Europe is about to tighten its rules against greenwashing. At the same time, EU legislation now allows petrochemical companies to use accounting methods that can attribute recycled content to plastic products even when that material cannot necessarily be physically identified in the individual product.
At the centre of the controversy is mass-balance accounting.
Chemical recycling processes such as pyrolysis convert plastic waste into oil that can be fed back into petrochemical production. Because recycled feedstock is mixed with virgin fossil feedstock, companies use mass balance to track and allocate the recycled share through their production system.
The result can be surprising for consumers.
A January investigation by The Guardian examined packaging linked to SABIC and major food brands, reporting that products promoted as “circular” can remain overwhelmingly fossil-based. Recycled feedstock can be allocated to selected products through accounting even though the physical molecules in a particular package cannot be traced back to recycled plastic. (The Guardian)
This is no longer merely an industry certification practice. In 2026, the European Commission adopted rules permitting mass-balance accounting for calculating chemically recycled content in single-use plastic beverage bottles, subject to specific conditions and controls. (Environment)
Now comes the awkward part.
From 27 September 2026, EU rules implementing Directive 2024/825 will strengthen protections against misleading environmental marketing. Generic claims such as “sustainable” face restrictions unless they can be properly substantiated, while environmental claims must not exaggerate the environmental benefit of a product. (EUR-Lex)
That creates an obvious question: if recycled content exists partly as an accounting allocation rather than identifiable material in the package, how far can companies go in calling that package “circular”?
Europe may have created two perfectly legal rules that are heading straight towards each other.
Personal remarks
Brussels has managed to turn greenwashing into an accounting standard.
Brussels has achieved something rather impressive: it is cracking down on greenwashing while simultaneously inventing a spreadsheet that can make fossil plastic look circular.
Apparently, plastic no longer needs to be physically recycled. It just needs the correct accounting treatment.
Is it corruption or incompetence? If it’s incompetence, then it’s systemic.