LONDON — The shift toward sustainable plastics in automotive manufacturing is accelerating, with recycled and bio-based materials expected to play a central role in reducing environmental impact and resource consumption in the next decade, according to a new report by IDTechEx.
In its latest market analysis, Sustainable Plastics for Automotive 2025–2035: Market, Players, and Forecasts, IDTechEx forecasts compound annual growth rates (CAGRs) of 29.1% for recycled plastics and 25.2% for bioplastics from 2025 to 2035.
The report explores how recycled, bio-based, and chemically treated plastics can help the automotive industry transition to a circular economy by minimizing dependence on virgin fossil-based materials.
“At the end of a vehicle’s life, pathways such as remanufacturing, reuse, and recycling significantly reduce plastic waste and associated emissions,” the report states.
The study categorizes sustainable plastics into three main types: mechanically recycled plastics, chemically recycled plastics, and bio-based plastics.
Among these, mechanically recycled plastics are currently the most accessible and cost-effective option for manufacturers.
These plastics are processed by breaking down post-consumer waste into feedstock that can be repurposed for non-structural vehicle parts such as seat cushions, interior trims, and floor mats.
Chemical recycling, while promising, remains limited by economic and technical challenges including lower production volumes, compatibility concerns with existing automotive specifications, and high processing costs.
The report also highlights bioplastics — made from renewable feedstocks — as a third pathway toward sustainability.
However, bioplastics face barriers to scalability due to high costs and limited raw material availability.
“While some interior parts may be suitable for bioplastics, further innovation and investment are required before broader adoption becomes feasible,” IDTechEx noted.
Environmental policies such as Extended Producer Responsibility (EPR) and the European Union’s End-of-Life Vehicles (ELV) Directive are accelerating industry adoption of recycled materials.
The ELV Directive, for example, mandates that at least 20% of plastics in vehicles must be sustainably sourced, with 15% required to come specifically from recycled automotive plastics.
As more emissions regulations take hold — particularly amid the global shift to electric vehicles (EVs) — original equipment manufacturers (OEMs) are proactively integrating sustainable materials to align with climate goals and reduce regulatory risk.
Consumer demand is also influencing the trend, with growing preference for environmentally responsible products pushing automakers to incorporate sustainability into both product design and branding.
Despite these drivers, several challenges persist.
Replacing legacy plastics used in vehicle manufacturing is not straightforward, as these materials are often chosen for specific performance metrics such as heat resistance, mechanical strength, chemical durability, and optical clarity.
“Sustainable alternatives must meet equivalent technical standards to be viable substitutes,” the report explains.
Critical components such as crash structures, lighting housings, and electrical systems still require high-performance plastics that sustainable materials cannot yet fully match.
Cost premiums also present adoption hurdles, particularly in lower-margin segments of the automotive market.
Additionally, end-of-life vehicle disposal practices, including landfilling and incineration, continue to limit the recovery and reuse of automotive plastics.
This underscores the need for systemic change across the automotive supply chain to enable circularity.
According to IDTechEx, a coordinated approach involving OEMs, Tier 1 suppliers, resin producers, and compounders is necessary to scale up the use of sustainable plastics.
“Transparent communication and collaborative development across the value chain are essential to scaling sustainable plastics in automotive manufacturing,” the report said.
By developing closed-loop systems, the automotive sector can significantly reduce its plastic footprint while meeting evolving environmental regulations and consumer expectations.
As the industry evolves, IDTechEx’s findings point to a pivotal opportunity: to design vehicles not only for performance and aesthetics but also for environmental stewardship throughout their lifecycle.
To access the full report or explore related research on sustainability, visit www.IDTechEx.com.
