Plastic recycling rises but remains below 50% target

More plastic packaging was collected for recycling last year, but the rate remained below the 50% target, according to the Recycling Fund’s 2025 annual report, reported by mbl.is. The rate was 39%, up 35% from the previous year’s 27%.

The fund recorded a loss of more than 136 million krónur in 2025, compared with an operating surplus of 585 million krónur the year before. Its board chairman and director said a new European Union regulation on packaging and packaging waste is expected to significantly affect the fund’s future operations. It is uncertain whether the current system for levying recycling fees will need to be revised, including in light of the planned incorporation of rules on waste electrical and electronic equipment into the European Economic Area Agreement.

Recycling rates varied across materials. Paper and cardboard packaging had the highest rate, with 95% collected for recycling against a 75% target, although the rate fell by two percentage points year on year. Glass packaging reached 67% when deposit-bearing packaging was included, just below its target. Aluminum packaging reached 84%, exceeding its 50% target.

The report says steel recycling was classified separately for the first time last year, having previously been grouped with aluminum. It also states that 12% of aluminum was collected for recycling, against a 70% target.

Collection of portable batteries reached 47%, against an 85% target. For electrical and electronic equipment, the rate was 39%, compared with a 65% target. The fund’s chairman and director said collection targets for electrical and electronic equipment are controversial because they do not account for how long devices are used.

Fishing gear recycling continued to perform well under a long-running agreement between the fund and the Federation of Icelandic Fishing Vessel Owners. Plastic fishing gear is exempt from recycling fees under the agreement, while the federation handles collection and processing of discarded gear. About 1,100 tonnes of fishing gear were placed on the market, and collection amounted to 128% of that amount. The recycling target was 60%, while the reported result was 118%, 20% lower than in 2024.

Municipal separate collection, which includes household bins, neighborhood containers and collection stations, increased by 17.6% between 2023 and 2025, the report said.