmental Protection)

Product quality certifications:

ISCC PLUS (circular materials traceability)
GRS (Global Recycled Standard) for textiles
Food-grade certification if food contact

Trap to avoid

Obtainment timelines can reach 18-24 months. Launch procedures from the design phase to avoid costly commissioning delays.

4. How to integrate advanced recycling into existing supply chain?

Integration requires a systemic approach in 4 key phases:

Phase 1: Flow audit - Map plastic waste by type, volume and quality (6-8 weeks)

Phase 2: Strategic partnerships - Secure supply via long-term contracts with collectors and distribution via agreements with processors

Phase 3: Logistics adaptation - Modify sorting centers, create dedicated storage areas, train teams on new quality standards

Phase 4: Digital traceability - Implement blockchain tracking systems for 2025 DPP (Digital Product Passport) compliance

Expert Quote

"Successful advanced recycling integration requires a holistic supply chain vision, not just a technological addition" — ZIQY Circular Supply Chain Expert

5. What are regulatory compliance timeframes?

2026 regulatory timeframes vary by size and complexity:

SMEs (< 50,000 tons/year): 18 months from January 2026

Large installations: 12 months with possible 6-month temporary derogation

Critical timeline:

Q1 2026: Compliance file submission
Q2 2026: Mandatory technical audits
Q4 2026: Complete commissioning required

Non-compliance exposes to 2% revenue fines and operation prohibition.

Regulatory anticipation

ZIQY supports its clients in regulatory preparation from 2024 with a free pre-compliance audit. Contact our experts to secure your compliance planning.

Conclusion: Towards an advanced recycling revolution by 2030

The American CIRCLE Act is only the first stone of a global regulatory edifice taking shape for the 2026-2030 decade.

With its 30% tax credits for advanced recycling infrastructure, the United States lays the foundation for a major industrial transformation.

This American dynamic foreshadows similar evolution in Europe and France.

From 2025, French companies must anticipate these changes to avoid competitive lag against American players benefiting from substantial tax advantages.

2026-2030 vision: Advanced recycling democratization

The coming years will mark a decisive turning point in advanced recycling accessibility.

Three factors will converge to transform the market:

Infrastructure cost reduction through tax incentives will enable SMEs to access technologies previously reserved for large groups.

Projections indicate a 40% reduction in investment costs by 2028 for pyrolysis and depolymerization installations.

European regulatory evolution will progressively align with the American model.

The European Commission is already studying similar incentive mechanisms within the Green Deal framework, with probable implementation from 2026-2027.

Key business opportunity

Companies investing now in advanced recycling will benefit from a 3-5 year competitive advantage over competitors, while anticipating future regulatory obligations.

Supply chain transformation

Advanced recycling's impact will extend far beyond the waste sector.

By 2030, we will witness complete supply chain restructuring:

Vertical integration: Plastic producers will invest directly in chemical recycling technologies
New partnerships: Strategic alliances between communities, industrialists and specialized tech companies
Enhanced traceability: Obligation to document origin and destiny of each recycled material

Fragmentation risk

Without international standards harmonization, the market risks costly regulatory fragmentation for multinational players.

The imperative of anticipation for French companies

French companies can no longer wait.

83% of executives surveyed in a recent McKinsey study consider circular transition a priority, but only 31% have adequate management tools.

The opportunity window is closing rapidly.

First investors in advanced recycling will capture the most profitable market shares, while laggards will face exponential compliance costs.

Key takeaway

Advanced recycling will shift from "nice-to-have" to business imperative status by 2027. Regulatory anticipation becomes a decisive competitive advantage.

Support becomes crucial in this transition.

Companies need management and traceability tools adapted to future regulations to navigate serenely through this circular revolution.

Expert Quote

"Companies mastering their circular value chain today will be tomorrow's leaders." — ZIQY circular economy expert

Discover how ZIQY supports your transition to the circular economy with management and traceability solutions designed to anticipate tomorrow's regulations and transform your constraints into business opportunities.