Veolia invests £70 million in UK's first closed-loop PET tray recycling facility
Investment will tackle major recycling gap by processing 80,000 tonnes annually at Shropshire site
Veolia has announced a £70 million investment to establish the UK's first closed-loop PET tray recycling facility at Battlefield near Shrewsbury, Shropshire. The plant will process approximately 80,000 tonnes of mixed plastics annually, with operations expected to begin by early 2026, creating over 130 permanent local jobs.
The investment addresses a gap in the UK's recycling infrastructure. While there is some domestic bottle-to-bottle recycling capacity, PET food trays present significantly greater technical challenges due to their compositional diversity, higher contamination levels, and complex material combinations that make them substantially more difficult to recycle than bottles.
Plastics Recyclers Europe has repeatedly warned that PET bottles and trays must be recycled separately to prevent quality problems, with an estimated 700,000 tonnes of PET trays annually placed on the European market currently not being recycled effectively.
The UK currently lacks any closed-loop facilities capable of recycling PET trays into food-grade materials due to stringent regulatory standards. For food safety reasons, regulations restrict recycled materials to sources where more than 95 per cent originated from food packaging, creating additional complexity for tray recycling where mixed sources are common.
Estelle Brachlianoff, Chief Executive Officer at Veolia, stated: "Today's announcement marks a major milestone for the UK recycling industry and a key pillar of Veolia's GreenUp plan to drive sustainable resource management. By becoming the first company in the UK to recycle PET trays through a fully closed-loop process, we are reinforcing our leadership as a pioneer of the circular economy."
The facility will use Veolia's proprietary technology to shred, wash, and flake PET plastic from both trays and bottles, creating food-grade recycled material that can achieve up to 70 per cent carbon emissions reduction compared to virgin materials. This process specifically addresses the technical challenges that have previously prevented effective tray-to-tray recycling in the UK.
Increasing plastic recycling capacity
Veolia says that this investment forms part of its broader £1 billion commitment to UK circular economy infrastructure by 2030. The timing aligns with anticipated pressure on domestic recycling capacity, as several players have exited the market due to challenging economic conditions and low end-market demand.
Gavin Graveson, Chief Executive Officer at Veolia UK, emphasised the investment's strategic importance: "At this critical time for the plastics recycling industry, with a number of players exiting the market due to low end market demand and macroeconomic concerns, it is crucial that the UK has innovative domestic recycling facilities."
The UK plastic packaging market processes 2.2 million tonnes annually, yet recycling rates have stagnated at approximately 52.5 per cent. Government data shows that while 100 per cent of local authorities collect plastic bottles, only 88 per cent collect pots, tubs and trays, highlighting infrastructure gaps that Veolia's investment seeks to address.
Current UK Plastics Pact data indicates that 71 per cent of plastic packaging is now recyclable, with recycled content reaching 24.1 per cent, up from 8.5 per cent in 2018. However, the lack of closed-loop tray processing has limited progress towards the Pact's 30 per cent recycled content target by 2025.
Preparing for legislative changes
The facility's development coincides with the implementation of Simpler Recycling, which requires businesses with 10 or more employees to separate recyclable materials including plastics from 31 March 2025, extending to households by 31 March 2026.
Veolia's investment also coincides with the advent of the Plastic Packaging Tax, which charges £223.69 per tonne for packaging containing less than 30 per cent recycled content. This tax framework has increased demand for high-quality recycled materials, particularly food-grade content that commands premium prices.
Research by Veolia suggests that escalating the Plastic Packaging Tax to 50 per cent recycled content requirements by 2030 could unlock £1.1 billion in infrastructure investment, requiring ten new plastic sorting plants and 30 reprocessing facilities.
Graveson called for government support to maintain investment momentum: "We would welcome the UK Government's support in maintaining this momentum with the right incentives, including a timely and meaningful escalation of the current Plastic Packaging Tax."
Addressing technical recycling barriers
The Shropshire facility will specifically target technical challenges that have prevented effective PET tray recycling. Unlike bottles, which provide relatively uniform input streams, PET trays contain varying grades, barrier materials, adhesives, and higher levels of food contamination that complicate reprocessing.
The facility will also potentially positions the UK for future EU alignment requirements. The European Union is targeting mandatory recycled content reaching up to 65 per cent by 2040, significantly exceeding current UK voluntary targets.
Construction has already begun at the former Stadco site in Battlefield, transforming the disused industrial facility into a ‘state-of-the-art plastics sorting and recycling operation’. The project represents one of several Veolia investments currently coming online in the UK, including district heating network extensions and hazardous waste processing facilities.
