Petco CEO Telly Chauke starts the new year with a look at the current status of Extended Producer Responsibility globally, and what it means for South African producers and consumers. She also unpacks how that will impact Petco’s core work in supporting our members, and the collection and recycling value chain, in 2026 and beyond.

EPR: The new competitive baseline

The global landscape for packaging and plastics is shifting faster than at any point in the past two decades. What was once a policy aspiration – the idea that producers should be responsible for the full lifecycle of the packaging they place on the market – has now become a binding economic reality across major regions.

From Europe’s far‑reaching Packaging and Packaging Waste Regulation (PPWR) to the expansion of state‑level EPR laws in the United States, to China’s deepening regulatory framework, and the UAE’s pioneering regional pilot, Extended Producer Responsibility (EPR) has truly gone global.

Petco’s participation in the EPRO general meeting convened in Amsterdam in November last year underscored a simple yet very strategic message: EPR has reached a turning point, shifting away from being a ‘producer pays’ policy ideal, to becoming a global competitive positioning and economic instrument.

Despite the prevailing geopolitical and macro-economic headwinds, shifting responsibility for packaging waste onto producers remains a central tenet of EPR, with some jurisdictions such at the European Union (EU) tightening design rules, recycled content, data traceability and export controls that will cascade into global markets.

Global signals: What the world is telling us

In 2025/26, EPR has begun accelerating in key markets globally:

• Europe: Europe’s new Packaging and Packaging Waste Regulation (PPWR) moves from a directive to a directly applicable regulation from 12 August 2026, hard‑wiring strict recyclability performance grades, minimum recycled content and harmonised labelling across the market. This will impact how brands design packs everywhere they sell, not just inside the EU, and signifies consequent shifts in the African and Middle Eastern markets as well.
• United States: Seven states have now implemented packaging EPR laws, adopting phased-in protocols and commitments, and expanding producer obligations.
• China: Regulatory tightening and massive virgin PET expansion affect global recycling economics.
• Middle East: The UAE has set an important precedent with the region’s first packaging EPR pilot, signalling an intent to require producers to finance collection and recycling and to build out data, logistics and PRO operations ahead of full regulation.

Amidst these gains in advancing EPR globally, the macro-economic and trade environment remains fraught with tensions. US trade and tariff dynamics have added noise. Trump’s 2025 tariff moves affected plastics trade flows and, episodically, PET/resin pricing, while recycled PET (rPET) bales hit historic lows mid‑2025 due to oversupply and weak offtake – widening the gap between rPET and cheaper virgin PET. Added to this, China’s strong virgin PET capacity growth in recent years and disciplined industrial policy continues to depress virgin prices, challenging rPET economics globally.

Last year was a difficult one for rPET economics. rPET bale and flake prices reached historic lows in the US, while virgin PET remained comparatively stable; in Europe, rPET was trading at a premium over virgin driven by quality constraints and processing costs.

Petco: Part of the global conversation

For South Africa, and particularly for Petco, this global synchronisation carries both risk and opportunity. Our recent international engagements made it clear: EPR is now shaping market access, investment decisions, and trade flows. As a PRO operating in the South African market, but with members that have global footprints, being part of the global conversation is critical for Petco’s mission.

The value of showing up in these rooms is threefold. We can:

• anticipate market access requirements that our members will face on exports;
• in the future, benchmark fee modulation and compliance design against the most mature systems; and
• bring back practical insights to strengthen our own knowledge economy and local ecosystem.

Key points for South Africa’s position

Whilst South Africa is progressing steadily in the policy environment, there are significant pressure points that may detract from the potential to sustain EPR and its gains domestically.

SA has seen good momentum in infrastructure development, with new rPET capacity such as Extrupet’s Western Cape bottle‑to‑bottle plant launched in 2025 which strengthens local circularity. In addition, our inclusive EPR approach ensures that waste reclaimers (pickers) are supported and recognised as the backbone of South Africa’s recycling system.

However, virgin price softness and global policy uncertainty continue to strain local recyclers, making it difficult to fully utilise the installed capacity. The strategic answer to these constraints is to see more material getting to plants (secure feedstock to de‑risk operations) and stronger, enforced compliance to keep the playing field fair for members who pay.

Priorities for Petco in 2026 and beyond

This is how Petco will be working on behalf of its members this year to ensure the sustainability of our EPR model:

1. Strengthen the collections base, enhance flow and utilise installed recycler capacity: Expand collector enablement (logistics grants, balers, route densification) to raise bale quality and volumes flowing to domestic recyclers, scale buy-back centre upgrades and municipal separation-at-source nodes in metros.
2. Agitate for an enabling policy environment and real enforcement: Advocate targeted economic support (electricity stability relief, working‑capital facilities, and green tax incentives) to give recyclers a ‘softer landing’ during price troughs; and push for visible compliance enforcement against free‑riders under Section 18.

Where to from here?

If we succeed in building resilience – through compliant members, well‑supplied recyclers, globally aligned design rules, and empowered waste pickers – we will position South Africa as a circular‑economy leader in the Global South.

2026 should be our year of resilience: more material, more partnerships, more international alignment – and a laser focus on fairness through compliance. If we do this, we’ll keep South African recyclers busy, our members competitive in export markets, and the people who make the system work – waste pickers and SMMEs – properly recognised and rewarded.

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