Breaking the Circular Procurement Bottleneck: Can Advance Market Commitments (AMC) Solve the Recycled Plastic Shortage?

Hundreds of multinationals have pledged to raise the share of post-consumer recycled (PCR) plastic in packaging, yet supply of high-quality, competitively priced recycled resin remains badly short. The Circulate Initiative's report "Breaking the Bottleneck" (09/2026), summarised in Vietnamese by GreenU, analyses the causes of this paradox and proposes the Advance Market Commitment (AMC) mechanism as a breakthrough.

The chicken-and-egg paradox

Plastic users need food-grade PCR that is stable in volume and reasonably priced for mass production. Recyclers and infrastructure investors, meanwhile, cannot take on large loans for technology or expansion on non-binding voluntary pledges alone; they need firm, legally enforceable offtake contracts that banks will accept as collateral. The report notes that cheap petrochemical oversupply forced about 25% of US rPET recycling capacity offline in 2024-2025, while recycling plant closures in Europe rose 50% in 2025.

Seven core findings from the expert survey

Based on in-depth interviews with more than 40 stakeholders (brands, recyclers, chemical companies, investors, civil society), the report distils seven findings: (1) volatile market pressure keeps recycled plastic costlier than virgin plastic; (2) a gap between ESG pledges and what procurement teams actually do; (3) recycled plastic needs physical delivery and testing, which is more complex than carbon credits or RECs; (4) AMC suits hard-to-recycle materials needing heavy R&D best; (5) AMC is less useful for already commercialised materials such as bottle-grade rPET/rHDPE; (6) government policy needs a dual lever, pushing supply (EPR) and creating demand (mandatory recycled-content rules, RCMs); (7) the lack of unified technical specifications across brands (melt flow index, density, colour, contaminants) is a major barrier to mass production.

What AMC is, and why it is seen as a breakthrough

An AMC is a legally binding financial agreement in which multiple buyers pre-commit a budget to purchase future output if a supplier meets agreed specifications, price and deadlines, with funds typically secured in an escrow account. It spreads risk across several corporations instead of leaving one brand to carry it, gives technology companies a clear market signal to raise debt, establishes fair price discovery between virgin and recycled plastic, and lets companies pay only once goods are delivered and certified.

Three potential applications

The report proposes applying AMC to three material groups: (1) advanced recycling of mixed plastic waste, where flexible films and multilayer packaging make up 44% of global plastic packaging yet are barely recycled, requiring pyrolysis or supercritical water technology with heavy capital investment; (2) advanced recycling of textile fibre waste, since 98% of recycled polyester still comes from rPET bottles rather than old fabric; (3) paper-based alternatives for thin-film sachet packaging, which is very hard to collect in South and Southeast Asia.

In emerging economies, around 40 million informal workers collect 60% of the world's plastic waste. The report stresses that any successful circular procurement mechanism must build in responsible sourcing standards that improve these workers' welfare and income.

The report also lays out the challenges of rolling out AMC: internal process barriers (Finance and Legal must be involved, not just Procurement), antitrust risk, and how to cover the price gap while virgin plastic stays so cheap. In 2026-2027, The Circulate Initiative will coordinate cross-industry working groups to pilot the three scenarios in key emerging markets.

📄 Download the full Vietnamese summary (PDF)

Source: Breaking the Bottleneck: Advance Market Commitments for Circular Procurement, The Circulate Initiative (09/2026), supported by Builders Vision Philanthropy. Vietnamese version compiled and summarised by GreenU.