How to Fix the Small Aluminium Recycling Gap

A new European alliance is targeting a critical gap in the continent's recycling infrastructure. While aluminium boasts strong recyclability credentials, smaller packaging formats such as coffee capsules and chocolate foils continue to slip through the cracks of current waste management systems.

According to the European Aluminium Foil Association (EAFA), approximately 60% of aluminium packaging is recycled across Europe, leaving substantial room for improvement, particularly in smaller formats.

The EAFA and Flexible Packaging Europe is establishing this alliance to address the persistent challenge of recycling small aluminium packaging. Despite the material's ability to be recycled indefinitely, these smaller items are frequently lost within existing waste management infrastructure.

The initiative could represent a significant step towards strengthening the circular economy for aluminium packaging throughout Europe.

Improving recycling performance

The alliance has set a clear goal: to substantially enhance the recycling of small aluminium packaging formats, including coffee capsules. The focus centres on establishing the necessary conditions to ensure these items can be effectively collected, sorted and recycled at both high quality and scale.

This strategy supports a circular economy model where aluminium continues to be utilised rather than lost to disposal systems.

"We need to join forces in the value chain to make progress particularly with small aluminium packaging in order to achieve the PPWR targets," says Guido Aufdemkamp, Executive Director of EAFA. "This alliance provides a shared foundation to improve collection, sorting and recycling in a targeted way."

The initiative will identify specific bottlenecks within waste management that currently hinder strong recycling performance and conduct relevant studies to support practical implementation of measures.

According to Guido, the alliance will rely on experience from its network of national aluminium recycling organisations and other existing initiatives to implement necessary actions.

Responding to new regulations

The forthcoming Packaging and Packaging Waste Regulation (PPWR) has prompted the urgency for coordinated action. The EU regulation, which replaces the older Directive, establishes comprehensive rules for all packaging on the EU market.

The PPWR aims to reduce waste, increase reuse and recycling, and harmonise standards through design requirements such as recyclability by 2030 and recycled content mandates.

While aluminium generally achieves high recycling rates, smaller items including coffee capsules, chocolate foils, cheese foils, dairy lids and small containers continue to underperform. Although modern, large-scale sorting facilities possess the capability to separate these formats, this technology is not uniformly deployed across Europe.

Consequently, large volumes are being incinerated and only partially recovered through bottom ash treatment, which will not satisfy future recycled-at-scale requirements.

The expanding implementation of deposit return schemes for beverage containers is reshaping household recycling streams throughout Europe. As these schemes divert beverage containers, sorting plants have an opportunity to redirect their focus towards other packaging formats, including small aluminium items.

The alliance seeks to utilise this transition to pinpoint waste management bottlenecks and support targeted improvements in collection, sorting and recycling infrastructure.

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Industry collaboration strengthens

Sixteen companies from across the aluminium and packaging value chain have already confirmed their participation, with the alliance having launched on 1 January 2026. Among the principal companies involved are:

• Amcor
• JDE Peet's
• Lindt & Sprüngli
• Nestlé Nespresso

Their involvement encompasses producers of aluminium foil, flexible packaging, coffee capsules and semi-rigid containers, alongside suppliers, brand owners and fillers. This collective effort could reflect a shared commitment to addressing recycling challenges collaboratively and strengthening the circular economy for small aluminium packaging.

The broader aluminium supply chain in early 2026 is experiencing significant structural changes. The industry faces a global supply deficit and rising prices, with aluminium prices on the London Metal Exchange breaching the US$3,000 per tonne mark in January 2026, representing the highest level since the post-pandemic rally.

Additionally, two major EU regulations are accelerating supply chain evolution: the PPWR, which becomes fully mandatory on 12 August 2026, and the Carbon Border Adjustment Mechanism, which began imposing financial charges on the embedded carbon of imported aluminium in 2026.

The supply chain is increasingly adopting AI-driven sorting technology to close the loop. Sensor-based sorting has been enhanced by AI capable of recognising objects not just by material, but by shape and brand, allowing plants to separate coffee capsules from scrap metal with near-perfect accuracy.