Chenavari Investment Managers today announced the publication of its latest white paper, Decarbonising the Packaging Industry, the newest instalment in its Industry in Transformation series. The report provides a comprehensive assessment of the carbon footprint of global packaging and sets out the pathways, hurdles, financing needs and regulatory drivers shaping the sector's transition to a low carbon future.
Worth an estimated USD 1.32 trillion in 2026 and forecast to reach USD 1.75 trillion by 2035, packaging underpins virtually every global supply chain and accounts for approximately 4-5% of global greenhouse gas emissions, or around 2-3 gigatonnes of CO₂e each year.
Chenavari’s analysis finds that 70-90% of these emissions arise upstream, in steel, glass, paper and petrochemicals, largely outside the direct control of packaging companies. Decarbonisation is therefore fundamentally a materials transition, rather than simply a factory efficiency exercise.
Key findings
• Plastics are the central challenge. Plastics account for 44% of packaging emissions. Yet lightweight plastic formats often outperform glass and aluminium on a carbon basis. Reusable glass can require up to 25 reuse cycles to reach carbon parity with the most carbon efficient plastic bottles, particularly where recycled content is high (the paper assesses carbon only and does not address waste leakage or the wider circularity failures associated with plastic).
• Europe's circularity gap remains wide. Only 42% of EU plastic packaging waste is recycled and recycled material accounts for just 9.7% of plastic packaging inputs, well below the EU's 2030 recycled-content targets of up to 35%.
• Four levers define the pathway forward: Reduce, Reuse, Recycle, Renew. Many opportunities to reduce packaging weight have already been captured, while voluntary reuse schemes remain below the scale required for meaningful carbon savings. Recycling is the strongest near-term lever with advanced recycling technologies, while Renew, through bio-based feedstocks, can address the fossil carbon embedded in plastics.
• Regulation is reshaping the economics. The EU Packaging and Packaging Waste Regulation, Extended Producer Responsibility modulation, carbon pricing and plastic taxes are creating new incentives for circular materials. In early 2026, some recycled plastic polymers traded at a discount to its virgin equivalent, reflecting geopolitical supply disruption rather than structural demand growth. The spread remains volatile and recycled content is not yet a settled cost advantage.
• The transition requires patient capital. Four areas remain structurally underfunded in relation to the demand that the regulatory environment is creating: recycling infrastructure, mono-material conversion, advanced and enzymatic recycling, and biobased feedstocks. Targeted capital can help bridge the gap between pilot projects and commercial scale.
Stéphanie Paillat, Head of Responsible Investment at Chenavari Investment Managers, said: "Packaging is one of those industries everyone touches every day, yet it rarely gets analysed as a sector in its own right. Once you look closely, it becomes clear this is not simply a recycling issue but a materials transition, and plastics sit right at the heart of it. Understanding where the emissions actually sit is the first step towards targeting financing to the solutions that will make a meaningful difference."
Vincent Laurencin, Partner and Deputy CEO at Chenavari Investment Managers, added: "Regulation has set the course and the technologies increasingly exist. What's missing is the capital structure to take them from pilot projects to commercial scale. Packaging is one of the clearest examples we have found of where patient, structured capital is needed most."
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