17-07-2025
Why Isn't Sustainable Packaging Mainstream Yet?
AI, policy gaps, and the price of plastic — what's really slowing the shift
Claire Hae-Min Gusko, Co-founder and CEO of
Despite record-breaking climate pledges and the sustainable packaging market expected to maintain robust growth through 2030 and beyond, the world is still wrapped in plastic.
Sustainable packaging is gaining traction — its momentum is driven by a blend of regulatory push, shifts in consumer values, brand commitments, and innovation in material science. The packaging industry's green transition is seen as critical not only for brands' market competitiveness but for fulfilling wider sustainability and circular economy goals.
But despite considerable progress made towards greener packaging, it's still a far cry from mainstream.
Current estimates suggest that between 15% and 20% of global packaging may be classified as sustainable. However, this figure encompasses packaging that is recyclable, reusable, compostable, or made from recycled or bio-based materials.
Globally, only about 14% of plastic packaging is collected for recycling, and around 46% still ends up in landfill. This means that there is an enormous amount of greenwashing around packaging classified as recyclable.
Claire Hae-Min Gusko, co-founder and CEO of AI-powered packaging startup is harnessing the power of AI to speed up the transition to sustainable packaging. Her startup, based in Germany, uses artificial intelligence and biomaterials to prototype packaging that meets performance, price, and sustainability goals in one go. But she's quick to point out that tech alone won't solve the system-wide friction slowing adoption.
'We're not missing innovation — we're missing infrastructure, regulation, and market alignment,' Gusko explains.
like Christian Schiller (CEO of Cirplus) and Adrian Friederich (Principal at FoodLabs),
Gusko's frustration is echoed by sustainable packaging sector experts who are sounding the alarm on misaligned incentives that keep fossil-based packaging in its leading position: 'We have the tools,' says Adrian Friederich, Principal at FoodLabs. 'But without system-wide coordination, they never connect to real-world outcomes.'
The global sustainable packaging market is forecast to reach $240–$423 billion by 2034, growing at estimated 7–7.7% CAGR. Europe leads adoption due to policy drivers like the EU Packaging and Packaging Waste Regulation (PPWR), while Asia-Pacific is the fastest-growing market for sustainable packaging. By 2025, 40% of companies are expected to adopt innovative packaging — yet real systems change still lags.
This photo taken on June 9, 2020 shows municipal workers transferring waste from a canal into a ... More garbage truck in Bangkok. - Clogged canals and landfills, polluted rivers and seas, environmentalists warn Thailand's plastic waste has surged in step with home food deliveries during the coronavirus, snuffing out efforts to reduce dependency on single-use plastics. (Photo by Lillian SUWANRUMPHA / AFP) / TO GO WITH Thailand-health-virus-environment, FOCUS by Sophie DEVILLER and Pitcha DANGPRASITH (Photo by LILLIAN SUWANRUMPHA/AFP via Getty Images)
At Gusko's team is building a platform that uses AI to predict product-market fit for sustainable packaging before prototyping — asking: will it be affordable, scalable, manufacturable, and regulation-proof?
'We didn't set out to build an AI company,' she says. 'We just needed a way to compete on speed and relevance.'
Their first commercial launch debuted earlier this year at the World Travel Catering Expo, backed by over €10.5M in funding from top-tier European climate investors.
'The biggest systemic barrier is the artificially low price of virgin plastic,' says Christian Schiller, CEO of Cirplus, calling out the outrageous reality of fossil fuel subsidies that are significantly hampering the transition to sustainable alternatives.
Despite increasing regulation and consumer awareness, plastic remains cheap, effective, and ubiquitous.
'Cost is still the elephant in the room,' adds Friederich. 'Even in climate-aware industries, price often trumps sustainability. Until we see meaningful financial incentives or penalties, sustainable packaging won't scale.'
Schiller calls for stronger price corrections: 'We need plastic taxes, subsidy reform, and mandatory recycled content quotas. Right now, business-as-usual is simply cheaper — and that's what's keeping the industry stuck.'
The next five years will be pivotal for the packaging industry. Global regulatory pressure is increasing, supply chains are shifting, and sustainable alternatives are finally approaching industrial scale — yet adoption is still starkly uneven and driven by regional government policy.
A large percentage of consumers, over 40% according to recent surveys, say they are willing to pay more for products with sustainable packaging. Brand loyalty and purchase decisions are also increasingly linked to sustainable packaging practices.
Currently, single-use plastic packaging accounts for around 40–50% of all global plastic production.
'We're at a turning point,' says Friederich, 'cities are piloting reuse models. Seaweed, fiber, and refillable formats are scaling. And regulation is finally catching up — particularly in Europe.'
Still, success depends on largely on execution and enforcement of government policy. The EU Packaging and Packaging Waste Regulation (PPWR) could drive meaningful reform — or risk falling short if enforcement is weak.
'With the PPWR leaving much room for revision, I don't expect targets to be met unless backed by strong political will,' says Schiller. 'Meanwhile, countries like China are building large-scale recycling infrastructure at speed. The EU may soon have to choose between importing recyclate — or lowering its own quotas.'
For startups like this landscape presents both challenge and opportunity.
'You have to live in two timelines,' says Gusko. 'One where you're building for a future that's a decade away — and another where you need to prove value today just to survive. That balancing act is what defines our path forward.'
